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With global enterprises facing, perhaps, the strongest recessionary headwinds in a lifetime, Chief Procurement Officers (CPOs) and other procurement leaders will be forced to do even more with even less over the next 12 to 18 months. While desperate times may call for desperate measures, a majority of procurement departments need only take a "back-to-basics" approach to uncover huge reserves of potential savings. Consider: one quarter of all enterprises today do not have a formal spend analysis program; and of those that do, more than half fail to link the output of their spend analysis with their strategic sourcing efforts.
Five Compelling Facts from the Research, Providing Actionable Benefits for Readers: |
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Best-in-Class companies have placed, on average, 75% of their spend under management. |
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Best-in-Class companies have generated realized savings of 17% from their sourcing efforts. |
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Best-in-Class companies have achieved a 76% rate of compliance to compliance to negotiated contractual agreements. |
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Best-in-Class companies are 31% more likely to leverage spend analysis to identify sourcing opportunities. |
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Best-in-Class companies have a 20% lower rate of maverick/off-contract spend than all other organizations. |
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| The spend analysis function needs to be complemented with core technologies in order to effectively reap savings from sourcing efforts. An online dashboard to track metrics and standardized reporting capabilities, as well as a strong contract lifecycle management (CLM) system, are key aspects of a successful spend analysis program. |
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