Lloyd's of London has extended the scope of its outsourcing
arrangement with Coflex
to include the procurement of office services and supplies. The decision
is part of a major modernisation programme, launched by the Corporation's
Chief Executive Nick Prettejohn, to restructure the organisation and refocus
its activities on key business objectives
Lloyds manager of purchasing and contract services, Phil Maidment,
said the decision to outsource the purchasing function was taken after
considering the changes within Lloyds and the potential benefits
from the emergence of e-procurement systems, and agreeing that these could
be best realised through development with a trusted service partner: After
deciding that outsourcing was the right thing to do, the selection of
Coflex as the supply partner was logical as the purchasing activity complements
the contract services activity which we outsourced to them earlier in
the year." (see
News story)
Under the outsourcing arrangement completed in February, Coflex took over
management of the Corporations extensive property services operation.
This involved the transfer of over 70 staff and an annual budget in excess
of £10m. The procurement contract covers all office consumables
and resources such as print, travel and cars not covered by the existing
arrangement but excluding IT and telecommunications.
Alan
Newton, Coflex director of change management, said: Many organisations
with small teams handling large procurement spends are now realising that
it is possible to both reduce costs and improve the service their procurement
departments offer to the rest of the business.
The traditional reasons for keeping procurement in-house
no longer always bear close scrutiny, and we are talking to a number of
other businesses which are following Lloyds lead and re-examining
their own arrangements. Because of the potential economies of scale and
improvements in service levels, procurement outsourcing to suitably qualified
specialists is likely to increase sharply. Procurement is not a core business
activity, but it is an area where even modest savings can be worth millions
of pounds.
Richard Byatt
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