The Efficio growth story
Procurement experts Efficio has been recognized as one of the fastest-growing companies in Europe in a special report published by the Financial Times.
FT 1000 lists the 1,000 companies in Europe that have achieved the highest percentage growth in revenues between 2012 and 2015. Efficio achieved revenue growth of 86% in the three-year period to 2015, with total sales of £32.5 million and international sales of £16 million.
Jens Pedersen, CEO of Efficio, puts the company’s achievements down to an attractive value proposition for clients seeking to transform their procurement function. “Market conditions have put procurement firmly at the top of the agenda for business. As the global economy becomes more competitive and companies increasingly rely on outsourcing to a network of suppliers, so the importance of optimizing procurement has increased. With procurement now making up between 50-70% of revenues in most organizations, managing costs in this area can have a substantial impact on the bottom line.
The value proposition for our clients is clear,” Jens says. “We help transform procurement functions, improving internal processes and upskilling in-house teams to deliver large savings and sustainable results over the longer term.
Other factors that have spurred Efficio’s growth include changes to the profile of the company’s client base. “Mid-sized organizations globally and across a range of industries – from financial services, manufacturing and utilities, to service companies including the public sector – have started approaching consultancies for help, which never used to be the case,” explains Jens. “Now they will engage procurement consultants and get a return of many times their investment. We, in turn, only get paid based on their results.”
Private equity companies are also using procurement expertise as a significant value lever for their portfolios. “For a large private equity investor, streamlining procurement processes across a wide portfolio of companies is an efficient way of creating significant cost savings,” says Jens. “We have worked with many major private equity houses, identifying savings during an opportunity assessment, sometimes even before a deal has closed, and building programs to deliver sustainable savings focused on each individual portfolio company by leveraging a common strategic sourcing process and knowledge across the full portfolio.”
The value proposition for our clients is clear. We help transform procurement functions, improving internal processes and upskilling in-house teams to deliver large savings and sustainable results over the longer term.
Focus on results rather than advice
What makes the Efficio business model unusual in the consultancy market is its focus on results rather than just advice, a fee structure linked to results, and services ranging from transformation to ongoing managed services.
To deliver a return on investment, Efficio sets very clear objectives at the start of each engagement and focuses on delivering measurable and sustainable results. It has developed eFlow, a technology platform built by the company’s procurement experts to streamline and support procurement processes, leverage Efficio’s expert knowledge, and measure and track results.
“We train clients to use the technology and interpret the data generated,” explains Jens. “This approach allows us to deliver value to clients more quickly and the results are sustainable over the longer term. It’s our combined offering of services, technology and expertise that is unique and compelling for clients.”
Efficio is evolving with its market. The company has expanded its regional hubs in Germany and the US, and has sales offices in France, Italy, the Middle East, Nordics and Switzerland. “Our core offering is changing,” says Jens. Over the past five years we have seen a move towards longer-term client relationships with our managed services offering. Our revenue model is now 50% managed services, supported by technology and expert knowledge. We expect this to become the majority of our revenues as more and more clients seek support over a longer period of time.”
We are now 17 years old and probably one of the largest procurement consultancies globally, but the company still feels like a start-up.
The outstanding results Efficio posted in the years 2012 to 2015 positioned it as one of the fastest-growing companies in Europe, according to FT 1000, but the company’s growth trajectory has not stopped there.
Efficio has recently been appointed to a public sector framework, which will allow it to provide procurement consultancy and advisory services to public sector bodies for the next two years, opening up another significant business line. The expansion of the office network, coupled with the continued development of eFlow, Efficio’s integrated technology application, and the global appetite for streamlined procurement, is expected to drive further future growth.
“We are now 17 years old and probably one of the largest procurement consultancies globally, but the company still feels like a start-up,” says Jens. “We work together as one global team made up of consultants representing more than 40 nationalities. We attract very bright people who are passionate about delivering large improvement projects for our clients globally – ultimately, this is what drives our success. The FT 1000 is a welcome endorsement of our success to date, but we anticipate that the best is yet to come for Efficio.”