CASE STUDY

Cost Modeling Helps a Leading Conglomerate with Better Negotiation of IT Temporary Staffing Services

Jun 13, 2017

Category Overview

Temporary or contractual labor refers to a provisional group of workers who work for organizations for short duration on a contractual basis. To meet temporary requirements, such employees can be easily recruited with the help of sophisticated online and mobile platforms.

The Procurement Pain Point

One of the leading conglomerates in Europe was facing challenges with understanding cost structure of leading IT temporary staffing service providers. Key pain points included gaining visibility on supplier cost structure, key cost drivers, and cost saving aspects of procurement. Despite being one of the top players in the industry, the client lacked the expertise and tools to provide the sourcing team with deep insights into price negotiation. With our precise research methodologies and extensive experience in should-cost analysis, we helped the client gain a clear understanding of the cost drivers, along with valuable information on ways to facilitate judicious price negotiations.

Procurement Insights Offered and the Outcome

With our vast database of secondary research resources, highly experienced analysts, and critical inputs from industry experts, we helped the client identify cost drivers and potential cost saving opportunities. We followed an extensive three-step research process encompassing establishment of cost elements mentioned in the annual reports provided by the listed supplier. This was further followed by refined secondary research to understand the percentage break for each specific cost element within the overall cost structure. We also validated the cost model by conducting primary research with industry experts.

Business Impact

This procurement market intelligence study was to offer the client a comprehensive overview of the cost model and key cost drivers such as increase in payroll taxes and complexity of services and reduced dependence on physical offices for service delivery. Furthermore, this study helped the client with procurement best practices, strategic selection of suppliers, cost-saving and cost reduction, and insights that led to optimization of the category spend.

This procurement intelligence study offered the client category assessment, supplier market landscape analysis, and procurement best practices.

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