Inside the Transformation of Procurement at Crawford
Crawford handles $18 billion in claims annually and has a global presence with 700 offices in 70 countries.
Over the past decade, longtime sourcing and procurement executive Adam Crowe has operated on the thesis that industry leaders must transition from a cost-cutting mindset to a value-creation mindset to truly mature an organization. By creating value for everyone within an organization, procurement and sourcing earns a seat at the c-suite table.
Crowe joined Crawford & Company two-and-a-half years ago as the chief procurement officer and global vice president of sourcing. This role provided him the opportunity to expand upon his thesis and work to centralize procurement from the ground up because he had “complete and total buy-in” from Crawford’s c-suite.
“The past two-and-a-half years have been a wonderful experience because it’s allowed myself and the team the chance to learn, grow and expand the role of procurement and own that seat at the c-suite table,” Crowe says.
Based in Atlanta, Crawford has been solving claims handling challenges for more than 78 years, helping businesses keep their focus on people. The company handles $18 billion in claims annually and has a global presence with 700 offices in 70 countries.
Crawford’s services include loss adjusting, third-party administration, managed repair, medical management, catastrophe response and on-demand services. “At Crawford, we’re not just embracing change, we’re leading it,” the company says. “We’re thinking beyond the traditional and bringing together innovative solutions to meet our customers’ needs today while anticipating the needs of tomorrow.”
Changing the Perception of Procurement
According to Crowe, a lot of people in sourcing and procurement are caught in one of two camps: “Saving money is the end all of our existence” or “digitization is an end goal.” He says the new view is understanding that procurement wears many hats and the key is making sure you have the right one on at the right time.
“I think some of the errors that professionals in procurement have made is they’ve been so focused on saving, digitization and centralization that they haven’t looked to understand those are the table stakes to get in the game,” Crowe says.
At Crawford, Crowe focused on building the sourcing and procurement department through centralization and digitization. The old way of thinking of centralization is to pull all the resources and decision-making to a central point and push them back out.
“To me, that erodes the concept of centralization,” Crowe says. “My mindset is that centralization — especially in a multi-site or multi-country setting — entails following a common policy and process, utilizing the same platform and the ability to share best practices.”
The vision of Crawford is not a core group of resources at the home office pushing down decisions, but a group of individuals supporting regional centers of excellence that offer backup to other procurement teams as work ebbs and flows. “Centralization means we are going to do things on a common platform and we are going to have common processes, leveraging those 70 countries and 70 different practices, and sharing best practices across the globe,” Crowe explains.
To date, the company has resources in Atlanta, Toronto, London, Chihuahua and Mexico City, Mexico. Its goal was never to have everything under one roof in Atlanta. As Crawford moves into fourth-quarter 2020 and into 2021, the company will enter its final phase of establishing centers of excellence in Asia Pacific and the European Union.
The second piece to Crawford’s procurement transformation is digitization. To have a common platform, there has to be one tool that everyone is going to use. “I read an article the other day and there was a statement that if you can’t run a report instantly that shows all suppliers and spend for any given timeframe you are in trouble,” Crowe says. “I tend to agree with that statement. Of course, it’s easier said than done, but it is the cornerstone.”
Crawford invested in Coupa’s procure-to-pay solutions and currently has two countries live and six more targeted to go live in the next nine months. The company anticipates having 98 percent of its spend running across the system by mid-2022. “The system is performing even better than expected and I am really looking forward to having the global visibility,” Crowe notes.
Develop an Elevator Pitch
CEOs and CFOs — especially of publicly traded companies — have a duty to shareholders to make certain that every dollar is spent effectively and efficiently. “Procurement leaders have to learn to speak in the same language,” Crowe says. “Avoid discussions on cost avoidance and focus your discussions on projects that impact the bottom line.”
Crowe advises procurement leaders to know the budget-operating margins and be able to speak to those projects that are impactful; listen in on all earnings calls to know the pain points and look for ways to create value; and learn to take all the data you collect from all corners of the procurement and sourcing teams and boil it down to salient key points.
“It’s not easy, but I always ask my team to keep refining data until you have a 45-second message,” Crowe says. “Many of the sourcing and procurement discussions I have with the CEO may occur in the elevator or hallway walks, so being able to explain something in 45 seconds not only shows you have a grasp of the material, but these are busy people — be respectful of their time.”
In addition to internal communication, Crawford’s leadership also considers how to talk to its customers and suppliers, and make procurement a core part of that discussion. “How do we integrate with our business leaders and talk to them about the things that are impacting their daily discussions with our customers?” Crowe asks.
For example, Crawford converted one of its network printer customers into a supplier and reduced its cost by 22 percent. The company is in the process of doing something similar with its wireless provider, converting them to a customer and decreasing cost by 25 percent.
“As chief procurement officers, we need to educate and act differently,” Crowe says. “We need to pivot from being the save and digitization person and be that value-add person. We are the ones who convert customers to suppliers and suppliers into customers by being able to speak the language of the executives while making sure they really see the value. I think that’s where all of procurement needs to move and creating value is the way to get the seat at the table.”
Through those discussions, Crawford has established a supplier diversity program, set tighter goals and is in the process of establishing a sustainability program it plans to launch next year. “Having those conversations in advance gives our leadership the ammunition and talking points to have those important discussion with our existing customers,” Crowe explains.
Crawford has also started focusing on pivoting its suppliers to become its customers and vice versa. “Who are our core suppliers, do they have a need for Crawford’s services and how do we get our people in front of the key players,” Crowe says. “Sourcing brings value by spending time in Salesforce, understanding where there is opportunity to bring business to existing customers and suppliers, and if there is opportunity to move suppliers to customers.”