CaseStudy: Tail spend savings for one of the top three social media companies.

6 December 2018

Industry Internet and Technology

Public/Private – Public

Annual Revenue $3B

Number of Business Units 35+

Problem

  • 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

  • Unable to track maverick spending in the organization

  • Too many suppliers in tail spend resulting in inability to contract lower rates for certain items

  • 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

  • Wanted to automate the visualization for the tail spend data and predict future spend in certain categories

Process

  • Mapped the flow of vendor spend from AP system and P-card spend  

  • Categorized P-card data with logical categories and collated it with the AP data, to automate for future data refreshes. 

  • Converted local currencies into USD for all divisions

  • 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,

  •  Identified opportunities based on aggregation and reducing maverick spending, with estimates of financial impact and ease of implementation for each

  • Dashboarding and visualization of key analytics findings

 

Key Findings/Savings

  • 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

  • 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

  • Suggested a total facilities management company in lieu of the multiple providers to optimize costs

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