Brisbane City Council (Australia): Strategic Assessment

Brisbane City Council (BCC) is one of the largest councils in the Southern Hemisphere, serving a population of 1 million with assets of AUD$14 billion, and an AUD$2.2 billion annual budget. BCC is a successful council with consistently high levels of customer satisfaction and 82 percent of workers satisfied with the council as a place of work.

Challenge
However, BCC was not satisfied with its financial performance. Revenue from rates and operations were declining while expenses were increasing. A Strategic Planning session considered one scenario where the council could fall into deficit by 2009.

Approach
A.T. Kearney conducted an organization-wide review and identified three key issues:

• Strategic procurement practices were under-developed and cost the organization tens of millions of dollars per year
• A series of activities performed by the council were peripheral to the core business and did not deliver value for money
• The organization’s model and key processes were outdated and created unnecessary costs

Ten initiatives were designed to address these issues and deliver a step change in the cost base of council operations.

As part of the program, A.T. Kearney assisted BCC to establish a Strategic Procurement function, recruit its first Procurement Executive, and implement the first two "waves" of Strategic Sourcing.

Results
The Strategic Sourcing program successfully delivered in excess of 15 percent cost reductions from simple categories, such as print, desktop computing and telecommunication, through to complex categories such as waste management, construction and heavy equipment.

Beyond the immediate cost benefits, BCC established a credible, capable and results-oriented Procurement function that continues to underpin its core principle of "value for money."