TransUnion: realising procurement savings and added value
TransUnion is a global information and insights company that makes trust possible between businesses and consumers and is one of the three largest consumer reporting agencies in the US. “We provide the information that makes the relationship between consumers and business possible,” says Damon Ascolani, Head of Global Procurement at TransUnion.
From credit scores to ID verification, alternative credit data, analytics, marketing, and debt collection strategies, TransUnion is the single source of information for aiding its clients in these areas.
Whilst Ascolani’s current stint at the company began in 2017, he previously worked for the company back in 1998. “I was able to see the company before it became a public organisation,” says Ascolani.
“20 years ago, the company was private and very back office. Today – and ever since it became public – TransUnion has a very entrepreneurial mindset. It’s an older company, but it acts like a startup with an open-minded and innovative culture. Its mission statement is ‘Information for Good’, enabling financial inclusion to people everywhere in the world.”
Procurement’s growing importance in M&A activity
When it comes to mergers and acquisitions (M&A), procurement is steadily becoming an important process both before and after a merger or acquisition. “In particular, this can be seen in the due diligence process, assessing vendor footprints to build a business case for synergies,” explains Ascolani.
“There are also contractual elements, servicing rights with partial divestitures and acquisitions, and I’ve found that the more procurement is involved in M&A activities, the more value we are able to provide due to our expertise in vendor spend and dynamic product suites.
“In this scenario, TransUnion helps organisations to develop business cases for potential M&A activity – we provide the information that is valuable to that discussion. After the deal is done, its then about achieving those synergies, making sure that all vendors are integrated and that our stakeholders are getting the best rates, terms, and overall value from their spend.”
The need for CEO mandates in procurement
“I always say: you would never review a contract from a legal perspective without sending it to your legal department, so why wouldn’t the same apply to procurement for the commercial terms?” says Ascolani.
Procurement is a hard function to integrate throughout an organisation without having top-down mandates. TU Procure, our internally rebranded global procurement team, acts as a centre of excellence for organisations, providing them with a control point to make sure that their stakeholders are getting the best market rates, and the most up to date product and service offerings. “We drive that discussion when it comes to supplier management and assessment. As companies grow, the economic benefits and the risk management benefits of a mature procurement organisation become increasingly vital.”
What makes data management critical to procurement
When it comes down to being successful or unsuccessful in procurement, quality data is at its core. Whether it's understanding cost savings, predicting demand or managing suppliers, data management is critical.
“An organisation can have multiple vendor relationships for a single toolset and central visibility that procurement reporting provides is the key to ensuring tail spend is well managed and vendor synergies achieved in M&A scenarios,” says Ascolani.
“At TransUnion, we help organisations to navigate the noise, aggregating that data into manageable and insightful reports. This is also important for our own supplier diversity reporting at TransUnion.
He adds: “We have a robust process for analysing our data and classifying it, so in order to make an impact, we have to be able to report against a baseline and if you don’t have good analytics, then that can’t happen. Particularly in a growing organisation, you can quickly lose sight of third-party spend, so bringing stability to that and providing reporting is valuable to the decision making process.”
Realising procurement savings and added value
A common struggle for many in procurement is the calculation of savings and value, as well as realising it in a way that people can really feel the benefits. “Every conference I go to, this is always a topic,” says Ascolani.
“It is not always a straightforward proposition, especially in a rapidly growing organisation such as ours, but I find that being able to realise savings so that they are felt comes down to an organisation's relationship with the finance team and stakeholders. Procurement’s value add to an organisation goes well beyond budgetary savings, but oftentimes, this type of savings is the one that feels most real to budget owners and stakeholders. So regardless of your savings methodology, tying it to the budget is key. Once you’ve established the budgetary savings with validation by your finance team, it is much easier to champion the other aspects of the value that procurement provides such as cost avoidance and tail spend management. This is critical so that all aspects of the procurement teams’ value to the organisation are recognised.”
TransUnion over the next 12 to 18 months
Over the next 12 to 18 months, TransUnion will be heavily focused on navigating the complex activities that follow M&A activity. “We’ve conducted a fair amount of acquisitions and divestitures, so there is a lot of work to be done to navigate the challenges of these activities,” says Ascolani.
“But we’re up for the challenge! It’s an exciting time – there is a lot to do, we are leveraging a lot of strategic relationships during this time – and, had we not had these relationships, this process would have been significantly more difficult.
“So the next 12 to 18 months will include merging the organisations that we bought under a single, common operating model, as well as further navigating recovery from COVID-19.”