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  • Writer's picturePeter Smith

MONDAY 1st NOVEMBER 1999: Outsourcing Procurement - A Good Idea?

We start working on the Redgrave project with the Andersen Consulting team. Their main people on the project are the two Mikes. Mike E has been working with us for a while on the procurement business case. He is 30-ish, very bright, hard working and at first sight appears to be a fairly typical, pleasant but slightly dull consultant, but actually he has hidden depths; he is into strange rock music and has a great sense of humour.

Mike M is South African, slightly older and has an operational management background. He is the no-nonsense, get things done type; but again, he is a good guy. They are a good team and very easy to work with.

The fundamental question we have to answer is how would we organise and run what would effectively be an outsourced provider of purchasing services to NatWest? Although NW would have the majority stake, I think we have to consider it as an outsourcing, as we would be operating at arm's length and we might one day want to float or sell the venture. We also have to think about setting it up to be pretty much self-standing, as we will be going after other, non-NatWest clients. We need to show them that we operate independently if we are to have credibility.

I begin to pick up comments from the other areas being considered under Redgrave. The head of RIS (our software development arm) is apparently very negative about the idea, as are various others involved in some of the Retail Bank back office discussions.

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