MOST IMPROVED PURCHASING OPERATION: START UP and Events/Best in procure… · introduction: market conditions performing well in a complex and competitive market mail online: worlds

A&N MEDIA MOST IMPROVED PURCHASING OPERATION: START UP BEST IN PROCUREMENT: 30TH JANUARY, 2013

NICK JENKINSON

AGENDA

INTRODUCTION

AIMS & OBJECTIVES

PLANNING & EXECUTION

INNOVATION & CREATIVITY

BEST PRACTICE

ORGANISATIONAL BENEFITS

‘KEY TAKEAWAYS’

WINNERS MOST IMPROVED PURCHASING OPERATION: START UP

INTRODUCTION: WHO ARE A&N MEDIA?

B2C DIVISION OF DAILY MAIL & GENERAL TRUST (DMGT) PLC OUR BRANDS CONNECT WITH 46% OF THE UK’S ADULT POPULATION

INTRODUCTION: MARKET CONDITIONS

PERFORMING WELL IN A COMPLEX AND COMPETITIVE MARKET MAIL ONLINE: WORLD’S MOST POPULAR ENGLISH-SPEAKING NEWSPAPER WEBSITE

JOBSITE: TOP 5 DIGITAL RECRUITMENT BRANDS IN THE WORLD

DAILY MAIL/THE MAIL ON SUNDAY: OUTPERFORMING THE MARKET BY 3%

METRO & WOWCHER: GROWTH INTO NUMBER 3 & 2 IN THEIR RESPECTIVE MARKETS

THE MARKET IS CHANGING AND WE HAVE SOME HUGE CHALLENGES RECESSION: GREATLY IMPACTED ADVERTISING REVENUES (> 35% REDUCTION 2007-12)

CIRCULATION/DISTRIBUTION: TRADITIONAL MARKET DECLINING (>20% REDUCTION 2007-12)

MARKET STRUCTURAL CHANGE: A&N ARE WELL PLACED IN DIGITAL MARKET BUT TRANSFORMATION POSITION INTO REVENUE IS DIFFICULT

INTRODUCTION: A CATALYST FOR CHANGE “UNPRECEDENTED TRADING CONDITIONS REQUIRED

UNPRECEDENTED COST CUTTING MEASURES”

It was time to introduce some “Real Procurement”

The Media Sector for many years was regarded as “the land of milk and honey”:

cost wasn’t a key focus

The pre-2010 procurement “function”: • Business units “buy”: local procurement teams “process”. • The “procurement process” was transacting , fetching, wrapping and delivering.

AIMS & OBJECTIVES: CLEAR VISION, CLEAR DIRECTION

OUR MISSION STATEMENT

“To be a professional procurement function recognised as a

customer orientated, value add support organisation which acts in

the best interest of DMGT, whilst helping customers to exceed their goals”

REQUIRED A NEW PROCUREMENT TEAM FOCUSED ON:

Obtaining cost reductions in the procurement of goods and services

Delivering customer focused, transparent & efficient solutions

Identifying best practices that can be repeated & standardised

Determining the appropriate supplier relationships necessary to support business goals

Provide A&N Media with a competitive advantage by reducing the Total Cost of Ownership

MANDATE

PLANNING & EXECUTION: THE INTERNAL CHALLENGE

“We don’t micro-manage. We devolve operating decisions as much as possible. Our hands off management style appeals

to talented entrepreneurs” DMGT, Annual Report 2011

HEAVILY DECENTRALISED, CULTURE WITHIN DMGT: AUTONOMY IS HIGHLY REGARDED & CENTRAL INTERVENTION NOT WELCOMED

PLANNING & EXECUTION: BUILDING A TEAM

“Futility is doing the same thing today as you did yesterday

and expecting a different result”

New team was recruited to deliver Procurement Vision but we needed so

much more than process followers!

