Business Challenge: Issues arising due to de-centralized procurement
One of our leading clients belonging to the IT sector understood that their different business units across regions were performing independent sourcing and procurement activities, and this can be controlled in order to achieve improved savings.
Situation: The client wanted to identify ways of consolidating spend across departments and regions
The client was lacking clarity on the overall spend levels, as the different departments were performing independent sourcing and procurement activities. The client wanted to identify ways of saving costs and improving the overall process, through consolidation.
Approach: Identified potential consolidation opportunities and developed recommendations on best practices
We conducted a detailed assessment of the existing spend areas at an individual business unit/region level. Once we developed an understanding of the spend levels, we did an evaluation of the supplier base. This helped us in identification of common suppliers across business units, and assess the potential consolidation and cost saving opportunities. We also did an assessment on best practices followed in contracting/licensing and negotiation with the suppliers, and developed recommendation to the client based on it.
Impact: Client was able to achieve over USD 10 million in savings through spend consolidation and implementation of our recommendations
The client was able to consolidate spend across business units and regions. They were able to identify and eliminate duplications in purchase resulting in significant savings. The client also was able to implement industry best practices based on our recommendations.