A dedicated interim procurement support helped successfully handle the combined challenge of higher level attrition and internal strategic changes.
Strategic Sourcing in Travel Management
An Indian software product company significantly improved its cost efficiency and spend control on contingent workforce category.
Overview
The fast-growing startup company faced high costs and inefficiencies in managing its contingent workforce (CW) spend and quickly needed to bring it under control since it was looking to go public.
Challenges
- Lack of robust spend management processes due to a relatively new procurement function.
- Highly fragmented supply base.
- Lack of well-defined skills matrix and related rates.
- Very high unit rates compared to the benchmarks.
Solutions
Solutions We conducted a 6-month strategic sourcing project that helped resolve many of the challenges.
Various work streams included –
- Spend Mapping: Analysed spend across 3 key business units – Project Engineering, Professional Services, and Product Engineering, which helped identify inefficiencies and areas of improvement.
- Supply Market Assessment: Conducted a detailed market study to compare supplier rates against industry benchmarks. This revealed higher costs on several job roles, which opened up areas for cost savings.
- Sourcing Strategy: Launched a comprehensive RFP engaging both the incumbent and new suppliers. Also included specific skills & roles that were missing in previous processes. Validated RFP responses to ensure alignment with the company needs.
- Operational Integration: Working closely with the stakeholders to resolve any system bottlenecks, ensured full alignment with procurement goals. Key executives played a crucial role in driving stakeholder engagement and successfully integrating the new strategy.
- Supplier Performance Management: A robust Supplier management framework was introduced to ensure contract compliance, optimized use of resources, and stronger relationships with the suppliers, which improved the alignment with operational needs and supplier performance.
Results
Strategic sourcing initiative on contingent workforce category resulted in significant cost savings and operational efficiencies for the company.
Key outcome of this exercise included –
- Over $400K cost savings achieved in short 6 months time.
- Introduced skill sets inventory and detailed RFP requirements to improve supplier assessment.
- Strengthened oversight of the contingent workforce, resulting in improved quality and cost management.
- Contract compliance ensured enhanced cost management and long-term productivity.
A robust Strategic Sourcing program is essential for enhanced value creation in Contingent Workforce category.
Other Case Studies
Supplier Performance Management (SPM)
A robust Supplier Performance Management (SPM) program helped identify key long-term supplier partners and improved overall supply chain performance.
Sales & Operations Planning (S&OP)
Building a Sales & Operations Planning (S&OP) program grounds-up helped improve visibility into end-to-end process – from customer forecast to...
Content Design & Development
An end-to-end solution on training content design & development increased the effectiveness of L&D program and resulted in higher Return...