Procurement can play a key role in helping organizations reduce costs sustainably by improving efficiency, managing spend and supplier relationships, and identifying new opportunities for cost savings.
Cost savings of up to 20% of procurement spend can be achieved by increasing efficiency via automation, according to a report by Deloitte. By automating tasks such as purchase order creation, invoice processing, and supplier management, the time and resources required to manage these processes can be significantly reduced, resulting in cost savings. Additionally, automation can also improve accuracy and reduce errors, which can further reduce costs.
Building and maintaining strong supplier relationships can positively impact cost reduction by up to 12% of procurement spend, according to a study by the Hackett Group. By identifying areas of expenditure where costs are high and working closely with key suppliers, procurement can not only negotiate better deals but also leverage the supplier's expertise to identify new opportunities for cost savings.
Gartner has asserted that organizations using category management and spend analysis can achieve savings of up to 20% on procurement spend. Analyzing spend data helps identify areas where costs are high and reveals opportunities for cost savings. By grouping similar spend categories together, procurement can negotiate better deals with suppliers and identify new opportunities for cost savings.
Procurement can also support sustainability goals by identifying and selecting suppliers that share the same values, such as environmental and social responsibility. By choosing suppliers that are committed to sustainability, organizations can reduce their environmental impact and support the development of sustainable supply chains. This can not only help achieve cost savings but also contribute to the overall sustainability goals of the organization.
Strategic sourcing, the process of identifying and selecting suppliers that can provide the best value for the organization, can be used to further generate business impact. By identifying the most cost-effective and sustainable suppliers, organizations can reduce costs while also ensuring that their suppliers align with their sustainability goals.
In summary, procurement can play a key role in helping organizations sustainably reduce costs by improving efficiency, managing spend and supplier relationships, identifying new opportunities for cost savings, and supporting sustainability goals. Global product manufacturing companies are using FactWise S2P to transform their procurement organization via analytics, automation, and supplier diversity. Costs can be reduced by up to 20% by leveraging Source-to-Pay platforms like FactWise that enable end-to-end automation, spend analysis, category management, supplier relationship management, and strategic sourcing.