Procurian takes procurement outsourcing strides in Europe

We’ve featured Procurian, the procurement outsourcing services provider,  in terms of news stories every so often. But I haven’t spoken to them for some time, until I met Alun Baker and Graham Moore the other day at their London offices near Marylebone station.

The firm globally has around $30 Billion annual spend under management, with Harley-Davidson their latest iconic client win announced recently. The European operation has grown over the last couple of years, with around $5B spend managed now. Their major new client, Zurich Insurance Services, clearly has been a strong driver of that growth. That contract was won against stiff competition, and Procurian have around 10 significant clients within Europe now. They are served by over 50 staff based in London, and slightly more in Prague – “over 130 in Europe in total, and all but a handful are delivery people – category and sourcing specialists”, says Baker.

Procurian stress that deep category expertise at the heart of their proposition, which is around their “Specialized Procurement Infrastructure™”.  To clients and potential clients, that means having a ready-made set of processes, teams and capability that can deliver immediately.  With their US strength, they have 70+ experts in each of around ten major category areas – Marketing, IT, Professional services, MRO etc.  The European category experts also form part of “global practices” in those key category areas. Recent acquisitions (that we featured here and here) have increased capability in energy and media buying.

When I met Baker and Moore, we talked at some length about the need to be able to measure and capture benefits – something that isn’t critical just for outsourced procurement services providers, but really for all procurement leaders. It’s something Procurian have put effort into for years, and I’ll be featuring more on that topic here shortly.

Procurian are also actively pursuing close relationships with major consulting firms, both the generalist large firms with significant procurement practices, and specialist players. That’s for three reasons, Baker explains. One is that those firms need to understand procurement outsourcing, so they can advise their own clients properly. Secondly, there may be opportunities for Procurian to partner with those firms for certain client opportunities. But finally, Baker believes that sometimes organisations are not ready for outsourcing – or at least, not in the way Procurian deliver it. That surprised me at first but actually there is logic there.

“There needs to be a certain state of readiness if clients are going to get the most out of our services and capability” he says. “Sometimes a degree of transformation is necessary first – which is obviously where the sort of work the consulting firms deliver can be useful and may be a forerunner to the client involving us”.

I suppose this comes back to one of the first things I was told about outsourcing – “don’t outsource a mess – you just get an outsourced mess!”   (There is a counter-argument to that, but we’ll leave it for another day).  Procurian’s  clients aren’t all moving all their indirect spend to them of course.

“We’re working at category level with a number of clients – the one note of caution is you need to define clearly where the responsibilities and boundaries lie, but it is very do-able” according to Baker.

We also discussed the tricky issue of who the procurement outsourcing firms are selling to – is it the CPO, or the CPO’s boss? That relates to some of my previous writing, particularly the idea that confident and forward thinking CPOs are looking at outsourcing as just one of the weapons in their armoury, and realising it doesn’t have to be an all or nothing activity.  If I was still a CPO, I might feel it was in my own interests to at least look carefully at the outsourcing options – rather than waiting for my boss to think that they might like to do the same!

As Baker says, “a lot of our engagements are with CPOs who have that sort of mature attitude. But yes, sometimes it is the CFO or COO who is interested in talking to us”.

In any case, it’s clear that Procurian are now taking Europe very seriously. And that is good news for organisations considering that outsourcing step – there is a pretty impressive range of specialist service providers to choose from these days.

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