The FUNKE Media Group's motto is "Passion for Journalism" and that is exactly what it is known for. Since its foundation in 1948, the FUNKE Media Group has been a pioneer with its now 1,700 journalists and 3,800 media creators, who all share the same commitment and enthusiasm for news, media and creativity. In order to optimize its purchasing processes, FUNKE decided to partner with Lhotse.
We sat down with Heike Schönberg, Head of Digitalization and Strategy in Procurement at FUNKE, to talk about the past, present and future of the company's procurement and how the partnership with Lhotse has helped them along the way.
Heike is responsible for defining the purchasing strategy and implementing innovative eProcurement technologies for the entire FUNKE Group. Meanwhile, the focus is particularly on innovations in the field of artificial intelligence. Her passion for working at FUNKE stems from being part of a media company that is at the forefront of many social and political issues. She also has the unique opportunity to build a new and fresh digital landscape at FUNKE and to define and drive new purchasing processes from the ground up.
To find out what the biggest challenges were for FUNKE before the collaboration with Lhotse began, we spoke to both Heike and her team. They told us a story that we hear far too often: The purchasing team faced a number of obstacles, particularly because of the amount of manual and sometimes obscure work that the buyers had to do.
A lack of capacity exacerbated the situation and led to bottlenecks. This meant that the purchasers had to carry out a wide variety of processes in SAP Ariba manually, whether it was creating a purchase request or transferring a quotation to a purchase request. There were no changes because "this was always how it used to be".
Heike found out about Lhotse from her colleague Moritz during her induction period at Funke. At the Procurement Summit 2019, he spontaneously met two of our co-founders, Henning Hatje and Can Akin, who showed him an initial version of the Lhotse app. After a demo, we started a pilot project together and integrated Lhotse into FUNKE's processes and systems.
The result?
1. Time savings of 76% [1]
2. Up to 3x more supplier offers
3. Final offers with up to 20% lower prices [2]
[1] Average value of all tenders.
[2] Compared with the average of all offers received.
As if that wasn't enough, further projects and features developed as a result of the increasingly intensive collaboration. Towards the end of 2023, the topic of AI came up for the first time. As is the case when working with a start-up, it didn't take too long for artificial intelligence to be implemented in Lhotse's solution and thus also in FUNKE's processes.
We were curious to see if there was anything that prevented FUNKE from entering into and maintaining a long-term partnership with Lhotse - after all, many large companies prefer to work with other corporations rather than start-ups.
For Heike, working with a start-up was actually a plus, as it was more flexible and had shorter implementation times compared to other larger companies. It also gave them access to an innovative product that solved problems that could not be solved with conventional procurement software at the time.
In addition, FUNKE was able to discuss and brainstorm ideas directly with the developers of the Lhotse app - something you rarely have the opportunity to do when the customer is just one of hundreds. For example, the Lhotse team traveled to Essen to host an in-person hackathon with FUNKE's team of operational buyers to discuss daily challenges and develop a feature to solve them.
The result is the new Lhotse Dash Button, more precisely a browser extension that guides the purchasing team through every area of Ariba, speeds up and simplifies the purchasing process many times over thanks to the artificial intelligence interface. Heike secretly told us that this is her new favorite feature in the entire Lhotse package.
What does the collaboration with Lhotse look like?
FUNKE launched a pilot project with Lhotse in March 2020. The Lhotse app and now also the browser extension have been integrated into the company's processes and have been in constant use ever since.
"The onboarding process with Lhotse was quick and easy, with no long lead times or complicated training. In addition, the ongoing collaboration with Lhotse's cooperative team has been very pleasant and easy throughout."
From a technical perspective, Heike was very impressed with Lhotse's user-friendly interface, which makes it easy for users who may only look at Ariba a few times a year to use the features without the need for training.
Heike said that working with Lhotse gave her team access to the start-up culture with creative problem solving and open communication.
Heike shared her top tips for new Lhotse customers - number one is "think outside the box"! Procurement is a very process-oriented industry, but just because something has been done the same way for a long time doesn't mean there aren't other, better options.
Second: "Rely on technology". Digitalization and innovation are driven by technology in procurement, so try out different tools and functions to automate and eliminate bottlenecks. Heike, for example, was initially critical of the use of artificial intelligence, as it was not discussed as much in any other department at FUNKE. However, the quickly recognizable added value changed her mind and so her third tip was: "Rethink your attitude towards the use of AI!".
However, Heike's most important piece of advice is this:
"Take a deep breath of the fantastic culture and team spirit of Lhotse!"
For Heike, working with the Lhotse team has brought about many positive changes in the purchasing department. A true partnership can only work if the values match.
Heike believes that expectations of shorter delivery and processing times will increase rapidly. People have become accustomed to the Amazon model and 24-hour deliveries in their personal lives, why shouldn't they expect the same in their professional lives?
Companies need to find a way to combine fast delivery, lower costs and good quality. That's why, Heike says, technology, AI and new tools will transform the procurement industry and bring innovation on a scale we haven't seen before.
In order to be able to tell a similar success story about your purchasing department soon, we would like to invite you to a short demo.
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