Case Study
Spend Analysis & Sourcing Opportunity Assessment
Global data and technology company supporting clients in the clinical trials space.
Client sought to achieve significant cost savings, supplier consolidation and improved procurement visibility due to multiple recent acquisitions. Client experienced the typical issues within the procurement function due to this growth. We collaborated with the client to develop and deploy a project plan that would deliver actionable results around achieving savings and improving spend visibility.
Client operates in 14 global locations, all with their own supplier group using 11 different ERPs. Each operating location had their own supplier groups, limited formal procurement processes and a high degree of maverick spend. This environment of disparate systems performing the same function made it particularly difficult to capture and analyze useable spend data. In addition, spend data at line item level was limited to non-existent. The challenges continued from an organizational perspective with resistance from the business stakeholders. These stakeholders have been very comfortable with their existing suppliers and felt that cost savings had already been achieved by them over the recent years. The team relied upon the executive team to navi- gate the road as it pertained to receiving the necessary project support to be successful.
Leveraging our efficient data analysis techniques, automation tools, category benchmarks and extensive sourcing expertise, our team produced the following results.
- Through raw data enrichment and analysis, we developed a new procurement taxonomy that is now made up of of 16 portfolio groups and 96 purchasing sub-categories allowing for improved transaction classification and reporting.
- Rationalization and categorization of over 200,000 invoice transactions across more than 2,200 global supplier producing a classification of 92% of the total spend.
- Detailed spend analysis resulted in the segmentation of addressable and source-able spend which provided the client a view of what spend can be influenced by them.
- Conducted a comprehensive category analysis and thorough sourcing assessment that identified 33 sourcing projects across three sourcing waves.
- Resulting in an average new savings identification ranging of 9.2% that can be realized via formal strategic sourcing methods.