Prudential UK
The Company
Prudential UK is a leading life and pensions provider to approximately seven million customers in the United Kingdom. It operates from two core strategic UK sites in Stirling and Reading and has offices in London and Dublin, as well as a customer service centre in Mumbai.
Prudential UK provides a range of products and services including individual and bulk annuities, individual and corporate pensions, with profits bonds, onshore and offshore bonds, and savings and investments.
The Challenge
The Strategic Sourcing function was challenged to reduce external spend by £4million to support the Group’s overall cost reduction target in order for it to be able to fund its desired investment in its identified areas for business growth.
The existing Strategic Sourcing function was focused on sourcing new requirements and risk management related to existing third party relationships. It was felt that extra capacity and market expertise across a wide range of indirect categories would help maximise the chances of achieving the savings targets. Therefore Pru engaged Proxima to focus on identifying cost saving opportunities in its cost base. Proxima replaced an existing service provider which had already had the opportunity to review all areas of spend.
The transition to Proxima had to be seamless from the stakeholders’ point of view. Initially the difficulty lay in influencing the mindsets and behaviours of the business stakeholders to be willing to consider different opportunities and business solutions for reducing costs without causing them concern that service levels and quality would be affected.
- £4 million savings were achieved plus an additional £1.5m of cost avoidance and additional value
- Stakeholder relationships were improved through the deep category expertise and passion for procurement that Proxima brought to the programme
- The internal Strategic Sourcing team developed a deeper understanding of specific category expertise as well as awareness of a different commercial approach to the procurement role
- A programme of greater supply market engagement has been initiated which should facilitate opportunities for sustained and continuous improvement