Simple spend analysis relieves supplier management complexities for a leading University
Our client, a leading regional provider of higher education, struggled with a complex web of facilities management suppliers and an inconsistent organisation-wide contract management approach. These inconsistencies filtered through to procurement and contract documentation, further exacerbating difficulties in supplier management.
With increased cost pressures across the organisation, there was a desire for our client to find savings through a review of existing supplier contracts, potentially by way of aggregation to whole of university contracts. However, given the lack of visibility into the existing supply base, there was little they could do to assess current spend against potential future savings. Our client knew they had a problem, but with limited internal capacity to turn things around, the situation remained stagnant.
Grosvenor’s Spend Analysis Tool (‘SPAT’) was a perfect fit for this kind of issue. By aggregating all supplier spend and separating this across categories and campuses, we were able to ascertain a starting point for determining where the greatest savings could be made. This analysis not only focused on the dollar figures associated with spend, but the ‘who?’,
‘what?’ and ‘why?’ of the spend. We were able to take data which had previously been of very little value to our client and turn it into a dashboard with clearly identifiable insights.
Category experts working for our client were identified and interviewed in order to validate these findings. This included the areas of spend, the most important suppliers and the biggest saving opportunities for each category, with questions to contract managers designed to identify strategies around the Four Spend Levers of Pay Less, Buy Less, Buy Cheaper and Buy Smarter. To round out our stakeholder engagement, the suppliers themselves were also contacted to provide input.
Armed with both spend data and information gathered from stakeholders, we were able produce an opportunity score. Combined with difficulty of implementation, a clear roadmap of which categories to prioritise was developed as shown below:
Once we had identified the size and achievability of the opportunities available to our client, it was important for us to validate and quantify the benefits associated with these. Much of this was garnered from Grosvenor’s deep internal subject mater expertise in the Property industry, which allowed us to understand and explain the practical implications of pursuing strategies within certain categories over others.
In the formulation and presentation of our business case, we were able on take our client on a journey of their own category spend with insights generated almost entirely from their own data and expertise. With the exception of utilities, we were able to allocate procurement initiatives to Pay Less, Buy Cheaper, Buy Less and Buy Smarter in all categories. Our ability to translate what was a jumble of contracts and spend figures into valuable and actionable insights led the client to further engage us to implement the recommendations and drive the savings promised in the business case.