Building a procurement function in tune with the creative sector
This is one of the world’s largest entertainment businesses operating in over 40 countries globally across two core lines of business; music publishing and music recording.
Historically the business had a top line, sales-focussed culture and had enjoyed strong growth. However, with the rise of digital transformation and piracy, traditional revenue models began to come under pressure. Further, the growth of streaming, explosion of social media and the resurgence of vinyl and live performances had completely transformed the commercial dynamics of the sector.
The CFO recognised that the organization was highly creative but not highly commercial. In search of creativity, distinct business units and labels were taking distinct approaches. At times this was the right thing to do, however at other times the organization was simply duplicating processes, decreasing buying power and increasing costs for little or no benefit.
The organizational ethos valued creativity and feared that a commercial approach would restrict innovation and growth. The CFO wanted to support the creative process by putting in place commercial support to enable faster and more cost effective decision making. A traditional, process-led procurement approach was likely to fail, so the CFO turned to Proxima for support.
We have been delivering services to this business for over a decade. The engagement started with an initial assessment to understand the culture of the organization and what this meant for the potential opportunity and approach.
We installed a global CPO and a sourcing and category management team to begin the process of transformation. Initially we worked closely with finance on back office processes and costs looking into how to reduce operational expenditure and drive a better customer experience. This meant transforming the supply base and leveraging some of Proxima’s in-house technology to manage sourcing, spend and contracts.
We created a procurement function to be a commercial partner to the organization, assisting stakeholders by making the right thing easy to do. This involved building teams over the course of the relationship to deal with different strategic and commercial challenges such as Source to Pay, Supply Chain, Bespoke Print, IT and AP Helpdesk, Assisted Buying, Vendor Management, International Opportunity Assessments and expanded service delivery in North America
Outcomes and Deliverables
Our relationship has flexed over time to reflect changes in the market and evolving client needs. There have been many $millions of savings achieved. Moreover we have been successful in creating a more commercial culture;
- Reducing overall cost base, which is now held to market levels or below
- Changing attitudes towards cost management across the organisation
- Transforming the supply chain
- Supporting the physical to digital transformation trend
- Innovating e-procurement and process solutions supporting stakeholders
- Implementing sustainable practices
To discover more about digital procurement and how we can help you optimize costs, improve supply chain management and cement sustainable practices – get in touch.