ISS makes Spend Flexibility synonymous with Business Agility using Amazon Business

ISS, a leading global workplace experience and facility management company, provides place-making solutions that contribute to better business performance. Partnering with over 60,000 customers in 30+ countries to deliver places that work, think and give, it is served by more than 470,000 employees worldwide and 40,000 employees in the UK.

ISS provides organizations with every facility solution they might require to support their own core activities. Services include facilities management, engineering, energy management, catering, cleaning, food and hospitality, front of house, security and consultancy. The key to being able to give its customers this total facilities management (TFM) service is “agility.”

“Our customers choose us because we create, manage and maintain environments that make life easier, more productive and enjoyable,” says Derren Chamberlain, the CPO of ISS UK & Ireland, whose 25-plus years of Procurement experience places him in command of the majority of the firm’s global spend, making his voice a central one to the company’s business spend management decisions.

The ability to respond quickly to customer demand, no matter how small, is something that can really differentiate a service provider in today’s market, and those that want to be a customer of choice must be able to do that. For the Procurement team, that requires sourcing excellence in all that they purchase.

The scale of the purchases involved for a multi-faceted FM outsourcing organization is huge. When a firm has a 100-year reputation of providing a quality service to maintain, and a breadth of services to offer grown out of strategic acquisitions, then standardization and compliance are paramount.

ISS serves some big-name organizations, the likes of Barclays, HSBC, Heinz, Deutsche Telekom, being but a few.

“Our Procurement-as-a-Service offering requires us to respond efficiently to our customers,” explains Derren. “We serve many organizations, and if you were to take just one, like Barclays for example, you are looking at 900 outlets in the UK alone. That’s a lot of purchasing activity across the many services we offer, so we must look to economies of scale and standardization to provide the best quality and best price we can to our customers.”

“What many firms want today is for someone to take away the headache and perform a service on their behalf, be that Procurement or any other, and to do it well. Our job is to make sure that it is carried out seamlessly, in a working environment that maximizes efficiency and productivity and promotes well-being.”

One of the areas that historically generates many challenges for Procurement is that of tail spend. Ad hoc spending can go undetected, uncontrolled and become maverick. If a Procurement function wants complete visibility, then it must also control the tail.

Taming the tail with Amazon Business

Derren has managed to bring 95% of the UK’s £0.5bn a year spend under management into their spend management system, Coupa. About 75% of spend goes through his preferred supplier list of 140, and about 50% of that through the top 20 suppliers. But the long tail of low-value, low-quantity spend has traditionally flown under the radar.

“While we carried out a certain level of due diligence and risk analysis, using different channels like expenses, we realized we needed to standardize these purchases and where they were being purchased from. That 5% was mostly made up of last-minute, small purchases, but it’s just as important to get them right.”

“In my experience,” he said, “when you roll out any ERP system, there will always be a requirement for a bolt-on P2P system; likewise, that will also need an additional system to manage the long tail. So we were considering what else we could do to tighten that process – because people spend as much time on purchasing these small items as they do the strategic ones. Purchase cards were the norm 20 years ago, and while they are still used today, we needed something that would have the same ease of use, speed and efficiency as people use in their everyday lives. That digital experience should be available as much to employees as to consumers, so for us Amazon Business was the answer.”

Speed and efficiency, but under control 

Derren learned about how Amazon Business could help transform their ad hoc buying activity at a Coupa Inspire event in late 2017, and in early 2018 they were up and running with an account.

“What Amazon Business has allowed us to do,” he said, “is to get as much commoditized spend into our accounting tool as possible to help us attain buying efficiency and control that tail spend. There will always be ad-hoc buying, but Amazon Business lets people buy those one-off items quickly and easily and in a controlled way.”

“It’s the specialist, one-off or last-minute purchases that generate the most noise if people can’t get hold on them, when they want them,” he says. “For that reason, the wider range of suppliers Amazon can onboard the better – the supplier gets to open up its business to a bigger marketplace – it’s a win-win.”

Control also comes from integration with the P2P system, so that all spend is visible in the same place. “We have integrated Amazon Business fully with Coupa, which means if we are looking for something, for which we may not have a preferred supplier list or catalogue, it punches straight out to Amazon Business where the buyer can make their selection. There is little training as the experience is just as they have at home, which is a huge benefit, making it a good experience for the buyer. The purchase is then pulled back into the Coupa system so that everything is in the general ledger, which makes it nice and clean for Procurement.”

Paying is also made easier as a corporate card (lodge card) sits behind the Amazon Business account. Derren receives an aggregated bill once a month, while the supplier gets paid within days. “This is hugely advantageous for them,” he says, “and for us it means we can earn a rebate on spend that ordinarily I would not see any value from. I get a granular detail of spend, the workforce is empowered to make their own yet compliant purchase decisions, and I get to control that trickle spend which, while a distraction, needs to be managed. This is why Amazon Business is a good fit for our company.”

Feedback has been positive

ISS has 1,200 users of the spend management system who can also punch out to Amazon Business. All of those users have received training, whether virtual or classroom, and feedback has been very positive. “They especially like the ease of use and the next-day Prime delivery,” Derren said. “The facilities management business is reactive by nature, so Amazon Business is essential for us when a customer needs a specialist tool, for example to complete a job, we can order it today and get it tomorrow.”

But that doesn’t mean that ad-hoc purchases can be overused, and buyers do not have free reign. “The ‘guided buying’ capability means we can trust our buyers not to abuse the system, because we have control over what they can and can’t buy through a pre-defined set of parameters and preferred supplier lists – this gives us the compliance we want for tail spend while at the same time giving the user choice and autonomy. We can control the catalogue and the supplier list, which means risk management is built in.”

The CPO’s challenge – pleasing the stakeholder

Being the CPO of such a large and diverse firm, with responsibility for between 60% and 70% of total global spend within the ISS group is a privilege for Derren, but not without its challenges. Stakeholder management goes with the role, and any good CPO taking on a new process must take their team with them.

“No one likes change,” he says, “but this change was not something to be feared, because it is familiar ground that people know can make their lives easier and requires no extra effort. Using Amazon Business became part of our existing solution; it incurred no extra infrastructure changes or investment in technology to make it work. So as a pure plug-and-play tool it allows us in Procurement to be seen as less bureaucratic than before, and if we can show our customers that we are easy to do business with, no matter how small the requirement, then that helps our customer relationships.”

For Derren, Procurement is a dynamic environment, it must move with the needs of the customer: “Part of best-practice Procurement means improving our sourcing effectiveness, and that means improving the way we execute and manage the purchase of tail spend as well as we do our strategic spend. Organizations must be agile today, able to respond quickly to a changing market and getting customers what they need, when they need it. Having that agility to buy quickly at short notice is a differentiator for our business.”

As the biggest of ISS’s markets, the UK is also the most mature. It has come to be recognized as a “lighthouse” market, owing to its best practices. “Our aim is for Procurement to also become that beacon,” says Derren, “an example that other parts of the business will look to for best practice. Employing Amazon Business is helping towards shaping that vision by bringing more spend under management.”

This Brand Studio article was written with Amazon Business.