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Next-level procurement

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

Many companies are now focused on how procurement can deliver further business value. While the definition of value may vary, (for example, speed to market or profit improvement through cost reduction), to deliver it procurement needs to be more effective and move to the next level.

Our recent experiences show that the combined power of insights, technology and expertise has the potential to make your teams twice as effective and enable them to deliver faster and better results.

Insights

To move procurement to a more effective state, access to category insights including category management best practices, benchmarks and market/supplier knowledge, sourcing and contract templates is crucial. This results in faster opportunity identification, greater prioritisation, the ability to run more swift and effective events, and time for strategic supplier management.

Reusing these inputs enables you to spend more time with the business, better understand its needs and speed up the execution process.

...the combined power of insights, technology and expertise has the potential to make your teams twice as effective and enable them to deliver faster and better results.

Technology

To make all this happen, data is key and we are still surprised how little procurement functions invest in analytics competency. Instead, companies fail repeatedly by expecting extraordinary outcomes from poorly purchased technology.

Few organisations have already embedded best-practice supplier management, sourcing, benchmarking, and category planning tools and technologies. Collecting all this data in a single platform means they never have to start from scratch and insights are immediately available for taking impactful actions. Moreover, automating the RFP analysis quickens the process and usually allows time for an additional round of clarification/negotiation meetings, which can bring a further 4% to 8% benefits, on average.

Expertise

While expectations from procurement are increasing, the talent gap in the world of procurement still exists, especially in some complex areas such as IT, raw materials, construction or logistics. Subject-matter experts are needed to maximise the value that suppliers can bring to the business.

Experts can enable faster and better decision-making by drawing on insights, driving senior executive discussions around business cases, and leading change and stakeholder management within the business with their in-depth knowledge. They often also play a key role engaging with suppliers collaboratively or competitively, such as leading agile proof of concepts informed by the supply market to rapid ‘negotiation factory’ events, reaching tangible outcomes within days.

Expert and analytical capability doesn’t necessarily need to be built in-house and can be accessed on demand by using consultants. This approach can often be more effective and reduce the overall total cost to the business.

Case example

One of our clients demonstrated speed of delivery by running more than 30 clarification/negotiation meetings in two days, achieving 20% savings and additional technical improvements. In just four months, these strategic contracts were signed and a supplier management tool put in place to ensure critical KPIs, commercial and productivity measures were being tracked to sustain the delivered benefits.

Even in mature procurement organisations, results are achievable:

Category

Industry

Benefits achieved – Examples

IT – application development

Global pharmaceutical

20%

Raw materials – chemicals

Global chemicals company

4%

Logistics

European packaging company

10%

Engineering services

Global manufacturer

17%

Construction

National rail network operator

16%

Auto claims

Global insurer

11%

Contact our expert

Jesper Schade Vice President

Contact our expert

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