Scope
Outsourcing – Managed Service
Industry
Private Equity
introduction
PE client with £30b assets benefited from our procurement outsource service to manage in-house buying activity, under pinned with spend and contract management solution to support visibility, manage risk and optimise costs.
Business Challenge
Our client is a prominent alternative investment firm with $30bn assets under management focussing on private equity, credit, real estate investments across North America and Europe.
They benefited from a procurement outsource service to manage in-house buying activity, under pinned with a spend and contract management solution to support visibility, manage risk and optimise costs. Total budgeted 3rd party spend in scope was €25m per annum
7 Step Solutions was well equipped to support this requirement with its managed service procurement offering. 7SS had a positive relationship with Private Equity business demonstrated from working as a flexible resource solution within the portfolio for the prior three years.
An initial 2-year agreement to supply a procurement managed service started in January 2024 and in line to be renewed from a tactical 1st Generation Managed Service to a more comprehensive 2nd Generation Managed Service.
Our solution
7 Step Solutions was hired as the client’s outsourced procurement function to provide seamless, ongoing operational support. The solution was built on four key pillars: leadership alignment to define ongoing procurement needs; process excellence to shape sourcing approaches; commercial execution leading competitive tendering and negotiation; and risk mitigation in coordination with legal counsel. This was all underpinned by monthly reporting and the implementation of a Contract Management solution to ensure continuous cost optimisation and compliance visibility.
Define ongoing procurement needs in coordination with IT, Finance, Office teams.
Support with market knowledge and procurement operational process excellence to help shape sourcing approach and align with the private equity programme to maximise value.
Competitive quoting: Lead tender / negotiation activity for the business where required.
Contracting & risk mitigation: In coordination with client Counsel, develop good practice contracts that protect the client interests and are in line with best practices to mitigate risk (e.g., GDPR, regulatory, cyber, etc.)
Reporting: Monthly reporting on project and implementation status (e.g. cost savings projects, RFPs, contracts, etc.)
Implement & maintain contract management solution to ensure visibility of all firm contracts.
Leadership alignment and engagement with budget owners, IT, Legal and Finance leads.
Outcomes
Success of service has resulted in ongoing discussion to renew from a tactical 1st Generation Managed Service to a more comprehensive 2nd Generation Managed Service covering greater scope of global spend, process management and M&A support.
Reporting
Monthly reporting on all Procurement activity including addressable spend, initiatives, RFx processes, contract management, cost savings and project activity.
Spend
30% increase on spend under contract from initial baseline
100 contracts consolidated in year 1 from across the PE business and documented in a central repository
Cost Savings
Audited cost savings delivered consistently to the P&L as a ROI of 4:1 on the managed service investment.