PLANNING & EXECUTION: ENGAGING THE BUSINESS

TRADITIONAL ‘FUNCTIONAL’ PROCUREMENT DELIVERABLES WERE “HYGIENE” FACTORS, THEY STARTED THE CONVERSATION BUT WOULDN’T WIN US ANY MEDALS

Spend visibility

Savings

Category management structure

Standardised sourcing processes

WORKING IN A HEAVILY BRANDED BUSINESS SO ‘ACHIEVING TOGETHER’ WAS CREATED AS ‘BRAND PROCUREMENT’:

Desire to be integral part of stakeholders’ worlds - not external consultants

Crystal symbolises how procurement touches every facet of the business

‘Achieving together’ underpins our business alignment

We needed to connect with the business

on an emotional level

INNOVATION & CREATIVITY: ALIGNING WITH THE BUSINESS

Hygiene Factors

Business Value

Greater Opportunity

Credibility relied on ‘QUICK wins’ & ‘doing the day job well’ to drive business value

Delivery opens doors but ‘Trusted advisor’ status requires improved alignment and the need to act as a ‘commercial enabler’

‘Functional’ best practice procurement “hygiene” factors delivered: Category Management structure implemented

Standardised Sourcing process introduced

Spend Database implemented: Procurement became the ‘font’ of all spend related knowledge

Salesforce CRM tool modified to create simple SRM tool: create quick contract visibility

Consistent delivery of 20%+ savings

INNOVATION & CREATIVITY: COMMERCIAL ENABLERS KEY FOCUS ON COMMUNICATION, SPEED, AGILITY, ALIGNMENT & INSIGHT

‘THE TECHNOLOGY and legal teams were complemented by a procurement team who were able to drive better

commercial terms, maintaining our focus on key clauses and areas to negotiate’

CIO, A&N MEDIA

‘Procurement guided me through an agile,

swift and flexible process and acted as

a true commercial consultant’

HEAD OF METRO PLAY, A&N MEDIA

BEST PRACTICE: DRIVERS OF CHANGE KEY FOCUS ON COMMUNICATION, SPEED, AGILITY, ALIGNMENT & INSIGHT

COLLABORATION

ORGANISATIONAL BENEFITS: QUANTITATIVE RESULTS

STILL A LONG WAY TO GO ON THE ‘PROCUREMENT JOURNEY’ BUT THE DIRECTION OF TRAVEL IS VERY POSITIVE:

‘Hygiene’ factors delivered and continuously developed

Recruitment and development of a highly trained, highly motivated procurement team:

continuous development now focused around ‘sales’ skills and ‘creative thinking’ 2010/11 savings delivery in excess of £11m & return on investment (ROI) in excess of 7 2011/12 savings delivery in excess of £16m & return on investment (ROI) in excess of 9.5 Movement from ‘butler’ to ‘price reducers’ to ‘drivers of change’ in only two years

Growth into wider DMGT group: Spend Analytics project commenced to identify & deliver

global synergies from a DMGT spend of £1bn (A&N Media: £650m) Most importantly, seen as true ‘business partners’

ORGANISATIONAL BENEFITS: QUALITATIVE FEEDBACK

‘Their resilience, stakeholder management and business alignment have been critical success factors and have helped deliver significant value and profit improvements’ COO, A&N Media

‘They have gained credibility and the respect of the management teams which given our business model, was critical in delivering the success they have achieved. ’ CEO, A&N Media

‘Over the past 2 years, A&N Media’s Procurement team have delivered a wide range of initiatives which have significantly improved our profits . ’ Northcliffe Media, MD

‘Relationship between them and the Finance teams has developed hugely and this has helped to provide much improved transparency and governance thus supporting savings hitting the bottom line. ’ Finance Director, A&N Media

KEY ‘TAKEAWAYS’

Think ‘Business’ not ‘procurement’

Drive value, not just savings

Enable don’t disable

Connect emotionally, not just functionally

Hygiene Factors: do them well