Can you outline why your team embarked on this project and the problem that needed to be solved?
As the largest healthcare company by membership and provider of affordable, high-quality eye care and eyewear, VSP Global wanted to change the way it approached the procurement process to drive better business outcomes. To ensure internal customers continue to receive best-in-class service, VSP’s sourcing team strives to achieve 100% early engagement with the business, as well as its large supply-base. For the VSP team, this means simplifying the sourcing process by making it easier for the business to engage with sourcing and easier for suppliers to submit proposals. VSP needed a solution that would help them manage and streamline workflows so they could focus on building strategic partnerships. They knew they needed to not only change the way they were running sourcing events such as RFI, RFQ’s and RFP’s, but also change the way they were tracking project pipeline, reporting on savings and communicating with stakeholders.
As VSP looked to engage with a strategic eSourcing provider, ultimately choosing Scout RFP, the business needed to achieve four top goals that answered the needs of the global company.
- First, VSP needed to change the way they were running sourcing events such as RFI, FRQ’s and RFP’s to be more effective and efficient.
- Second, the company needed to change the way they were tracking incoming projects and the status of those projects for better visibility.
- Third, VSP needed to change the way they were tracking and reporting savings across the sourcing team to amplify Procurement’s success.
- Fourth, the company needed to change the way Procurement was communicating with stakeholders to provide clarity and buy-in from all lines of business.
How were things done originally and what was the inspiration to innovate the process?
Traditionally, procurement was very siloed at VSP. As part of centralizing procurement and sourcing operations, and increasing the maturity of the team, leadership took a deep look into its tech stack. Unfortunately, outdated, legacy e-sourcing tools — which also had extremely low adoption rates among internal stakeholders — hindered the team’s efforts to get ahead. Because sourcing events were primarily run through email, projects saw little to no collaboration or documentation. Additionally, projects and savings were tracked manually on desktop or through Excel files, leading to cumbersome and error-prone processes. In an effort to support better business outcomes, VSP Global needed to increase business engagement and improve deployment of strategic sourcing practices. Additionally, the procurement team needed a better way to document and capture sourcing activities to improve visibility with upper management as bandwidth discussions took place. Lastly, they needed to capture savings accurately, validate those savings and clearly present them to finance for reporting purposes.
What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)
In order to measure the impact of the eSourcing project, VSP’s Procurement team measures total spend under management, as well as the number of sourcing events on a year-over-year basis. Savings are also tracked on a year-over-year basis to determine the success of each sourcing project.
How you plan to ensure that the new model remains relevant and adapts to the future needs of the market?
As VSP moves forward, the Procurement team plans to continue to move the needle on the adoption of the sourcing toolset within the company, continuing ongoing training around the Scout RFP platform and fostering buy-in through the admin group. On top of this, the Procurement team will continue tracking ROI and engaging with senior leadership within the business and employees of all levels on a periodic basis to provide transparency into the accomplishments and progress of the initiative, in turn, fostering buy-in from the business as a whole. Finally, VSP also plans to continue innovating alongside Scout RFP, providing the critical feedback needed for product developments that better meet the needs of internal stakeholders. This will allow the company to optimize its digital sourcing solution to create a comprehensive platform that meets stakeholders where they are in the sourcing process and provides streamlined, transparent processes for more efficient Procurement practices.
What advice do you have for those who may want to implement this innovative approach in their own organizations?
Develop a strong value proposition statement when going after technology and digitization initiatives. Procurement is fundamental to VSP’s bottom line. Through the implementation of Scout RFP, VSP saw better business engagement, increased cost savings, validation, and reporting. It has also helped the team stay in compliance with the indirect purchasing policy, gaining recognition from internal audit and with executives. With these tools at the forefront of their business strategy, VSP’s Procurement team now has the ability to better capture and demonstrate the value of the function to the executive team, establishing Procurement as a strategic player in business strategy. This project has enabled VSP’s Procurement function to enhance its offerings, deliver an ROI of 700% plus, achieve savings on spend under management year-over-year of approx. 12 to 15%, focusing more on strategic sourcing activities and improving internal business relationships, rather than spending countless hours shuffling through emails. This project also facilitated better employee engagement and enablement because everyone — no matter their title — felt invested in the project and overall success of the company. These factors, both internal and external, drive a competitive advantage for VSP.
What factors do you think are the most important to consider when innovating supplier performance?
Collaboration by having open/honest conversations is key to innovating with suppliers. Too often, suppliers are excluded when companies try to solve problems internally. Once the customary NDA’s and contractual commitments are taken care of, companies must start bringing suppliers earlier in discussions around roadmap and future strategy as well as participating in supplier executive briefings and customer communities. VSP Procurement actively participates in the customer advisory board for Scout RFP, allowing the company to continually engage and innovate using the product platform, as well as learn from other customers as to what enhancement they are making to their sourcing processes. For VSP, the outcomes of implementing a Cloud based, intuitive, easy to use eSourcing solution aligned with internal expectations and, in some cases even exceeded expectations. Specifically, the length of implementation in weeks versus competitive solutions being months/years and the pace in which the team adopted the toolset exceeded expectations. Compliments to Scout for providing an agile, intuitive, self-service based and quick to implement solution.