Procurement plays a critical role in mergers and acquisitions (M&A), as it helps organizations to identify, acquire, and manage the resources needed to successfully integrate two or more companies. By effectively managing the acquisition of goods and services, organizations can reduce costs, improve supplier performance, and ensure compliance with laws and regulations during the M&A process.
According to a survey by KPMG, companies that have a strong procurement function are 3x more likely to be successful in M&A than those without. Additionally, a study by Deloitte found that companies that prioritize procurement in M&A can achieve a 15% reduction in costs.
Examples of companies that have effectively leveraged procurement in M&A include GE and Amazon. The company has a dedicated procurement team that works to identify and acquire the resources needed during the M&A process. Through this process, the companies have been able to successfully integrate several companies and achieve significant cost savings.
In addition to reducing costs, procurement can also play a role in improving supplier relationships and increasing innovation during the M&A process. A case study by Accenture found that a large consumer goods company was able to improve supplier relationships and increase innovation by implementing a centralized procurement function during the M&A process.
Overall, it's clear that procurement plays a significant role in M&A for companies of all sizes and industries. By implementing strategic sourcing initiatives and leveraging the power of scale, organizations can reduce costs, improve supplier performance, and ensure compliance with laws and regulations during the M&A process. Additionally, with an effective procurement function, organizations can successfully integrate different companies and achieve cost savings as well as drive innovation.
FactWise is an end-to-end procurement platform focused on generating savings (up to 25%) via analytics and increasing efficiency (up to 29%) via automation. Our Source-to-Pay solution offers transparency and holistic insights to leaders, enables teams to negotiate and maintain oversight across multiple subsidiaries, and allows for customizable RfX approval flows goods receival and quality check workflows across various entities within an enterprise. Our singular mission at FactWise is to build truly distinctive procurement solutions that delight users and generate sustainable positive impact for the organizations we serve.