CaseStudy: Tail spend savings for one of the top three social media companies.
Industry – Internet and Technology
Public/Private – Public
Annual Revenue –$3B
Number of Business Units – 35+
Problem
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Procurement organization was not able to break away from routine tasks and conduct analytics on tail spend data to ensure compliance and identify savings opportunities
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Unable to track maverick spending in the organization
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Too many suppliers in tail spend resulting in inability to contract lower rates for certain items
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P-card and Accounts payable data were not mapped to each other and therefore could not be collated into a single database resulting in missed savings opportunities
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Wanted to automate the visualization for the tail spend data and predict future spend in certain categories
Process
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Mapped the flow of vendor spend from AP system and P-card spend
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Categorized P-card data with logical categories and collated it with the AP data, to automate for future data refreshes.
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Converted local currencies into USD for all divisions
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Analyzed data for better visibility and understanding. For example, spend by division, category spend by division, top suppliers by spend and region, number of suppliers per category, etc. transaction date,
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Identified opportunities based on aggregation and reducing maverick spending, with estimates of financial impact and ease of implementation for each
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Dashboarding and visualization of key analytics findings
Key Findings/Savings
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Identified opportunity of savings in hardware & IT consumables purchases from companies like Apple, Dell etc. worth $3m when consolidating AP spend with P-card spend
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Identified opportunity in aggregating market research sub category which had a total of 90 suppliers but only 25% of the suppliers accounted for 91% of the spend
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Suggested a total facilities management company in lieu of the multiple providers to optimize costs