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Learning How E- Procurement System - Purchase Plus Enhance Strategic Performance of InterContinental...

Date post: 15-Jul-2015
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the client InterContinental Hotels Group Australia (IHG) is part of the global entity which serves millions of guests each year. Currently, IHG operates three (3) trusted brands ranging from the Holiday Inn hotels, Crowne Plaza hotels to luxury award-winning InterContinental hotels and resorts. With its success in Australia, IHG has been ramping up its expansion with the expected introduction of an additional brand Holiday Inn Express. This involves a plan of opening 15 sites under this brand over the next five years. the challenge With multiple brands representing over forty (40) hotels across eleven (11) locations, IHG’s operation is very complex and wide in scope. This holds true for its purchasing process where hundreds of decision makers make thousands of purchasing decisions everyday. Suffice it to say, effective control is critical for managing the bottom line. The company works diligently to secure the best arrangements with suppliers. This includes pricing arrangements and critical brand standard control appropriate to the exact requirements of each brand managed by the group. If the individual sites do not comply with contracts, then the client is susceptible to huge amounts of loss. Service and product delivery can also be compromised and often there is inconsistent quality of goods used which reflects poorly on brand and quality. Deviation from contracted suppliers and products can disrupt reporting and also impact the information flow to financial and payment systems. This has major effect on timely and accurate decision making, supplier relationship and invoice payment. Change management including inevitable staff turnover, vendor change and product modifications, if not effectively managed, can negatively affect operations and compromise the level of customer service. Lack of visibility over line level spend data also makes collaboration across business units extremely arduous especially with product specification and order consolidation. Opportunities to negotiate, save on costs and increase buying power are greatly diminished. IHG requires a capable solution to suit the hotel’s extremely complex purchasing environment. It will also greatly benefit from a solution provider who can deliver dynamic and flexible support that is focused on achieving goals in line with customer priorities. InterContinental Hotel Group Australia (IHG) Class Six (6) 5-star Hotels Twenty-six (26) 4-star Hotels (including 15 upcoming) Eleven (11) 3-star Hotels Website www.ihg.com www.marketboomer.com case study Our expectations on delivering contract compliance have been exceeded and we have also reduced head count by 1.5 staff at all properties.” Thomas Connor, Group Purchasing Manager IHG
Transcript

the clientInterContinental Hotels Group Australia (IHG) is part of the global entity

which serves millions of guests each year. Currently, IHG operates three (3)

trusted brands ranging from the Holiday Inn hotels, Crowne Plaza hotels to

luxury award-winning InterContinental hotels and resorts. With its success

in Australia, IHG has been ramping up its expansion with the expected

introduction of an additional brand Holiday Inn Express. This involves a

plan of opening 15 sites under this brand over the next five years.

the challengeWith multiple brands representing over forty (40) hotels across eleven (11)

locations, IHG’s operation is very complex and wide in scope. This holds

true for its purchasing process where hundreds of decision makers make

thousands of purchasing decisions everyday. Suffice it to say, effective

control is critical for managing the bottom line.

The company works diligently to secure the best arrangements with

suppliers. This includes pricing arrangements and critical brand standard

control appropriate to the exact requirements of each brand managed by

the group. If the individual sites do not comply with contracts, then the

client is susceptible to huge amounts of loss. Service and product delivery

can also be compromised and often there is inconsistent quality of goods

used which reflects poorly on brand and quality.

Deviation from contracted suppliers and products can disrupt reporting

and also impact the information flow to financial and payment systems.

This has major effect on timely and accurate decision making, supplier

relationship and invoice payment. Change management including

inevitable staff turnover, vendor change and product modifications, if not

effectively managed, can negatively affect operations and compromise the

level of customer service. Lack of visibility over line level spend data also

makes collaboration across business units extremely arduous especially

with product specification and order consolidation. Opportunities to

negotiate, save on costs and increase buying power are greatly diminished.

IHG requires a capable solution to suit the hotel’s extremely complex

purchasing environment. It will also greatly benefit from a solution provider

who can deliver dynamic and flexible support that is focused on achieving

goals in line with customer priorities.

