Our site uses cookies

I agree Our site saves small pieces of text information, called “cookies” on your device. Find out more in our cookie policy. You can disable the usage of cookies by changing the settings of your browser. By continuing to browse the site you are agreeing to our use of cookies.

Four ways to maximise your procurement savings

Words: Alex Klein
Maximising realised savings is all about diligent execution, good measurement, and cross-functional alignment.

Your Procurement function’s reputation and credibility can live or die based on the validity of your proclaimed savings, so it’s paramount that you get it right.

Good procurement, and nailing down those savings before they blow away, is about what happens after the deal is signed. Remember the old adage about leading the horse to water? Processes need to change and finance staff need to be on the ball.

Good procurement, and nailing down those savings before they blow away, is about what happens after the deal is signed.

Follow these four recommendations to optimise the chance of your savings forecast matching what is found in the P&L at the end of the year.

  1. Get your savings calculation/business case right, by making sure it is based on granular volume and pricing data, and makes reasonable assumptions.
  2. Ensure the supplier contract gets implemented properly, and that all divisions/business units are aware of the new contract and how to buy from it.
  3. Make sure someone is accountable for measuring and managing vendor, item and price compliance – without this, you will fail. Engage Finance early, and ideally have them take the savings out of budgets up front.
  4. Be sure to measure both budget savings and operational savings – stripping out any extraneous factors such as business-driven volume or mix changes.

The key to getting it right is being proactive. If you wait until your CFO asks, “Where are those savings you promised me?”, then it will likely already be too late.

Contact our expert

How Efficio helped refocus MEC3’s procurement
Case study
How Efficio helped refocus MEC3’s procurement

Efficio was tasked with helping MEC3 refocus their procurement strategy, a partnership that proved a great success.

Next-level procurement
Insight
Next-level procurement

A Masterclass in harnessing the power of insights, technology and expertise.

How to increase value through procurement
Opinion
How to increase value through procurement

For a savings plan to work effectively, there are five points to consider.

Digital procurement: an overview of geographical differences
Insight
Digital procurement: an overview of geographical differences

Where procurement functions are now, and where they are heading, particularly in terms of digital transformation, how businesses are using technology to enhance their processes, and the barriers to technology delivering the expected benefits.