Drinks giant failed to focus on buyers

31 October 2002
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31 October 2002 | Robin Parker

Diageo failed to focus on the needs of buyers in implementing e-procurement, its global e-procurement programme director admitted.

Roy Jakes said the drinks giant is sending its buyers to one-day workshops on building and buying from online catalogues in an attempt to learn how e-procurement can help them to buy from the right suppliers.

He told delegates that Diageo had focused on the back office for too long, and did not target buyers early enough.

"We were effectively thrusting e-procurement upon the company. We are now working to make it part of 'business as usual'.

"When we introduced the system, buyers were measured on securing deals rather than complying with preferred suppliers. Now compliance has become valued as a key performance indicator."

Diageo's troubled e-procurement project, originally run by consultants, was brought in-house in January 2001 because of slow uptake and spiralling costs.

The company has spent £20 million on the Ariba system to date, more than half of which went to consultants, Jakes said.

It now spends £11 million online each month, with about 200 suppliers.

Jakes said 80 per cent of spend was with approved suppliers, compared with just 24 per cent before the system was introduced.

His comments updated delegates on the revelation at last year's event that the multinational firm spent £5 million on the system before integrating it into the company infrastructure.

SMoct2002

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