Cost Management – particularly post-COVID – has risen to a much more prominent focus for most organizations across industry segments. Most recently, Deloitte published survey results indicating that 66% of Chief Procurement Officers (CPOs) have identified cost management as their top priority, a nearly 2x increase compared to pre-COVID survey findings.
These findings aren’t at all surprising, as it is difficult not to see cost management referenced in a quarterly report or mentioned prominently on an investor call.
The good news is that most organizations can reduce costs associated with Vendor Spending by 15% or more, often in less than a year — as I’ve described before (here, here, and here).
We believe this is a once-in-a-decade opportunity for CPOs to further demonstrate their value to the enterprise and to cement their seat at the ‘c-suite table’ – given that these cost reductions are often ‘market-moving’ – with 15% Vendor Spend reduction is equivalent to 20%+ EBITDA increase for services firms and 50%-100% EBITDA increase for firms in the industrial and manufacturing sectors.