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Mastering Procurement in 2024: A Quarter-by-Quarter Strategic Roadmap for Success

By Procurement No Comments

An effective procurement strategy is more than just a way to cut costs; it’s a crucial driver of value and innovation.

As we step into a new year, let’s explore a comprehensive, quarter-by-quarter strategic roadmap that procurement professionals can leverage to elevate their operations, align with organizational goals, and stay ahead in an ever-changing market.

 

Q1: January – March: Foundation and Planning

  1. Assessment and Goal Setting (January)
    • Perform a granular analysis of last year’s procurement data, focusing on spending patterns, supplier performance, and compliance issues.
    • Collaborate with key departments to understand their procurement needs and challenges.
    • Set Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) goals that may include cost savings, process efficiency, and supplier diversity.
  2. Strategy Development (February)
    • Develop strategies tailored to different categories of procurement, considering both direct and indirect spending.
    • Incorporate risk management strategies, focusing on supply chain resilience and adaptability.
    • Plan for the integration of advanced tools like SAP Ariba, focusing on how they can enhance procurement operations.
  3. Implementation Planning (March)
    • Create detailed project plans, identifying milestones and key deliverables.
    • Develop training programs and materials for the procurement team and other involved stakeholders.
    • Establish a communication plan to keep all stakeholders informed and engaged throughout the implementation process.

Q2: April – June: Implementation and Optimization

  1. Process Implementation (April)
    • Start with a pilot program to test new processes in a controlled environment.
    • Establish feedback mechanisms to gather insights and make necessary adjustments.
    • Ensure compliance with both internal policies and external regulatory requirements.
  2. Supplier Relationship Management (May)
    • Develop a supplier segmentation strategy to identify key suppliers and manage them accordingly.
    • Initiate regular business reviews with key suppliers to discuss performance, opportunities, and challenges.
    • Look for opportunities to consolidate suppliers and negotiate better terms or bulk discounts.
  3. Performance Tracking and Optimization (June)
    • Utilize dashboards and reporting tools within SAP Ariba for real-time monitoring.
    • Conduct quarterly reviews to assess progress against goals and make adjustments as needed.
    • Foster a culture of continuous improvement, encouraging team members to suggest and implement enhancements.

Q3: July – September: Expansion and Innovation

  1. Market Analysis and Expansion (July)
    • Conduct thorough research to identify emerging trends and new market opportunities.
    • Evaluate the potential risks and benefits of expanding into new markets or product categories.
    • Plan for the integration of new suppliers, ensuring they meet the organization’s quality and compliance standards.
  2. Innovation in Procurement (August)
    • Explore emerging technologies such as IoT, robotics, and AI, assessing their potential impact on procurement processes.
    • Encourage the team to participate in industry workshops and seminars to stay abreast of the latest trends.
    • Pilot innovative procurement practices on a small scale before wider implementation.
  3. Strategic Sourcing Initiatives (September)
    • Reassess sourcing strategies to ensure they align with current market conditions and business objectives.
    • Develop partnerships with suppliers to foster innovation and improve supply chain sustainability.
    • Implement category management to optimize the procurement of goods and services across different categories.

Q4: October – December: Review and Future Planning

  1. Performance Review (October)
    • Analyze key performance indicators in detail, comparing them against industry benchmarks and historical data.
    • Solicit feedback from internal customers and suppliers to gain a 360-degree view of procurement performance.
    • Identify key learnings and areas of improvement to inform future strategies.
  2. Budget Planning and Forecasting (November)
    • Collaborate with finance and other departments to align procurement budgeting with overall business objectives.
    • Use predictive analytics to forecast future spending trends and procurement needs.
    • Plan for contingencies, ensuring flexibility in the face of market changes or unexpected challenges.
  3. Setting Goals for the Next Year (December)
    • Develop goals that not only focus on cost savings but also on value creation, sustainability, and innovation.
    • Plan for technology upgrades or implementations in the coming year.
    • Align procurement goals with the broader strategic objectives of the organization.

Comprehensive Checklist of Action Items:

  • Perform detailed procurement data analysis.
  • Set SMART procurement goals.
  • Develop category-specific strategies.
  • Plan and implement advanced procurement tools.
  • Conduct pilot programs for new processes.
  • Establish strong supplier relationships and management strategies.
  • Utilize SAP Ariba™ for performance tracking.
  • Engage in continuous process optimization.
  • Conduct market analysis for expansion.
  • Pilot innovative procurement practices.
  • Implement strategic sourcing and category management.
  • Conduct detailed performance reviews.
  • Align procurement budgeting with business objectives.
  • Set goals for technology upgrades and innovation.
  • Foster a culture of continuous improvement and learning.

