Financial Services Industry Overview
Despite all the news about profits, banks and other financial services companies are failing to meet shareholder’s expectations for investment on return on equity. Part of the reason for this is the ineffective spend analysis process. Organizations with the effective spend analysis process reap benefits in the areas of cost-effectiveness and process efficiency; whereas, others struggle to identify cost-saving opportunities. This case study is a classic example of how we helped a financial services company to improve the spend analysis process and focus on savings.
Business Challenges Faced
The client is a leading multinational financial services company with operations spread across the globe. Their central procurement team wanted to have a better view of spend and an assessment of savings potential in order to prioritize work and focus on savings. However, limited visibility into detailed spend information, different data sets, and business unit delineations were making it difficult for the central procurement team to perform a comprehensive spend analysis. The team, therefore, engaged with SpendEdge to improve their spend analysis process and gain a rough estimation of cost savings including internal benchmarks between their offices.
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Our Research Approach
The experts at SpendEdge performed a comprehensive spend analysis to develop initial estimates of cost savings. They also identified different sources, including accounts payable, general ledger, and pCard for spend data, and consolidated the data into one central database. This helped the client to standardize the spend and link stakeholders for better supplier management. The team then analyzed spend data and ensured that the client negotiated the best contract deals per supplier.
The solution offered further improved spend analysis process and helped the client to evaluate contracts for savings opportunities, identify the optimal number of suppliers for a specific service, and implement spend governance with the holistic view.
The robust spend analysis process helped the client to focus on a few data sets that were falling within the scope of procurement. This helped the client to develop a roadmap for future procurement initiatives and identify potential actions in terms of procurement projects. The new projects taken helped the client realize the savings of $30 million.
Implementing a spend analysis procurement strategy is crucial for companies to realize savings. Subscribe now to access SpendEdge’s web-based procurement platform to identify cost savings opportunities.
Benefits of the Spend Analysis Process
- Provides a clear understanding of where the organization is spending money.
- Helps companies to identify opportunities for savings/cost reduction.
- Improves the ability to forecast future spending and expenditure budgets.
- Helps understand spend with diversity vendors and uncover opportunities to engage more with diverse vendors.