Optimum Procurement – a growing option for procurement outsourcing

rushtonDuring Jason's flying recent visit, we met with Peter Rushton of Optimum Procurement. That's long overdue – we have mentioned the firm in passing once or twice but never featured them properly here.

Rushton is Chief Executive of Optimum, having learnt his outsourcing trade as part of the team that successfully created Xchanging’s procurement division. He was less visible than David Rich-Jones there, but those in the know suggest the success of Xchanging’s high profile deals had a lot to do with Rushton’s operational and delivery skills over the eight years he worked there. He was a procurement practitioner prior to Xchanging (CPO at Caradon and British Sugar), and co- founded Optimum with a former Xchanging colleague, Michael Jones in 2007/8. He's also known to many readers as a recent CIPS President.

Optimum have outsourcing at their heart, accounting for 75% of their business, but there are a number of nuances to their offering. So they provide a certain amount of pure consulting services, activity which has at times led on to outsourcing business. They are progressively growing their international client base and have a particular strength in the Middle East – indeed, they are responsible for providing CIPS corporate certification in the region (I didn't know that!)

And within the outsourcing offering, they have a successful service line in Fleet Management, where they are already a UK market leader as an independent (that is, not controlled by a finance house, vehicle manufacturer or retailer). “We manage over 6000 vehicles, and provide a complete end to end service, not just in procurement but aspects such as accident management, fleet policy, and vehicle disposal” explains Rushton.

Optimum now have over 60 staff, revenues of over £5 million, and have grown strongly at around 30% a year, all privately funded by the two founders. Rushton is particularly proud of their links with the Liverpool John Moores University Business School, who run a CIPS accredited business studies degree course, with Optimum recruiting the best talent from that course onto their procurement graduate training scheme.

So, whilst they are not yet in the Proxima or Xchanging league in terms of sheer size, they are becoming a serious option for more organisations looking at outsourcing, with a good range of industries already represented in their customer base. They’ve won some high profile clients too – Manchester City Football Club and Lancashire Cricket Club amongst them. Another 'sweet spot' appears to be the facilities and estates management sector, with a number of major clients there; “not for any particular reason, it has just happened like that”.

Our meeting was also timely given the announcement that Optimum and software firm Wax Digital have entered into a strategic partnership. We've featured Wax and some of their clients here many times, and this partnership sees Optimum making what Rushton describes as “the most significant investment we've made” to use the Wax source to pay software products in delivering their business. But both firms hope the partnership will go further than merely an important buyer / seller arrangement – there are opportunities for cross selling in both directions, for instance.

The firms are relatively similar in size, appear to have similar cultures, and are even both based in the Manchester area (“although that wasn't a factor in our selection process” says Rushton). So there is every chance that they can and will work together well. However, if they are to last, all these strategic partnerships have to move from a nice theory to real delivery – with benefits for all the parties – so we'll keep an eye on their progress with interest.

We will also look more closely at Optimum shortly and another interesting new category-specific offering that they are developing, so look out for that shortly. And we will have a more detailed analysis of Optimum and the partnership with Wax Digital for Plus and PRO subscribers shortly.

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