Cost Reduction & Vendor Rationalisation African Financial Services Group

Client Challenge

A leading RSA based Investment & Insurance Services Group with corporate customers across key market segments in 14 African countries made a commitment to their shareholders at the end of 2019 to deliver cost efficiencies amounting to R750 million by the end of 2022. ​

In 2021, they had delivered R450m (c. £22M) against the plan and were looking to engage a cost transformation partner to assist them on the last leg of this journey to identify and implement additional sustainable savings to support the acceleration of their vision, growth and to protect their long-term prosperity. ​

As part of that programme, TORI were engaged to review over R3Bn of 2021 Vendor spend (300 - 400 suppliers, including resource augmentation and software licensing), to identify and execute opportunities to save 5-10% of their total annual spend.

What we did

  • The team conducted a review of the documentation, contracts, and vendors invoices​
  • Performed various sessions with key stakeholders to identify macro-opportunities​
  • Segmented suppliers to consolidate opportunities with a view to significantly improve contracting disciplines​
  • Agreed resource augmentation and associated communications to mobilise vendors and stakeholders​
  • Identified the need for a decommission plan to avoid significant future potential cost pressures​
  • Identified quick wins and priority actions

Outcomes & Results

  • Presented clear recommendations to deliver R164-218m FY '23 savings (5%-6.6% of 2021 spend)​
  • Submitted clear recommendations to improve the control of their current license management policies​
  • Put forward cost savings initiatives e.g. not renewing unnecessary software contracts​
  • Recommended a mobilisation programme of activity that:​
    • Aligned with business planning and portfolio development activity to ensure end-to-end plans and investments are visible to all​
    • Establishes ambitious goals for vendor consolidation, quality, and efficiency improvement​
    • Invests in Vendor Management capability (Contracts Team) to underpin new policies and business performance
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