Successful supplier selection and contract negotiation is not the end point for Procurement. Effective Implementation and Category Management throughout the life of the contract is crucial for ensuring the expected cost and value benefits are delivered and sustained.
Efficio has evidence that 50% or more of the expected benefits in the first year of a new contract are either lost, or never materialize at all, without a formalized implementation process in place.
Reasons for losses include:
- A lack of compliance on supplier and client sides
- Milestones and decision points forgotten as key personnel move 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
- Skillset and tools required for ongoing Implementation and Category Management in procurement lacking
How we work
We use our technology 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.
We build a detailed cross-functional Implementation Engagement Model which lays down timeframes, roles and responsibilities. We set up tools to track benefits, category and supplier management plans and KPIs. This gives you the right data and management information to define delivery targets and to be able to manage the contract against these.
Benefits of Category Management in Procurement
Formalizing your Implementation and Category Management in procurement will ensure that the benefits identified through Sourcing are realized, sustained and/or enhanced, and that ongoing supply risk is managed.