Procurement Scratching the Surface

Procurement

Procurement Approach

Most companies only scratch the surface of procurement efficiency. Those that dig deeper discover that the savings can be dramatic. External purchasing is the largest single expense category for most firms. World-class procurement organizations can reduce a company’s purchasing cost base by an average of 8%–12% and deliver additional annual savings of 2%–3%. Procurement’s role is evolving rapidly from a tactical team focused on cost reduction to a strategic entity driving enterprise-wide value. Enterprises worldwide are asking their procurement teams to play a larger and more strategic role in the overall corporate growth and deliver sustainable business results.

To meet these new expectations, procurement organizations must transform their legacy processes, practices and structures, and align them with the current needs of the enterprise.

CPI advises clients across their procurement platform and is adept at bringing to bear its category and transformation expertise to help them achieve their organizational, supply management, and process efficiency objectives.

Procurement Transformation

CPI adopts a holistic approach toward procurement transformation that focuses on building a high-performance procurement organization in the shortest period of time.

Like any transformation program, the real challenge is in the implementation. Organizations often follow the path of building detailed transformation road maps and implementation plans, many times using outside expertise, but fail to realize the benefits in the real world. We differentiate ourselves by supporting our clients throughout the transformation journey. In our engagements, we typically run a parallel track of strategic sourcing to help our clients deliver lasting financial results while they build internal capabilities.

THE AGE OF ANALYTICS: PROCURING IN A DATA-DRIVEN WORLD

Companies that invest in performance management outperform other companies in multiple financial measures – total shareholder return, return on equity, return on assets, and cash flow return on investment, and multiple productivity measures – sales per employee, income per employee and real growth in sales.