 

By following this detailed roadmap and checklist, procurement teams can ensure a strategic, efficient, and value-driven approach throughout the year, ultimately contributing to the overall success and growth of the organization.

digital transformation procurement Canada

Strategic Innovation in Canada

By Procurement No Comments

Navigating Digital Transformation in Procurement

In an era where technology profoundly shapes business landscapes, Canadian mid-market companies are not just participating in the digital revolution; they are leading it.

Particularly in the realm of procurement, digital transformation has become more than a trend—it’s a strategic imperative.

Thankfully, with initiatives like the Canadian Digital Adoption Program (CDAP), companies have robust support to embark on this transformative journey.

The Canadian Mid-Market: A Landscape Ripe for Digital Revolution

Canada’s mid-market sector is diverse and dynamic, with a common thread running through its fabric—the need for effective, streamlined procurement processes.

Embracing digital transformation in procurement means more than integrating new technologies; it’s about redefining procurement’s role in driving business value.

Harnessing Emerging Technologies

Canadian mid-market companies are increasingly adopting technologies such as cloud computing, AI, and analytics. These tools not only bring efficiency and cost reduction but also enhance decision-making.

For instance, SAP Ariba™ offers a comprehensive procurement network that simplifies operations and strengthens supplier relationships.

Data-Driven Procurement

Data is the cornerstone of modern procurement.

Canadian companies are tapping into the power of analytics and AI to glean insights into spending patterns and market trends, facilitating strategic sourcing and effective risk management.

Navigating Challenges with the Canadian Digital Adoption Program

The path to digital transformation is fraught with challenges, such as the initial investment and the need for skilled personnel. Here, the Canadian Digital Adoption Program (CDAP) plays a crucial role.

This initiative by the Canadian government aims to boost competitiveness among Canadian businesses by helping them adopt digital technologies.

CDAP: A Springboard for Digital Transformation

The CDAP provides grants and loans to help businesses adopt new technologies. It’s tailored to assist companies in implementing digital solutions and enhancing their online presence.

This support is invaluable for mid-market companies looking to modernize their procurement processes without the burden of overwhelming costs.

Tailoring Digital Solutions

Solutions like SAP Ariba™ offer scalable and customizable options to meet the diverse needs of mid-market companies. Whether it’s improving contract management or automating routine tasks, these solutions can be adapted to each company’s unique requirements.

Canadian Companies Leading Digital Adoption

Canadian mid-market companies are not just adopting digital transformation; they’re setting new standards in procurement efficiency and strategic sourcing. Success stories across the country demonstrate significant cost savings and operational improvements.

The Future of Procurement in Canada

The future of procurement is undeniably digital. With ongoing technological advancements and a growing emphasis on sustainability, Canadian mid-market companies are well-positioned to continue their leadership in this domain.

By leveraging digital transformation in procurement and utilizing resources like the Canadian Digital Adoption Program, these companies can unlock unprecedented levels of efficiency and innovation.

The future is here, and Canada’s mid-market companies are ready to seize it.

SAP Ariba for Private equity PREMIKATI

Enhancing Value Creation through Strategic Procurement

By Private Equity No Comments

Executive Summary

For private equity entities, the amplification of EBITDA is not merely a financial target—it’s a strategic imperative that commands a premium in the capital markets and enhances enterprise value.

Procurement, often an overlooked lever, presents a substantial opportunity for operational improvements that directly contribute to the EBITDA margin.

Spend Analysis: The Bedrock of Procurement Intelligence

An exhaustive analysis of procurement spend underpins the strategic blueprint for cost rationalization and value generation.

This analytical exercise furnishes an X-ray view into spending patterns, enabling the identification of inefficiencies and non-strategic expenditures, thereby setting the stage for a disciplined procurement strategy.

Optimization: Engineering a High-Performance Procurement Function

The reengineering of procurement processes is essential to achieving operational excellence.

Employing sophisticated digital solutions like SAP Ariba™, private equity firms can automate and optimize their procurement workflows, enhance supplier selection, and ensure policy compliance—fundamental to driving EBITDA improvement.

