After separating from Thomson Reuters, Refinitiv embarked on a journey to transform its business and meet efficiency targets. Faced with managing thousands of suppliers in their tail spend, Refinitiv needed to add automation to the sourcing process and start getting more spend under management.
Refinitiv is a market data and insights company that provides financial market information and technology to tens of thousands companies worldwide. It was founded in 2018 after being spun off from Thomson Reuters.
After being separated from Thomson Reuters, Refinitiv’s procurement team had aggressive savings targets, while also looking to handle higher volumes of requests through improved procurement processes. They looked to their tail spend, where they had a few thousand suppliers and no competitive sourcing, to both unlock hidden cost savings and gain efficiency. There was a lack of visibility into transactions less than $100,000, as all of these purchases were sent directly to payments. Knowing they needed an innovative solution, the sourcing team engaged their Sourcing Center of Excellence colleagues to bring in the necessary expertise.
When analyzing their tail, the teams quickly realized that attempting to manually consolidate their entire vendor pool would be too inefficient, and adding more headcount to manage this spend was not an option. Instead, they wanted to find a way to leverage the intelligence within the organization without requiring category managers to do too much additional work. The Sourcing Center of Excellence recommended that they consider technology solutions that could automate more of the process and offload the manual effort that is traditionally required with tail spend. They turned to Fairmarkit after being referred by peers, and saw the unique fit for their problem. “I look at every digital solution from the lens of user adoption. Whether the solution is simple enough and intuitive enough to work well with the users and be an extended hand of the user. Fairmarkit was beautiful, user-friendly, and easy to adopt in our environment, and understandable for our many vendors,” said Pavan Goswami, who leads Global Sourcing Transformation at Refinitiv.
Implementing a cutting edge solution to a large procurement organization posed its own challenges from a change management perspective. David Zullo, Head of Global Sourcing, explained “part of the value of Fairmarkit is that it is a different way to approach an age old problem...and to convince [people] that an automated solution will work and is worth investing in can be a challenge.” They decided to approach it with a phased roll-out, starting with all purchases below $25,000, then quickly scaled to $50,000 and finally $100,000 and less. “It was pleasantly painless...I thought it was going to be a lot more time consuming but it actually was very fast and I didn’t get a lot of noise about it so it was very positive,” Zullo continued.
As David Zullo puts it himself, “I’m a finance guy and everything is ROI, so I needed to see that.” That ROI was quickly realized as Refinitiv achieved 10% in identified savings over the course of 5 months of usage. In addition to hard cost savings, the team also experienced significant process improvement. Lower dollar value purchases were being sourced out to preferred suppliers automatically. As requests come in, Fairmarkit recommends vendors and manages the sourcing process, from bid invite to submission. This way, category managers only need to award the business without the manual back and forth.
Despite initial fears of slow adoption, Pavan was impressed with how quickly and easily the tool was embraced internally, “It didn’t require a lot of change management or training for our users. After a single training, they were able to use the tool on day one.” In fact, the teams have adapted to this new approach very well. There was even an unexpected result of implementing Fairmarkit. As Zullo stated, “One side effect, that has nothing to do with savings, is the excitement around implementing something new and being on the forefront of something that they can bring to other companies throughout their careers.”