InterContinental Hotel Group Australia (IHG) Class• Six (6) 5-star Hotels

• Twenty-six (26) 4-star Hotels (including 15 upcoming)

• Eleven (11) 3-star Hotels

Website www.ihg.com

www.marketboomer.com

case study

Our expectations on delivering contract compliance have been exceeded and we have also reduced head count by 1.5 staff at all properties.”

Thomas Connor, Group Purchasing ManagerIHG

About Purchase Plus

Used extensively in the hospitality market, Purchase Plus is a fully functioned eProcurement platform that provides a complete online marketplace capability for businesses and their suppliers. Business groups may also create private marketplaces to manage the Procurement and spend of multiple businesses and group suppliers in one place.

About Marketboomer

Marketboomer provides an online procurement system and related services for hotels and their preferred suppliers to buy and sell in the most effective way.

Marketboomer is backed by industry experts and extensive experience in many markets including Australia, China, Thailand, Singapore, Malaysia, Indonesia, New Zealand, Fiji, UK, Ireland and UAE. Marketboomer’s customer base includes some of the largest global hotel groups and suppliers.

Contact DetailsSales and Marketing Manager1300 666 [email protected]

Copyright 2014 Marketboomer. All rights reserved. Reproduction and/or distribution in whole or in part in electronic, paper or other forms without written permission is prohibited. All information in this material was correct at press time.

www.marketboomer.com

the solutionUsing Marketboomer’s Purchase Plus provides IHG’ with an easy and flexible tool to manage

compliance with the group’s strict financial control systems and address the client’s audit-driven

requirements. Meanwhile, the system’s ability to collect granular purchasing data in real-time

proves to be invaluable in vendor negotiation, contract management and control.

With highly dynamic operations, the client found real value in Marketboomer’s Customer Success

Team (CST) who builds and provides analytical dashboards specifically designed to help the

client make informed decisions. Marketboomer’s extensive experience together with deep

understanding about the client’s exact requirements allow them to successfully provide support

not only for immediate system set-up but also for analysis, execution and facilitation of technical

changes aligned with the client’s varying demands on an ongoing basis.

Purchase Plus Procurement platform including Supplier Connect, Catalogue Connect and

Peoplesoft Payables Integration helped the client to:

Effectively negotiate and make informed decisions based on instant access to real-time, accurate and comprehensive data.Real time visibility on purchasing trends, requirements, market pricing, supplier performance

and availability of goods enabled informed and instant purchase decisions. While the National

and Regional decision-making committee gained visibility over multi-site purchases, 100 plus

purchasers were also empowered to source their operational supplies. With instantaneous access

to relevant data, decision making and contracts managements were made easier and much more

efficient.

Enable better control and ensure compliance with the purchasing systems thereby ensuring consistency and quality of goods and services.Purchase Plus helped streamline operations making compliance with purchase workflow easier

for all stakeholders concerned. ‘Dynamic’ and ‘locked’ purchasing workflows were established so

that decision makers are still empowered to explore best offers but only from approved suppliers.

Any deviation from contract will automatically necessitate a series of approvals establishing better

control and prevention of rogue purchases.

Enable analysis to better plan purchasing and spend, evaluate supplier and contracts and conduct auditing.With the tool’s Contract Compliance Reporting and report creation facilities, auditing the

purchasing authorities and spending controls are accomplished in a few clicks. A fully searchable

history of purchases is captured which is vital for the planning of future strategic sourcing projects.

Mitigate risks and manage inventory and costsThe solution’s EDI invoice batching to Accounts Payable allows for automatic transmission of

relevant information from purchasing to payment which ensures accuracy. Moreover, Purchase Plus

reduced the time taken to conduct the traditional purchase-to-pay (P2P) process which allowed for

the reduction of purchasing staff headcount – saving 1 to 1.5 FTE per site.

The client also maximised the solution’s other value-adding features such as Recipe Costing,

Inventory Management and Data Warehouse reporting access.

Up to 15% pricing reduction on tactical categories

98% Percent contract compliance

96% Elimination of rogue purchases

24/7 Visibility of Spend Management reporting


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