Strategic Sourcing: Capturing Value across the Investment Portfolio

Granular visibility into procurement data unlocks the potential for strategic sourcing initiatives that consolidate spend and harness the collective bargaining power of the portfolio.

This strategic consolidation is instrumental in driving down costs and standardizing quality, yielding significant savings.

Contract Management: Fortifying Against Risk

In the volatile landscape of private equity, mitigating risk is of paramount importance.

Advanced contract management systems act as a bulwark against contractual non-compliance and supplier risk, safeguarding the firm’s interests and reinforcing the foundation for a resilient EBITDA.

Supplier Stewardship: Curating a High-Caliber Vendor Ecosystem

Effective supplier management transcends transactional interactions, focusing on cultivating strategic partnerships that deliver both qualitative and quantitative benefits.

Utilizing sophisticated supplier management tools, firms can elevate supplier performance, ensuring alignment with the firm’s strategic objectives.

Cost Savings Realization: The EBITDA Multiplier

In procurement transformation, the realization of cost savings is a critical outcome.

Leveraging the robust analytics of SAP Ariba™ enables firms to quantify and communicate these savings, reinforcing procurement’s role as an EBITDA multiplier to internal and external stakeholders.

Procurement Managed Services: Augmenting Capabilities

For private equity firms that may lack specialized procurement infrastructure, engaging with expert procurement managed services like PREMIKATI offers a strategic advantage.

These outsourced capabilities enable firms to navigate procurement complexities efficiently, ensuring that they realize the intended value creation.

Value Creation: Procurement’s Broader Economic Impact

Procurement’s potential extends beyond mere cost containment to encompass broader economic value creation, such as driving innovation, promoting sustainability, and enhancing product and service quality—factors that contribute to a superior competitive position in the market.

SAP Ariba™: Enabling a Digital Procurement Transformation

SAP Ariba™ represents a technological vanguard in procurement innovation. Its integrated suite empowers PE firms with seamless, end-to-end procurement operations, delivering actionable insights that inform strategic decision-making and operational agility.

The PREMIKATI Proposition

With a storied legacy of Fortune 50 procurement expertise and a proven track record in deploying SAP Ariba™ solutions, PREMIKATI is strategically equipped to guide PE firms through the intricacies of procurement transformation, driving both savings and sustainable growth.

Conclusion: Procurement as a Catalyst for EBITDA Expansion

In the quest for EBITDA expansion, procurement stands out as a catalyst for change within private equity firms.

The strategic integration of SAP Ariba’s technology with PREMIKATI’s consulting acumen positions PE firms to rapidly realize a return on investment, setting a new benchmark in operational excellence and strategic procurement.

 

Procurement during fall and the holidays

Harnessing the Seasonal Shift: A Procurement Perspective on Fall and Holiday Dynamics

By Procurement No Comments

 

When the hues of autumn leaves signal a change in season, it’s more than a picturesque moment—it’s a cue for businesses to engage in a tactical ballet of procurement.

This isn’t just about buying extra supplies for the office holiday party. No, this time of year has profound effects on procurement, supply chain, and the overall rhyth of business.

Let’s dive into the seasonal nuances and discover how smart procurement strategies can transform these challenges into opportunities.

Forecasting the Holiday Hustle

Annually, the holiday period sees consumer spending skyrocket, with events like Black Friday and Cyber Monday marking high tides of consumerism.

Businesses must forecast this demand swell and ensure their supply chains can withstand the surge. Collaborating with suppliers, securing advantageous contracts, and employing sophisticated platforms such as SAP Ariba™ to manage the flux of supply and demand are critical measures.

Steering Through Supply Chain Turbulence

Autumn heralds not just a cascade of leaves but the climax of hurricane season, opening the act for winter’s disruptive performances.

Supply chain resilience in this period hinges on the availability of alternative suppliers, transparent communication, and instant visibility into inventories and shipments.

A dynamic, forward-thinking stance is essential, moving beyond reactivity into the realm of anticipatory strategy.

Capitalizing on Seasonal Supplier Promotions

Seasonal discounts and promotions are not exclusive to the retail domain; they’re a vein of gold for the astute procurement specialist.

Engaging with these timely offers can lead to improved rates and terms, slashing costs and sowing the seeds for future collaborative supplier partnerships.

