11 May 2009 | Jake Kanter
ITV staff must stick to new purchasing rules as part of a plan to save £16 million by the end of this year.
Speaking exclusively to SM, the newly appointed group procurement director, Angela Porter, said the ITV board agreed to mandate a procurement policy that gives the purchasing department greater control over external spend.
The new rules mean any purchase more than £25,000 must be approved by procurement, and the department is required to lead negotiations on all future contract changes. The broadcaster has also adopted a category management buying strategy and overhauled its supply base.
Purchasing now influences 40 per cent of ITV's £960 million annual spend, compared with 22 per cent when the transformation began last November. By the end of this year, procurement aims to have input on 60 per cent of the total. And Porter plans to reduce overall spend by 20 per cent over the next three years.
ITV has also cut its supplier numbers from 22,500 to about 15,750 and established a preferred vendor list covering 40 per cent of its purchases.
In addition, procurement will have greater input on ITV's biggest shows through greater collaboration with production departments.
The station saved £3 million through procurement changes in the first quarter of 2009 and aims to save a further £13 million this year.
ITV's previous procurement policy was an "A4 page" and internal business units only used procurement "when they wanted to", said Porter, who added that she wants purchasing to be the "driving force behind ITV's efficiency" in the next two years.
The overhaul follows a major review that established a £70 million savings target for 2010, on top of the procurement savings. Non-executive chairman Michael Grade wants ITV to become "leaner and fitter".