Purchasing from a client perspective

Procurement Systems designed by ERP geeks are missing the point. So are those designed by Procurement people.
White paper
08/20/2017

The ‘Tail’ spend is found to be more and more on CPOs’ agenda. For example, a FTSE 100 who had decided to address its 10% bottom spend (about $ 1bn) realised that it made up 85% of its suppliers (in excess of 20,000!) once the Supply Base had been cleansed (inactive and duplicates removed): an opportunity for sizeable potential savings and supply risks mitigation through further consolidation of the Supply Base.
What we have found when helping our clients is that their Tail is made of 3 clusters: a few truly ‘one-offs’, a number of suppliers falling in the ‘too hard’ box (typically Financial or Professional services), and a majority of cases where, in all likelihood, approved suppliers might well have been able to deliver – essentially of course, all falling in Indirect Spend categories.
The latter, most significant proportion of the Tail, represents two missed opportunities: further leveraging of spend and a redefinition of the scope of contracts to better suit the internal clients’ requirements.