Understanding the buyer and the variables they consider in procurement is essential to securing and retaining strategic accounts. At the inaugural SlatorCon London on May 9, 2017, over 60 senior industry executives were treated to a snapshot of how the procurement brain works by one of the language industry’s largest buyers.
With USD 7.8bn in revenue and 50,000 professionals serving clients in over 100 markets, QuintilesIMS is by far the world’s largest clinical research organization. It purchases millions of dollars in translation for itself and its clients. The company is said to be one of TransPerfect’s major global accounts.
At SlatorCon, Steve Kirk, Chief Global Procurement Officer at QuintilesIMS, discussed their strategic sourcing process, what category management looks like, centralized vs. decentralized procurement models, and where they place translation in their procurement mix.
He walked participants through the many variables they consider when evaluating a supplier relationship with a Language Service Provider (LSP) and challenged the audience to know how many of these variables are important to both you and the buyer.
Kirk works with his teams in North America, Europe, EMEA and Asia Pacific to manage global and local purchasing and he detailed the process they take to identify, segment and manage Strategic Sourcing. For QuintilesIMS, the five steps are Initiation, Insight, Innovation, Implementation and Improvement.
“Everyone has a slightly different version of the five, six or seven steps that you go through but the flow is pretty much the same,” said Kirk. “Go off, get your data, work out what your category looks like, and try to get together some kind of a business case of what you’re trying to achieve from the category.”
Focusing in on the translation category, Kirk highlighted the challenges they face in building a team. “You’re looking at trying to get together people that are maybe in dispersed geographies, different parts of the business,” said Kirk. “They might be doing marketing translation, they might be doing clinical translation, they might be looking at something that is part of our market research division in the IMS case. [We are] trying to work out how you can get all those different guys together into one room and say right, how do we build a spec here?”
Adding to the complexity for translation is QuintilesIMS’ “fragmented spend across the business.” Kirk said, “You’ve got a fragmented industry, with a fragmented supply base, with a fragmented nature of spend in translation. How do you get your hands around that and work out what you’re really buying?”
“You’re looking at trying to get together people that are maybe in dispersed geographies, different parts of the business” — Steve Kirk, Chief Global Procurement Officer, QuintilesIMS
A large portion of QuintilesIMS’ translation spend is passed through to their clients, i.e. the world’s largest pharma companies, which expect them to be custodians of that spend on their behalf. As such, QuintilesIMS is constantly measuring and analyzing data as it seeks to improve supplier management, achieve economies of scale and leverage buying power.
Sourcing cycles are accelerating from the current 2-3 years, placing even more pressure on vendors. “What we’re driving towards now is a more frequent sourcing process. A more regular challenge to our supply base,” said Kirk. “And we’re going to try to increase our sourcing velocity,” indicating a potential target cycle as short as 12 to 18 months.
Within the supplier management process, QuintilesIMS are using globalization and centralization to build a global supply base and leverage their buying power.
“You typically start with 50, 60, or 100 suppliers doing translations,” said Kirk. “New procurement comes in, category management comes in, a new CPO comes in. Let’s try to use economies of scale, let’s try and bundle together our spend, let’s try to get to one single contract with one single supplier.”