Partnering up with Lhotse: FUNKE’s Secret Procurement Weapon

by Julieta Varsano14.07.2022

FUNKE Mediengruppe has the motto “Passion for journalism” and this is exactly what they are famously known for. Founded in 1948, FUNKE has a long history of leading the way with its now 1,500 journalists and 4,500 media makers, all of whom are sharing the same dedication and zest for news, media, and creativity. Looking to optimise their procurement processes, FUNKE partnered up with Lhotse (and has never looked back!).

The story: Lhotse x FUNKE

We sat down with Moritz Vogt, Head of Digitalisation and Strategy in Procurement at FUNKE, to discuss the company's past, present, and future of procurement, and how partnering up with Lhotse helped them along the way.

Moritz is responsible for defining the procurement strategy and implementing innovative eProcurement technology for the whole FUNKE Group. His passion for working at FUNKE stems from being part of a media company, which is often at the forefront of many social and political issues. He also has the unique opportunity to build up a new and fresh digital landscape at FUNKE and to define and drive new procurement processes from scratch.

We wanted to find out what was the biggest challenge FUNKE was facing before starting to work with Lhotse.

Moritz shared a story we hear far too often: their procurement team was facing many obstacles, especially because of all the manual work buyers had to do. Capacity shortages only made the situation worse and led to bottlenecks. They didn’t use any automation at the time, which meant that buyers had to manually handle a lot of specific purchase requisitions without any clear process - this was simply a process step they had to do when using SAP and was accepted as “the norm”.

The ‘aha’ moment

Moritz first heard of Lhotse at the Procurement Summit in 2019 when he spontaneously met two of our co-founders, Henning Hatje and Can Akin, who showed him the first version of the Lhotse app. After a demo, we launched a pilot project together and integrated Lhotse into FUNKE’s processes and systems.

The results?

  1. Time savings of 76% [1]
  2. Up to 3x more supplier offers
  3. Final offers with up to 20% lower prices [2]

[1] Median of all submitted requisitions. [2] Compared to the median of all offers collected.

Working with Lhotse: start-up vs. enterprise

We were curious if anything was holding FUNKE back from starting a partnership with Lhotse - after all, many big enterprises prefer to work with other similar enterprises, not start-ups.

For Moritz, working with a start-up was actually an advantage, as it allowed them to be more flexible and have shorter implementation timelines, compared to other bigger companies. It also gave them access to an innovative product that was addressing issues that legacy procurement software could not solve at the time.

Moreover, it made it possible for FUNKE to discuss ideas and brainstorm directly with the creative people building the Lhotse app - something you rarely get to do when you are one client out of hundreds. For example, the Lhotse team traveled to Essen, Germany to have an in-person hackathon with FUNKE’s team of operative purchasers to discuss the challenges they were facing day-to-day, and to ideate and build a feature to solve those obstacles.

The result is the new Lhotse dash button (i.e. a browser plug-in for their procurement team that makes it even easier to create and fulfil requisitions), which Moritz mentioned to be his favourite feature of the app.

Lhotse app - supercharging procurement

So what does working with Lhotse look like?

FUNKE started a pilot with Lhotse in March 2020 and since then the app has been integrated in their internal processes and is successfully used on a daily basis today.

“The onboarding process with Lhotse was quick and easy, without the need for long lead times or complicated trainings.”

From a technical perspective, Moritz was quite impressed by Lhotse’s easy-to-use UI, which makes it simple even for regular business users (who are not procurement experts) to use the app, without the need for a training.

Moritz shared that working with Lhotse gave their team access to the start-up culture, with its creative problem-solving and open communication.

Top tips for new Lhotse customers

Moritz shared his top tips for new Lhotse customers - number one is “think outside the box”! Procurement is a very process-heavy industry, but just because something has been done the same way for a long time does not mean that there are no other better options out there.

Secondly, “rely on the technology”. Digitalisation and innovation are driven by technology in procurement, so explore different tools and functions to automate and remove bottlenecks. For example, Moritz was initially critical of automation, as he didn’t see a case that it could work at FUNKE. However, with Lhotse they managed to automate their whole requisition process for print materials. Instead of a person managing requisitions and manually looking for suppliers, now they have automated the whole workflow, thus freeing up their (already quite limited) capacity to focus on more complex projects.

However, Moritz’s biggest advice is to:

“Take a deep breath of the amazing Lhotse culture and team spirit!”

For Moritz, collaborating with the Lhotse team brought a lot of positive change in their procurement department. A true partnership can only work when your values align, which is why when you are on the same wavelength, working together can feel like a breeze.

What does the future look like for procurement?

Moritz believes that expectations of shorter delivery and lead times will rise rapidly. People are now used to the Amazon model and 24-hour deliveries in their personal lives, so why wouldn’t they expect the same at work? Companies need to find a way to combine fast delivery, lower costs, and good quality, but the old-school way to do so is no longer working. This is why, Moritz says, technology and new tools will disrupt the procurement industry, bringing up innovation of magnitude we haven’t witnessed before.

If you wish to find out more about how Lhotse can help you to improve your procurement processes, book a demo with us today!


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