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7 March 2011 | Angeline Albert
The City of London Corporation (CLC) aims to save £30 million over the next five years by centralising and streamlining its procurement operations.
The corporation, which provides local authority services to public organisations in London’s Square Mile, has awarded consultancy Accenture a five-year contract to establish a procurement shared service centre to reduce its purchasing costs.
Organisations covered by the deal include the Barbican Centre, Guildhall School of Music & Drama, five Thames bridges, the Central Criminal Court and an animal reception centre at Heathrow Airport.
The City of London Procurement Service will be run by a joint team from CLC and Accenture and will tackle all categories of third-party spend, estimated to total £200 million a year. Accenture will also provide training for CLC staff involved with the transformation, and for those who will take over management of the service at the end of the contract. The contract began on 1 March. Among the first changes will be to fully automate CLC’s procure-to-pay service.
Chris Bilsland, finance director at CLC, said different departments across the organisation were buying independently and not getting value for money. He estimated £30 million could be saved over the course of the deal, with savings of £2 million expected in the first year. He also forecasted annual savings of £10 million after the contract expires.
“We have hundreds of people buying, but our in-house corporate team has around four procurement people” he said. “We need to centralise procurement and train our people in best practice techniques. We have about four fully qualified CIPS members who will be at the heart of the new procurement service.”
He added CLC was reviewing staffing requirements as a consequence of the new service. “We are keen to promote the CIPS qualification in our organisation. We can give training to people who buy but aren’t qualified, but if we are to develop a world-class procurement service there will be a slimming down of people who buy.”