The Art of Strategic Stockpiling

The holiday season often coincides with operational downtimes.

Wise stockpiling is imperative to circumvent potential standstills. Yet, this is a balancing act—overstocking is as much a faux pas as understocking. Here, procurement technologies offer the analytical acumen needed to maintain equilibrium.

Ethical Procurement: A Seasonal Reflection

The reflective nature of the holidays provides an opportune moment for businesses to reassess their procurement ethos, emphasizing sustainability and ethical sourcing.

Adopting such practices not only aligns with a growing consumer conscience but also contributes positively to the global ecosystem.

Post-Holiday Procurement Post-Mortem

As the holiday glitter settles, the imperative to evaluate and adapt becomes evident. Procurement professionals are tasked with dissecting the season’s performance to refine future strategies. This ethos of continuous enhancement, powered by the data analytics of tools like SAP Ariba™, positions companies to consistently outpace the competition.

In essence, the autumn and holiday seasons are punctuated with both trials and triumphs for procurement.

By remaining nimble, embracing innovative technologies, and nurturing solid supplier relationships, businesses can transcend seasonal challenges, paving the way for a flourishing start to the New Year.

CFOs and Indirect Spend

By Procurement No Comments

Transforming Procurement: The Strategic Role of CFOs in Managing Indirect Spend

In the dynamic landscape of procurement, the role of Chief Financial Officers (CFOs) and Chief Procurement Officers (CPOs) has evolved significantly, especially in the realm of indirect procurement.

At PREMIKATI, we understand the intricacies of this evolution and its impact on businesses. This article delves into the collaborative efforts needed between CFOs and CPOs to harness control over indirect spending and explores who should drive robust management in this area.

The Shift in Procurement Dynamics

Traditionally, procurement functions have focused on direct materials – those essential for producing goods or delivering services. However, with the acceleration of digital transformation, the focus has shifted towards a more strategic approach to procurement.

This is particularly true for indirect procurement, encompassing areas like travel, logistics, IT, and maintenance. These categories, often comprising a significant portion of revenue, demand an innovative approach to unlock their hidden value.

Navigating Indirect Spend

Indirect spend, unlike direct spend, deals with the broader costs of operating a business. It requires a unique approach, one that involves changing behaviors across an organization. For CFOs and CPOs, the challenge lies in balancing immediate cost reductions with the potential for greater long-term savings through strategic procurement.

Despite its importance, indirect spend often receives less attention in the procurement strategy. This oversight can result in missed opportunities for cost savings and efficiency gains. As companies continue to navigate the post-pandemic landscape, optimizing indirect spend has become more crucial than ever.

Strategic Actions for Enhanced Indirect Procurement

To bring indirect procurement into sharper focus, CFOs and CPOs might consider:

  1. Separating Indirect from Direct Spend: Distinct handling of indirect suppliers can lead to more targeted cost control strategies.
  2. Leadership Over Indirect Spending: Placing a dedicated head of indirect procurement under the CFO can facilitate better oversight and strategic planning.
  3. Enhanced Relationships with Stakeholders: Building strong connections with non-procurement stakeholders can lead to more effective contract management and supplier relationships.
  4. Defining the CFO’s Role in Cost Reduction: CFOs should oversee the monitoring of contracts and compliance, ensuring cost savings are effectively captured and utilized.
  5. Leveraging Technology for Greater Visibility and Efficiency: Implementing technology solutions can streamline indirect spend management, enhancing compliance and reducing unnecessary expenditures.

The Road Ahead

As companies emerge from challenging times, the transformation of indirect procurement presents a new frontier for cost savings and efficiency.

This transition, however, requires careful management and alignment of goals between CFOs and CPOs.

By applying strategic insights and leveraging technology, companies can turn indirect procurement into a valuable asset, contributing significantly to the bottom line.

procurement blueprint

Your Procurement Blueprint

By Procurement No Comments

Embarking on the Journey of Strategic Procurement: Crafting Your Blueprint for Success

 

In the grand scheme of business operations, procurement often takes a backseat in the limelight, yet it remains a cornerstone of a company’s strategic foundation. This pivotal process, if navigated with foresight and finesse, can propel a business to new heights of efficiency and financial prowess.

The question then arises: What does your Procurement Blueprint look like, and how does it integrate within the larger vision of your enterprise?

