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Cost optimisation and time savings through Amazon Business
Capita is a consulting, digital services and software business, operating in the UK, Europe, India and South Africa. Employing over 61,000 people across more than 260 different businesses and six different divisions, Capita delivers innovative solutions and simplifies the connections between businesses and customers. Typically known as an outsourcer primarily for the UK Government, the business is broadening its service offering - both internally and through acquisition.
There are two methods of payment across Capita for low-value IT peripheral spend – either the procurement team manage purchase requests from all six divisions and its multitude of companies, or local teams can purchase from pre-agreed suppliers without the procurement team's involvement. Historically, this meant the function was challenged with last-minute requests for low-value purchases and struggled to identify an inventory that all areas agreed on. Each request needed PO approval before purchasing, costing the business an estimated £75 per PO and taking an average of 17 days to process from order to receiving the product.
“Introducing Amazon Business for Capita’s tail spend IT peripherals has reduced our procurement costs by over £225,000 within the first six months. It has also cut purchasing time by 82% - something which has gained fantastic feedback from our customers and internal stakeholders.”
— Justin Chandler, Capita Procurement Strategy
The COVID-19 pandemic created unforeseen challenges for Capita to continue to procure on behalf of its customers and internal stakeholders. It also created an impetus to accelerate the usage of digital platforms such as B2B marketplaces to reduce procurement process time, ensure price competitiveness and ensure financial compliance. The pandemic also highlighted the need for centralised payment methods that remove the need for PO approvals.
As a large multi-site business, the solution needed to be able to scale to both customers and internal stakeholders as well as satisfy financial compliance processes. As Capita’s Chief Procurement Officer, Shahzad Saleem states: “As the CPO I’m looking to embrace digital platforms that better serve our customers while maintaining cost competitiveness.”
During the pandemic, when demand and prices for items such as PPE and IT supplies surged, Capita needed a solution that allowed them to procure what was needed, while maintaining compliance on costs and purchasing processes.
Beyond the pandemic, Capita’s Procurement Strategy in 2020 aimed to raise the value provided by the team. To achieve this, removing low-value transactional purchases as part of the day-job was essential, freeing up senior category managers to focus on strategic relationships with key suppliers, tendering on new suppliers and renewal opportunities. This, in turn, generated additional savings in 2020, but more importantly enabled strategy to be established for 2021 delivery.
“As the CPO I’m looking to embrace digital platforms that better serve our customers while maintaining cost competitiveness. Purchasing through Amazon Business has enabled my category team to focus on the more strategic priorities within the procurement function, rather than get encumbered with low-value spend.”
— Shahzad Saleem, Chief Procurement Officer, Capita
Capita introduced Amazon Business in September 2020 and rolled out initially to the core buying team who purchase on behalf of the 45,000 UK employees. By introducing a new Simple strategy that embraces digital procurement as well as utilising P-cards, they were able to deliver better results for their customers and internal stakeholders. As Shahzad Saleem says: “Purchasing through Amazon Business has enabled my category team to focus on the more strategic priorities within the procurement function, rather than get encumbered with low-value spend.”
By introducing Amazon Business for tail spend IT peripherals, Capita benefitted from significant cost and time savings within the first six months of adoption:
An example of how this benefitted their customers was just before Christmas when the UK Fire & Rescue Service wanted to upgrade their gym equipment across 17 UK sites. The request came in on the 20th December and, despite a number of restrictions with deliveries to classified government locations, an agreement was reached with the UK Fire & Rescue team on the 21st December, with all purchases made the same day. These were delivered through Business Prime within two working days and were on site, ready for use, by 24th December. Capita had fantastic feedback not only from the UK Fire & Rescue Service, but also their internal operational teams, explaining how simple the process was throughout.
In 2021, Capita have set two key priorities to grow the benefits of Amazon Business and to streamline their processes and optimise cost and time savings further: 1) Enable single-sign-on (SSO) capabilities to allow for rollout to all employees and teams and, 2) expand category adoption from IT peripherals to all tail spend items. By introducing SSO to the business, it will decentralise purchases while allowing financial controls and guardrails to be embedded in an automated and trackable way.
And the feedback from all users speaks for itself, as Suraj Naik, Procurement Operations Director says: “The feedback from both the operational team and internal customers has been very positive – so easy to use and understand.”
“The feedback from both the operational team and internal customers has been very positive – so easy to use and understand.”
— Suraj Naik, Procurement Operations Director, Capita