No one knows the music industry is changing better than Universal Music, the largest music company in the world. "We've seen more change in the last two years than we did in the last 20," says David Bryant, CFO. "The market situation made us question everything."
This is a radical change from just a few decades ago "when costs weren't at the top of everybody's list," says Bryant. Until a few years ago, the music business enjoyed high margins, burgeoning sales, and growing profits. "Our financial success fostered a culture of focusing on creative flair rather than commercial best practice," says Bryant. "In order to maintain our commitment to A&R (Artists & Repertoire, the lifeblood of the business) and marketing, we needed to cut costs."
The situation was complicated because each label had adopted its own procurement policy. That meant the same suppliers served different parts of the company on different terms. "There was no consistency in purchasing policy," says Bryant. "We knew we had to upgrade our procurement capability rapidly to meet the organization's need for savings," says Bryant.
Source: Outsourcing Journal, http://www.outsourcing-journal.com