Permanent TSB is a provider of personal financial services in Ireland. At the start of 2020, its procurement function launched “Project Titan” to deliver €10m in annualized cost savings by 2023. However, it became quickly evident that a program of this size and scale required additional resources, so Permanent TSB’s procurement team partnered with Efficio for expertise and support.
At the beginning of 2020, Permanent TSB’s 11-member procurement team was inundated with requests for tactical support and operated reactively; it lacked the capacity to proactively drive strategic sourcing, influence cost, and support the profitable growth imperative.
In order to achieve €10m annualized cost savings by 2023, Procurement needed to reposition itself from an administrative function to a strategic one within the business and introduce technology to drive data-based sourcing and supplier management decisions.
Permanent TSB wanted a partner that would work alongside them to achieve their goals. “The idea that the Efficio team would be able to deliver on-the-ground support – like roll up their sleeves, be part of the team, work with us, as opposed to being consultants, just presenting more and more PowerPoints and things that we would then have to deliver … it felt like an organization that we would want to work with,” said Rachel Dolan, Head of Procurement and Supplier Relationship Management.
Working with Efficio, the integrated Permanent TSB team delivered:
- €12m in annualized savings by August 2021, overshooting the €10m cost savings target for 2023 – and a more cost-conscious organization that has continued to generate year-on-year savings, all tracked and agreed with Finance
- A digital transformation, where technology is leveraged to support data-driven decisions
- A shift in the business’s perception of Procurement’s position; now recognized as performing a strategic role, Procurement is able to influence profit-driven decisions at the C-suite level
To our CFO, cost optimization and savings were key drivers behind our focus on overhauling our approach to procurement. Since May 2020, we’ve run a cost optimization program targeting €10 million over three years. We achieved that in less than 18 months, so it has been a real success story. So much so that we are moving into the second phase of our relationship with Efficio in a hybrid-managed service.
Improving access to expertise: Efficio subject matter experts were deployed to provide insights to enable faster decision-making, inform more effective strategies, and support supplier negotiations. They leveraged their knowledge of category and industry benchmarks from comparable organizations to inform should-costs throughout supplier negotiations.
- New strategic sourcing methodology: Efficio’s eFlow strategic sourcing methodology was implemented, informing greater initiative insights and enabling the development of creative sourcing strategies. Procurement consolidated scattered suppliers to secure resources from the most competitive vendors and created strategic partnership models to consolidate purchases across the Bank’s projects.
- Implemented new technology: eFlow, Efficio’s procurement software, was deployed to manage initiatives, supplier landscape and volume consolidation to drive cost reduction.
- Improving customer experience: Much of the work done by the procurement team has streamlined the way users in the business buy the products and services they need. Users now have clarity on the buying channels available to them and the best cost options.
The Permanent TSB-Efficio team adopted an untraditional delivery model to achieve these results. Unlike typical consulting services – where the consulting team is primarily advisory, and the client executes on the recommendations – Efficio defined strategies and delivered against the targets jointly with the Permanent TSB team.
I’ve really seen first-hand the value that the procurement function can bring. Reporting plays an important part in the procurement process because it highlights the work that’s been done, and it helps to build trust.
Incumbent mindsets from non-cost-conscious stakeholders were a significant obstacle; they saw the shifting of Procurement to a strategic position as a threat, rather than a support to their own objectives. This was further aggravated by the challenge of mid-COVID remote-only collaboration.
To address these challenges, Procurement translated the goals of what was initially seen as a procurement-only project into the language of Permanent TSB’s core values that the whole Bank could embrace.
- United: The joint Permanent TSB-Efficio procurement team leveraged its strengths to drive progress.
- Open: It introduced project governance forums, which promoted collaboration and provided transparency over the status of initiatives.
- Commercial: It developed a partnership model with selected IT and professional services vendors, to benefit from a consolidated supplier landscape and volume consolidation to drive cost reduction.
- Courageous: The joint procurement team surpassed the aggressive top-down annualized savings target of “€10m by 2023” early, by August 2021, driving c.€12m of savings.
This successful project has transformed Procurement into a trusted, strategic partner that drives commercial excellence within the Bank.
The project’s success has also meant Efficio and eFlow have continued to play a significant role at Permanent TSB, helping to automate some of the mid- to low-complexity sourcing tasks that previously occupied the procurement team’s time. With Efficio and eFlow acting as an efficient engine servicing procurement needs, the Bank’s procurement team can now focus on delivering high-impact strategic value for the wider business.
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