Successful supplier selection and contract negotiation is not the endpoint for Procurement. Effective Implementation and Category Management throughout the contract lifetime is crucial to ensure the expected cost and value benefits are delivered and sustained.
Our first-hand evidence shows that over 50% of the expected benefits in the first year of a new contract are either lost or never materialize unless a formalized implementation process is in place.
The reasons for rapidly diminishing benefits from a new contract include:
- A lack of compliance on the supplier and client sides.
- Milestones and decision points were forgotten as key personnel moved on.
- Short-term deviations from contract becoming permanent features.
- Missed opportunities to adjust contract performance in light of new situations.
- Limited resources focusing on new negotiations rather than maintaining existing contracts.
- Inability to access the skillset and tools required for ongoing implementation and category management.
How we work
We use our digital procurement platform, eFlow, to create a data-driven Category Management approach. Our team determines the data required to manage a category on an ongoing basis and sets up a process to ensure this data is collected, collated, and made available to you.
We build a detailed cross-functional Implementation Engagement Model that lays down timeframes, roles, and responsibilities. We set up tools to track benefits, supplier, and category management plans and KPIs. This gives you accurate data and management information to define delivery targets and manage the contract against these.
Benefits of Category Management in Procurement
Formalizing your Implementation and Category Management ensures that the benefits identified through your category sourcing strategy are realized and sustained over the long term while effectively managing any ongoing supply risk.