Today’s business leaders face extreme pressure to grow the top-line and margins simultaneously. In this economic environment, where top-line growth is not likely to come from simple volume growth or price increases, companies must invest in penetrating new markets and creating new products. However, the rise in commodity prices is putting even more pressure on margins and siphoning away potential investment dollars. As a result, many leaders must fund these critical investments through internal cost reduction measures.
A hidden area of savings opportunity
In the drive for cost reductions, management to date has aggressively attacked the list of traditional cost-cutting strategies – plant closings, employee layoffs, benefit reductions, brand rationalization, and so on. Many leaders would say they have exhausted the possibilities for significant savings and are concerned that more cost reductions in these areas would jeopardize long-term business success.
What many executives don’t know is that a hidden opportunity for savings remains. By aggressively managing indirect and other under-resourced goods and services expenditures (i.e. marketing, travel, IT, etc.), companies can realize up to a margin point or more of savings. Such expenditures are significant, consuming up to 30% of revenues for many companies.
However, due to the complex nature of these goods and services – made up of hundreds of subcategories each with unique supply markets – and the fragmented way in which they are purchased, most companies have not been able to optimize this spend and are leaving significant savings on the table.
Through partnering with a Comprehensive Procurement Solution Provider, like Procurian®, you can drive significant realized savings to your bottom line on an accelerated basis, enabling you to fund the market expansion and product innovation you need to grow.
Procurian has spent more than ten years building and constantly advancing our proprietary Specialized Procurement Infrastructure™ so you don't need to invest capital and time on optimizing indirect spend areas. Our Specialized Procurement Infrastructure infuses teams of dedicated category experts, real-time market intelligence and proprietary technology into a comprehensive spend management process. By leveraging this infrastructure, you can drive significant realized savings on an accelerated basis - savings that are difficult to achieve with internal efforts alone.
*Figures based on Procurian benchmarks