Understanding the Essence of a Procurement Blueprint

Procurement, when envisioned as a blueprint, suggests a strategic, systematic approach akin to an architect’s detailed plan for a building.

It’s a comprehensive design that details every beam and bolt of the procurement function — from process mapping to technology integration. This blueprint is the silent sentinel of your supply chain, ensuring every aspect is meticulously orchestrated and aligned with your business’s heartbeat.

The Architectural Parallel: Procurement and Building Design

Just as an architect meticulously plans each aspect of a building’s construction, a procurement blueprint outlines each stage of the procurement cycle with precision. We’re talking about a step-by-step guide, from supplier selection and contract negotiation to purchase order management and performance evaluation.

Each phase is pivotal, akin to the foundational layers of a high-rise. Take supplier selection — it’s not merely about who can give you the best price, but who aligns with your quality standards, ethical practices, and delivery schedules.

Contract negotiation is about crafting agreements that are flexible yet robust, ensuring they weather market fluctuations and unforeseen events. Purchase order management is the logistics ballet, where timing is everything, and performance evaluation is the retrospective analysis that sharpens your blueprint for future builds.

Incorporating Best Practices and Technology

A procurement blueprint is not static; it’s a living document that evolves with best practices and technological advancements. Leveraging technology, such as SAP Ariba™, is like choosing the right materials for construction — it can make or break the efficiency and resilience of your procurement operations.

SAP Ariba, for instance, streamlines procurement by providing end-to-end automated solutions, reducing manual errors, and saving time. It allows for better supplier management, contract compliance, and spend analysis, turning data into actionable insights. By integrating such technology, your blueprint is not just a plan; it’s a high-powered engine driving your procurement process.

Tailoring to Fit: The Customization of Your Blueprint

No two companies are the same, and neither should their procurement blueprints be. Your blueprint should be a tailored suit, fitting the contours of your company’s needs and strategy. It’s about understanding your company’s unique market position, internal processes, and long-term goals.

Customization means scrutinizing the supply chain to identify areas for cost savings, efficiency improvements, and risk mitigation. It’s also about aligning procurement objectives with overall business goals, whether that’s market expansion, sustainability, or innovation.

The Foundation: Building a Strong Procurement Framework

At its core, a procurement blueprint lays the groundwork for a robust procurement operation. It builds a strong foundation that supports the weight of supply chain optimization and delivers tangible value through cost savings and efficiency.

A well-structured blueprint not only guides current operations but also equips your company to adapt to changes in the market, technology, and regulatory environments. It’s a tool that helps manage risks and seize opportunities, ensuring procurement is an enabler of growth, not a bottleneck.

The Outcome: Value Creation and Strategic Advantage

The true worth of a procurement blueprint lies in the value it creates for the company. It’s not just about cutting costs; it’s about investing in relationships, quality, and innovation. It’s about strategic sourcing that aligns with company values and goals, creating a competitive advantage.

A robust procurement strategy can lead to improved supplier relationships, where partners are engaged in a collaborative, win-win relationship. It can streamline operations, reduce cycle times, and enhance the company’s ability to respond to market demands.

Your Blueprint, Your Legacy

Just as a building’s blueprint is critical to its structural integrity and functionality, so too is a procurement blueprint to a company’s operational and financial health. A well-crafted procurement blueprint is not just a reflection of your company’s current practices; it’s a roadmap to where you want to go and the legacy you wish to build.

As we delve into the intricacies of creating such a blueprint, we must ask ourselves: Are we merely laying bricks and mortar, or are we sculpting the future skyline of our business? The answer lies in the strength of your procurement blueprint — your strategic masterplan for procurement excellence.

Premikati SAP Ariba Gold Partner

Kickoff Time: What Procurement Pros Can Learn From Football Season

By Procurement No Comments

Summer is winding down, school is back in session, and a chill is in the air – that can only mean football season has arrived!

As both college and professional teams take the field this fall, there are valuable insights procurement professionals can gain from the gridiron.

Even if you aren’t a devoted football fan, the lessons from this beloved sport can help take your procurement game to the next level.

Build a Championship Team

A “dream team” procurement organization isn’t built overnight like a top football program. It takes a thoughtful draft strategy, constantly evaluating needs versus available talent. Creating depth and competence across the function requires mixing promising rookies with veteran players who know how to do the job.

