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Proxima helps Activision Blizzard create value and achieve sourcing success
Bertrand Leroux, Activision BlizzardJohn Mathew, Proxima
© Proxima 2013. All rights reserved.
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About Activision Blizzard
The company Activision Blizzard is a leading publisher of video games and a distributor of interactive entertainment
Revenue $4 billion+ in Calendar 2012
Employees 7,000+
Ticker “ATVI”
Did you know? Call of Duty has been one of the most significant entertainment events of each of the last six years. Call of Duty Black Ops 2 grossed $1b in worldwide retail sales in 15 days"
Total sales for the Call of Duty franchise have exceeded worldwide box office receipts for “Harry Potter” and “Star Wars” – the two most successful movie franchises of all time
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Proxima / Activision engagement
Engagement scope
Activision Blizzard selected Proxima in 2012 under a multi-year engagement to provide:• Strategic sourcing• On site change management• Category expertise• Sourcing administration support for indirect spend
Major areas of indirect spend
• Marketing • Video production• Media• POS• HR• Information technology• Professional services
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Aims: What will you get from this session
Hear lessons learned from building a sourcing function in a highly creative no-mandate
environment
Understand how the sourcing organization has enabled rather than hindered success
Learn what the wider business impact has been on Activision Blizzard
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Environment before transformation
1. Spend/ categories influenced was small2. Responsibility for sourcing sat with managers along with day job
1. No systematic approach to reap innovation from suppliers2. Little involvement in business planning led to increases
1. Inappropriate suppliers used for operationally critical services2. Inability to ensure supplier delivered contracted business outcomes and savings
1. Limited spend data visibility and analytics2. Lack of information in place to track and trap requirements
Commercial
Measurement/Control
Technology Innovation
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Drivers for sourcing transformation
1. Evolution of gaming industry and price points require quicker reaction time2. Digital impact on gaming business 3. Integration commitments
1. Cost management a key aspect of culture2. Improve supplier costs and service levels3. Free up valuable resources in Marketing, IT and HR to focus back to core functions
1. Management saw significant opportunities for improvement, in both financial and non-financial terms
1. In order to maximize value, company adopted a centralized structure2. Management recognized collaboration with stakeholders as key to long term success
External pressures
Opportunity
Organization impact Internal pressures
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2013
2014+
2012
• Sourcing viewed as a trusted business partner aligned with BU success
• Protection and enhancement of the reduced cost base
• Openly seeking innovation from suppliers
• Professional category management approach through engaging sourcing
• Suppliers become allies
Activision Blizzard target state
Extending sourcing’s influence:
Into new categories
Across geographic borders
Across business units
Across functions
• Significant savings delivered and taken to the bottom line
• Balance of power shifted from suppliers to Activision Blizzard
• Sourcing activity devolved across business units
• Undertaken in an inconsistent manner
• Limited efforts to consolidate or leverage spend
• Loss of value
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To view how the challenge was answered and the resultsclick here
© Proxima 2013. All rights reserved.