Puridom Post - Leading the Way to Procurement 3.0

Procurement Transformation Case Study | More Webinar Questions (5)

  

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The second part of the September 21st webinar, "The Measuring Stick:  Strategies to Manage and Improve Procurement Performance," focused on the procurement transformation of Blue Cross Blue Shield of Rhode Island. Dan Warn, Chief Procurement Officer, for Blue Cross Blue Shield of Rhode Island, shared how his company was able to deliver significant realized and cost avoidance savings, working collaboratively with his CFO.  The following questions pertain to BCBSRI's transformation and the Procure-to-Pay solution they selected and implemented.  Here are the questions and Dan's responses.

1.  What is a realistic timeline for achieving procurement transformation and how much do you attribute your success to the support of the CFO to this project? 

Great question, and of course the answer is “it depends.”  For BCBSRI, a mid-size company with executive support, it took 12-18 months to establish a baseline across people (org + skillset), process (institute and enforce a new purchasing policy and strategic sourcing process) and buy and implement P2P technology.  That being said – we have lots of continuous improvement to do in each of the three areas.  My goal is to reach something of a “steady-state,” within 24-36 months.  Loosely defined as ideal org and team, 100% compliance to policy, and 90%+ spend under management (i.e. spend through Puridiom).  The support of the CFO / executive leadership team is essential.  Without it, your success rate will drop significantly – I wouldn’t have even tried to tackle all three aspects of people, process and technology simultaneously without the support of the CFO and executive leadership team.

2.  You have achieved 6 out of 8 key benefits with Puridiom.  The last two deal with consolidating and strengthening the supplier relationship.  What is your plan for accomplishing the last two and how will you translate these savings to finance?

Puridiom’s core functionality allowed BCBSRI to realize the first 6, but it also enables the procurement team to have the visibility it needs and the ease of use the suppliers need to tackle the next two benefits.  We plan to proactively communicate with suppliers on the benefits of transacting with BCBSRI through Puridiom in order to increase the amount of online interaction and continue to reduce our manual, paper based transaction costs as well as take advantage of payment term rebates, etc.  With the spend visibility Puridiom provides, we also can now better target who are key strategic suppliers are and place them in our Key Supplier Program which uses a separate set of metrics to drive a 3-5% cost improvement year over year due to innovation, gainshare, etc.  

3.  What other procurement services did you consider besides Puridiom? Why did you choose Puridiom?

We considered a range of vendors and shortlisted to Ariba and Puridiom.  Puridiom's cost-to-value ratio exceeded Ariba's and required less independent modules to achieve greater functionality.

Again, we welcome your feedback and any comments.  You may view the archived webinar or download slides by clicking the buttons below.