Procurement managers must regularly assess gaps, recruit standout new team members, and develop rising stars.

Investing in training and development will strengthen the bench. And just as a football team strives for unity, a collaborative, tight-knit procurement group will outshine a disjointed roster.

Be Ready for Any Play

Broken plays and audibles are par for the course on the football field. Running backs have to quickly change direction to dodge tackles. Quarterbacks adjust on the fly and find new targets downfield. Procurement pros know things sometimes go differently than planned, too.

Supply chain disruptions, new regulations, mergers and acquisitions, emerging tech, and shifting stakeholder needs can force changes to supplier timelines, agreements, and processes. Like skilled players, procurement teams must think fast, pivot, and adapt to the dynamic environment.

Mastering the art of agility turns challenges into fresh opportunities.

Go Deep on Analysis

Coaches and players spend hours reviewing game film, analyzing strengths and weaknesses, tendencies, and patterns. This intensive prep work is vital in forming a winning strategy. Procurement should adopt the same laser focus when assessing suppliers and markets.

Detailed spend and risk analysis will spotlight sourcing priorities to tackle. Digging into customer feedback and usage metrics will pinpoint where demand is headed. And performance data will indicate which suppliers are all-star players versus underperformers.

Just like coaches mapping out plays, solid analytics position procurement to make the right moves.

Teamwork Scores Big Results

On the football field, it takes cohesion, communication, and coordination across the team to score. Hand-offs, blocks, fakes, catches, and more – every player fulfilling their role is critical to driving the ball down the field.

Procurement wins when there is alignment across the business, too. Including stakeholders early, maintaining open dialog, and earning buy-in helps procurement execute sourcing strategies smoothly.

Cross-functional collaboration also provides a more accurate view of organizational needs and the best path to meet them. Unified teamwork is a proven game-winning approach.

Foster a Championship Culture

The best college and professional football franchises have a winning tradition that sets a tone of excellence and continuous improvement. Players and coaches set high standards and do whatever it takes to achieve them.

Procurement groups can also establish cultural benchmarks, adopt best practices, and create an environment where team members feel valued and motivated to succeed. Whether it’s celebrating cost-saving wins, advancing skills through training, or giving back to the community, creating procurement team pride and unity will pay dividends.

Keep Eyes on the Prize

Of course, every football team is laser-focused on one ultimate objective – to win the league championship! Though the season is long, every practice, play, and decision aims to inch closer to the prize.

Similarly, procurement needs to keep the big-picture goals on the scoreboard. Is it cost mitigation, risk reduction, user satisfaction, or sustainable supply chains? Despite day-to-day tasks, maintaining perspective on desired outcomes and aligning strategies to get there will ensure procurement eyes the right prize.

So, as you follow football this season, notice lessons from the gridiron that could raise your procurement organization’s game.

With preparation, adaptability, analytics, teamwork, culture, and strategic vision, your procurement program will be positioned to score big wins all season long!

 

Need a procurement game plan? Talk to the team at Premikati!

procurement managed services for PE

The Undeniable Value of Procurement Managed Services for Portfolio Performance

By Private Equity No Comments

Operating partners always search for innovative strategies to optimize portfolio companies’ performance.

Procurement, an often-overlooked area, presents a remarkable opportunity for cost optimization and improved operational efficiency.

The key lies in procurement-managed services.

The Game-Changing Nature of Managed Services

Managed services bring a fresh, data-driven strategy to procurement, transforming this traditionally administrative function into a powerful value driver. Backed by cutting-edge analytics and deep industry expertise, these services rapidly become a game-changer in procurement.

The Power of Intelligent Buying and Smart Spending

By shifting to managed services, one can realize an immediate 8% to 12% reduction in purchase costs. This is enabled by sophisticated analytics and a network of experienced procurement professionals who provide comprehensive support.

The approach is all about intelligent buying and wise spending, delivering sustainable savings across all spending categories.

Leveraging Volume Aggregation and Expert Insight

Managed services offer the advantage of volume aggregation and expert insight.

By aggregating demands from multiple clients, they can negotiate better prices, particularly in low-spend areas. Moreover, their scale provides deep expertise and real-time market insights across various categories, allowing us to learn from industry leaders and enhance our capabilities.

The Significant Cost Savings of Strategic Procurement Activities

The potential cost savings from strategic procurement activities are significant.

