11 September 2014 | John Burgess
John Burgess of AXA UK says procurement has increased its role and can now help him make sustainable savings and build long-term strategic relationships.
Describe your relationship with procurement?
It is positive and very beneficial to what I do and how I do it. I see our procurement function as a strategic partner. It not only helps me to manage costs, it adds value to the overall relationships I have with our suppliers and partners. The team helps me develop more innovative commercial solutions.
Has your view of procurement changed?
Procurement has moved from being a transactional function, which helped me to manage contractual arrangements, negotiations and costs, to one that helps me achieve sustainable savings and benefits for our business and build long-term strategic relationships. We now collaborate very closely across HR and procurement, and are clear that we have a shared goal. We achieve a good combination of hard-skills and soft-skills approach.
Has procurement assisted specific projects?
In so many ways: in recent times, key projects have included working with us on a HRIS [HR Information System] project and also developing a more innovative and commercial approach to managing temporary labour across our business.
Where does procurement really add value?
Financially, for example providing upfront cost savings and back end savings by enforcing warranties, and so on. The team has added value in quality of sourcing and innovation, working with us to develop innovative commercial models and advising on negotiation techniques and tactics. Procurement has also helped us where a supplier relationship has been strained by service or delivery issues, and supported us in getting back on track. Procuring HR services is very different from other aspects of procurement, such as materials purchasing. The procurement team understands that you can’t just bring a pure cost saving mentality to how we procure, they understand that value is the ultimate goal.
Could procurement provide more support?
From my perspective, it’s more of the same. For our business overall, I think that there are opportunities to create further value; inevitably there will be people purchasing things without the benefit of their expertise, so having the capacity to reach individuals who need their help is an opportunity.
Can you quantify the value of procurement?
In the savings they help me achieve and in the quality of relationships with the suppliers – an important balance. They help create a consistent approach to vendor management across HR.
Is working with procurement easy enough?
Yes, I find it really easy. We have a strong partnership, the team is proactive and participative in longer term planning and projects, they make themselves available and are very responsive to issues that emerge. They really seek to understand the business context and environment. They also de-mystify things, and make things simple for people who are less experienced in procurement activity, I feel like we speak the same language.
How can the working relationship improve?
Not much – we have a productive relationship.
☛ John Burgess is head of talent, leadership and development at AXA UK