Measuring implemented savings to foster better collaboration between procurement and finance
Generating cost reductions is a fundamental goal of any procurement function, and ‘realized savings’ are usually a key KPI. Yet in many organizations there seems to be a perennial mismatch between what is promised by the CPO at the start of the year, and what is found in the P&L at the end of the year.
Why does this mismatch exist? Were the CPO’s projections unrealistic? Did the savings simply not happen, despite being reported? Or did they happen, but can’t be pinpointed in the P&L?
Just as developing good market knowledge and insights from current spend trends helps to build credibility with business stakeholders, confidently reporting realized (or implemented) savings is increasingly important as procurement organizations look to gain credibility with their finance stakeholders.
Our experience shows that where procurement teams disengage with the business immediately following the sourcing phase or are not privy to the implementation phase, savings realization drops to a mere 50% of the originally identified savings, annihilating the hard work done upstream.
This interactive workshop will cover why the mismatch between savings promised by the CPO at the start of the year, and savings that hit the bottom line at the end of the year, exists, and offers practical tips and advice for how to close the gap between reported and realized savings.
Areas of focus for the workshop will include:
- What are the causes of the disconnect between reported savings and realized savings?
- What are procurement organizations doing to fix it?
- How are savings being measured?
The workshops will take place from 09:00am to 11:00am at the Convene, 730 Third Avenue, New York, (breakfast will be served from 08.30). We have limited spaces available and spaces will be allocated on a first come first served basis.