Consider this: one company slashed its operating costs by 19% by outsourcing its entire purchasing function. Another firm captured average savings of almost a third in its first three significant categories tackled following establishing a new central purchasing function.

The Need for a Well-Informed Perspective in Transitioning

Yet, like any strategic decision, moving to procurement-managed services must be made with a well-informed perspective. While effective for transactional activities, labor arbitrage can limit savings in strategic buying activities that require close internal cooperation.

Capturing the benefits of demand and specification management, which can account for 40 to 50 percent of total savings, also requires close collaboration with other business functions, which can be challenging for an outsourced provider.

The Transformational Impact of Procurement Managed Services

Procurement-managed services represent a significant opportunity for operating partners.

Leveraging advanced analytics, expert knowledge, and industry best practices can transform the procurement function of your portfolio companies into a strategic asset.

As always, it’s essential to approach this with a clear understanding of your portfolio companies’ unique needs and capabilities to ensure a successful transition.

As an SAP Ariba™ Gold Partner, Premikati is a leading services provider for all facets of Ariba™ and procurement in general.  To contact our team, click here.

Contract Cubes for Private Equity

By Private Equity No Comments

Contract Cubes For Private Equity Firms

 

Contract Cubes Offer Powerful Advantages For Private Equity Firms

Successful private equity firms know that time is something you want to have on your side. When you’re looking at supplier contracts across multiple portfolio companies, then all of your procurement and contract management habits—whether time efficient or not—become greatly magnified.

PE firms that are able to compound on good contract management skills (and good software) have a massive competitive advantage over private equity firms that are still stuck in data siloes, spreadsheets, or, worse, completely analog procurement records.
SAP’s “contract cubes” are a game changer for data-centric PE firms because of their straightforward approach to accessing contract data near-instantaneously. Here are just a few of the powerful features of contract cubes that PEs can harness to supercharge the combined power of procurement across all of their portfolio companies: 

Use Keywords To Make Better Choices Spanning Your Entire Portfolio

Even disparate portfolio companies often have areas in which they can join forces to negotiate better deals with suppliers or, in some ideal scenarios, offer sourcing amongst themselves. It becomes exponentially easier to get discounts for quantity by combining orders or to find hidden gems amongst suppliers if your database of contracts is centralized and readily searchable. Find the things portcos are buying separately through a simple search and then turn that data into cost savings or even revenue generation while other firms are still flipping through file cabinets. 

Get All of The Numbers On The Table

Data transparency and visibility go a long way toward making better choices in both the short and long term. It’s impossible to capitalize on things that you don’t know are happening. With contract cube functions, you can get all of the numbers you need via simple commands. That can include time left until contract renewals, numbers of orders, financial ratios and other history and stats which can be transformed into even greater savings, revenue gen, and better supplier relationships.

The ability to know who your best-value suppliers are is priceless. Contract cubes can help you determine this based on your own metrics of value (and across a variety of metrics). Prioritize these suppliers during contract renewals, bring them additional business, set up data sharing, and make generally better choices that are data-led. 

Additionally, use data easily pulled via contract cubes to gain insight into long-term financial trends, even as portcos come and go, so you have a big-picture view that can lead big vision (and big money) moves while competitors are still taking a myopic and segregated approach to procurement, leaving you with a clear advantage. 

Handling procurement for a private equity firm is among the most difficult scenarios for even the most seasoned procurement expert who has been working with individual companies. That’s why we at Premikati offer BPO with managed services in procurement catering expressly to private equity firms. We understand how to navigate the complexities of cross-portfolio sourcing and we have the tools and expertise to fully manage this process to the great advantage of the firms who choose to outsource to us. Our specialized knowledge and toolsets bring value to the table that would go entirely unrealized by teams with less pointed expertise.

Reach out to us today to see how we can help you advance your procurement strategy.

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The Future of Work: Women in Procurement

By Procurement No Comments

The past 22-months have dramatically altered both how and where we work. And women have been disproportionately affected.

How will this change as we begin to emerge from the pandemic? How can we build a networked economy and create new opportunities for women?

Join Dawn Tiura, President & CEO of the Sourcing Industry Group, in conversation with Marisol Buczynski Buchanan, President & CEO of Premikati, and Elizabeth Lizotte-Brown, Sr Director for Channel Partnerships, The Mom Project, for a discussion on these topics and their perspectives.

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