Sustaining procurement's impact on EBITDA

Words: Patrick Traynor Fabian Bodoky

The stakes for sustaining performance in procurement are high.

While private equity recognises the impact that transforming procurement can have on portfolio company performance and value, the focus is typically on short-term transformation instead of sustaining the performance in procurement.

However, high-performing organisations are realising a 3-5 percent productivity impact year after year from effective procurement, compared with 0-2 percent for average performers. Maximising this long-term impact should therefore be a priority right from the beginning of the transformation to have the value flow through to EBITDA and valuation when exiting. 

In this article published by Private Equity International, Patrick Traynor, Vice President and Fabian Bodoky, Principal at Efficio, reveal four common characteristics that organisations sustaining high year-over-year impact from procurement share, and how to achieve them.

To download the full issue of PEI's Operational Excellence Special 2020 magazine, click here.