For fast-growing companies, top-line growth needs to be balanced by bottom-line results. That’s why global customer experience leader Genesys engaged Efficio to identify and deliver significant cost savings - and the impact on their bottom line and business strategy exceeded their most optimistic expectations.
As part of its strategy, Genesys made a major acquisition that consequently enabled rapid progression towards its growth target and also unlocked significant value through people synergies. However, it was recognized that third-party spend could unlock further significant value. Therefore, Efficio was engaged to support the chief procurement officer (CPO) to build a new procurement function and identify further savings opportunities across the business.
Genesys is a global omnichannel customer experience solutions company, with the world’s leading cloud-based contact center platform. Genesys powers more than 70 billion customer experiences each year for organizations in more than 100 countries.
Genesys had an existing procurement team with a mainly transactional focus on managing tenders for different parts of the business. Following the acquisition of a major competitor, it was clear that a new approach was needed to leverage the synergies and support the strategic direction of the business. Efficio was engaged to help.
The first step was to conduct an initial Opportunity Assessment, which identified savings opportunities of 8.5% across a range of categories. One of the key challenges to realizing those opportunities, however, was the wide range of stakeholders with different objectives and expectations. For example, in customer-facing areas in particular, it was important to go well beyond a traditional cost-focused approach to ensure the best possible customer experience. Achieving this required a different, more sophisticated approach to sourcing and negotiating with vendors.
At the same time, the CPO was building a new procurement function better suited to the company’s strategic needs. Part of Efficio’s role was to use its category and procurement expertise to help shape the new team and set it up for success, including organization design, training and on-going mentoring to transfer skills and knowledge.
14% reduction in third party costs
The savings program was designed in two waves – a first wave across five categories selected to cover all areas and introduce the process, and a larger second wave across a further 15+ categories covering all spend and maximizing value.
Both waves were driven by the same rigorous approach:
- Working closely with the business (over 100 stakeholders) to understand the opportunities and communicate shared targets
- Detailed data collection on both demand and needs (2.6 million lines of data were reviewed) to present the full opportunity to the market
- Engaging the full market to understand the complete range of offerings (over 330 suppliers engaged)
- Orchestrating all stakeholders (from execs to experts) to give ‘one message’ to the market in the more than 45 RFPs and negotiation processes
- Creating a credible threat to incumbents to maximize savings while minimizing operational impact and change
- Developing tools and processes to ensure savings were delivered – e.g. savings ‘dashboards.
However, different levers and tactics where applied as needed for the various parts of the business. For example, in some instances when substitution was not possible or credible, Efficio built a compelling partnership story based on detailed usage data and business objectives. This delivered not only improved commercial arrangements, but also stronger long-term strategic relationships.
Efficio also used its extensive IT knowledge and experience to build a case for technology upgrades in some areas, rather than simply renegotiating the status quo. These required upfront investment but delivered significant future savings. They also unlocked new value for Genesys by helping accelerate the business strategy.
We were looking to establish Procurement as a value-driver to the business on our ambitious growth path while capturing the big savings opportunity identified. The Efficio team has done a tremendous job establishing credibility with our demanding stakeholders through their deep knowledge of all categories touched. This has been the key to out-do all our expectations in terms of savings, and has been a great launch pad for the Procurement function we have built on the back of the program.
Efficio’s combination of in-depth procurement expertise, singular focus on understanding the business, and rigorous, data-driven approach exceeded expectations from the start, delivering a 14% savings – exceeding the initial target by a factor of 1.7 and offering a range of strategic benefits.
The success of the first wave addressing one-third of the identified spend, which delivered 15% of savings against a target of 10%, provided a significant boost to the credibility of project. It also helped build the credibility of the expanded in-house procurement function, and transformed the perception of what procurement could deliver within the business.
But impact went even further than that. As part of the project, Efficio and Genesys established a new, best practice procurement capability. They worked alongside the Genesys CPO to create job descriptions, interview candidates and upskill the new team through training and mentoring. They also introduced new, best practice tools and processes.
From a longer-term perspective, this demonstrated the ability of procurement to add real strategic value. As a result of the analysis, Genesys were able in some cases to accelerate strategic shifts (enabled by new technology platforms) and build stronger partnerships with key suppliers. The success of this proved that procurement could add value to the top-line growth of Genesys, as well as its bottom line results.
As a result of this, the project team were given more freedom to drive maximum value in the second wave. This was reflected in 14% savings delivered over the addressed spend - more than double the company’s initial expectations.