top of page

Supporting global expansion by establishing procurement function and enhancing profitability

Scope: Transformation - and operational leadership

Sector: Event management & hospitality
Duration: 10 months

Coffee Filters

Business context

The company is hosting worldwide coffee festivals and trade events visited by businesses and individual coffee lovers.​​

The event management division experienced rapid expansion over a 2-3 year period, with further global growth on the horizon. However, this rapid growth exposed significant challenges, including uncontrolled overspending, inefficient supplier management, and operational bottlenecks—particularly a lack of scalable processes.

​

The challenges were partially attributed to a lack of full visibility into cost drivers and ineffective resource allocation across site teams. Moreover, the company operated within a highly decentralised structure, where distinct team cultures led to tensions and a lack of clear direction in the event management business. To some extent, this structure also contributed to errors in profitability calculations.​​​​

​​​

Business case

With 30% year-on-year revenue growth and ambitious global expansion plans, the company needed operational scalability, centralised resource planning, and stronger cost and cash flow management. However, a lack of strategic financial organization and technology hindered these goals. Establishing a procurement function was seen as a key step to stabilise costs and improve operational performance, paving the way for sustainable growth.

​

In the first phase of an organisation wide business transformation program, the company prioritised these critical areas:

​

  • Identifying cost inefficiencies through detailed business analysis

  • Designing scalable Purchase-to-Pay (P2P) processes and setting up a procurement function

  • Formalising supplier relationships and improving service level (supplier performance)

  • Improving cash flow planning and financial reporting capabilities

  • Implementing an automated purchasing system

Business challenges

The core issues stemmed from the company’s decentralised structure, inherited from a merger of two businesses that retained separate organisational, operational, and decision making practices. This setup led to a lack of transparency, fragmented financial controls, and inconsistent profitability measurements.

​

Key challenges included:

​​

  • Start-up culture: Decentralised decision making, fragmented teams, and no standardised processes.

  • Lack of technology: Reliance on manual operations due to limited technological investment.

  • Inconsistent data: Disconnected data flows across regions and teams, making reporting unreliable.

  • Weak financial controls: Finance played a transactional role (invoice processing), with no advisory or FP&A functions.

  • Employee resistance: Expected pushback from staff due to shared purchasing responsibilities.

Business Objectives

In the short term, the company aimed to stabilise costs, mitigate risks, and improve financial planning capabilities.

Long-term goals included building a strategic procurement function that would support global expansion and drive profitability.

​

Key objectives:

​

  • Cost control: Reduce overspending and prevent maverick purchasing.

  • Risk mitigation: Manage supplier and operational risks, improving contract governance.

  • Strategic partnerships: Build long-term supplier relationships for cost efficiencies and growth.

  • Improved financial planning: Enhance budgeting, forecasting, and reporting capabilities.​

Scope of work

Our work focused on a comprehensive Procure-to-Pay (P2P) and operational analysis of the core business line, assessing the impact of creating a procurement function and outlining a structured change plan. We implemented new budgeting processes, supplier governance protocols, and risk controls, while also assuming an operational leadership role to drive the change forward.

​

Key activities

  1. Organisational impact assessment: We evaluated how setting up a procurement department would affect decision-making structures and reporting lines.

  2. Root cause analysis: Collaborated closely with the CEO and senior management to identify the root causes of purchasing inefficiencies and to define strategic operational requirements.

  3. Supplier and cost analysis: We conducted a deep dive into supplier relationships, cost structures, profitability, and operational workflows to identify inefficiencies and improvement areas.

  4. Procurement management framework: We designed a centralised procurement management framework, including the setup of a supplier and inventory database, service performance metrics, and standard operating procedures (SOPs).

  5. Financial planning and reporting: Introduced new budget categories and templates linked to cash flow reporting and the chart of accounts (CoA), helping the finance team better plan and forecast.

  6. Supplier governance and risk control: Established formal supplier onboarding, contracting, and payment approval protocols. Negotiated new supplier agreements and performance measures, fostering strategic partnerships.

  7. Operational leadership: To ensure a successful transition, we provided hands-on leadership and training to promote the new procurement function, both internally and externally.

Allegra2.png

Results

The first phase of the business transformation delivered significant benefits, positioning the company for further growth and operational efficiency:

​

  • Cost visibility: Our analysis provided clear visibility over costs, profitability drivers, and decision making practices, enabling better financial oversight.

  • Informed negotiations and cost savings: New budgeting, quoting, and inventory management protocols led to more informed negotiations, delivering cost savings and enhanced financial planning.

  • Improved cash flow and FP&A: Centralised data and procurement processes improved cash flow management, enhanced FP&A capabilities, and ensured more reliable financial reporting.

  • Risk mitigation: Supplier governance measures and contract management protocols reduced legal and financial risks while improving service levels and planning on both sides.

  • Cultural shift: Standardised procedures fostered better decision making, greater organisational alignment, and stronger supplier relationships, driving an internal cultural shift toward centralised operations.

 

While COVID-19 disrupted plans for further transformation, the procurement function established during this phase significantly improved the company’s operational scalability and positioned it for sustained success.​

bottom of page