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Procurement BPS

Unleash breakthrough value from spend

March 1, 2021

RESEARCH REPORT

In brief

  • 90% of chief procurement officers say that their organizations are under extreme pressure to extend innovation.
  • Closed Loop Spend Management (CLSM) accelerates innovation and sustains breakthrough value, while answering the call for more responsible business.
  • CLSM helps drive end-to-end transformation across indirect and direct cost categories.
  • This approach enables procurement to drive topline growth while getting the basics right: reducing risk and supporting business growth.

The future of procurement is waiting. Getting there takes change

It used to be clear cut. Procurement organizations were expected to deliver cost savings in sourcing and purchasing. But today their scope of responsibility has expanded well beyond this. 90% of chief procurement officers say that their organizations are under extreme pressure to extend innovation. This statistic would have been unheard of a decade ago.

More than 66% of procurement organizations struggle with lack of long-term investments to transform processes and technology.

But it is difficult to get there without the right operating model that provides access to right data, insights, technology and talent. The data that supports real-time decision making is often trapped in pockets across the business. It can be hard to know what technology tools to invest in and when. And funding shortages hinder the promise of transformation.

From managing spend to unleashing value

Procurement can fully embrace the promise of transformation and become truly data driven with closed loop spend management (CLSM).

With closed loop spend management, you can identify excess spend across the enterprise and reinvest it to power innovation and responsible growth.

CLSM is a new, data-driven operating model for managing the source-to-pay lifecycle that targets indirect and direct costs for meaningful and sustained transformation. Powered by digital, data and AI, CLSM systemizes and infuses bold ways of working across the procurement function. It makes Procurement more efficient, resilient and agile. And the method is grounded in responsibility to the environment and suppliers—always aligned with the business strategy.

The sustainable savings that companies can realize with CLSM speak for themselves.

10-15%

Sourcing reduction across direct and indirect spend

3-5%

COGS reduction

>15%

More than 15% SG&A reduction

20-25%

Reduction in operating costs

Broader scope. Bolder moves. Breakthrough outcomes.

There are clear benefits that come from CLSM model in procurement. Think of it like a ripple effect of change running from reducing costs to driving topline growth.

Deliver sustainable cost savings

Go beyond cost savings to reducing consumption, optimize inventory and identify new opportunities to reinvest these savings across the business.

Harness real-time data insight

Provides insights that help make better business decisions to outmaneuver uncertainty when it comes to pricing, consumption, and inventory levels.

Be a responsible business

Threads sustainability into procurement activities—designing for circularity, building trust and supporting net-zero operations.

Support enduring growth

Elevate outcomes with new insights and tools that advance ways of working for retained work.

Anticipate what’s next

Pace of business—in everything from how markets move to how consumers behave—is too fast for competitive companies to be anything less than nimble.

How to get from here to there

The journey to CLSM is different for every procurement organization. That’s why there’s a highly flexible approach that moves along three critical phases.

Take a hard look at the procurement organization to identify and prioritize changes. Evaluate spend, operating model and sustainability metrics against price, specifications, consumption and operational benchmarks. Target quick wins and follow fast with transformation “sprints” to get leadership buy-in and investment for more substantive transformation programs later. Use digital tools to identify priorities and understand trade-offs and impacts.

Prepare the procurement organization to deliver consistently on the blueprint. Evolve the operating model, roles and responsibilities and skills as necessary. Focus on the plans for digital transformation. Identify what, if any, assistance is needed from a partner in any of these areas. Be sure to create accountability across executive leadership for all CLSM interventions.

Make all the changes part of the organizational DNA to keep delivering value over time. Focus on sustaining change and seeking out new opportunities for improvement. Operate as an agile and resilient organization with variable cost base and a fast-twitch structure that can flex with change. Embrace a continuous improvement mindset. Implement a robust control tower and reporting to verify that Procurement is consistently delivering on all opportunities to multiply value.

Change begins today

Now more than ever, the business needs Procurement to get the basics right and help drive topline growth. With CLSM, a data-driven operating model for managing the source-to-pay lifecycle that targets indirect and direct costs, Procurement can go beyond simply managing spend and unleash breakthrough value to help the business thrive.

Achieving breakthrough value

Clients tap into our unmatched skills, assets and capabilities to deliver sensible and sustainable savings that help drive digital transformation and new growth.

Consumer goods giant realizes $1B in savings​

Reinventing procurement by moving to a data-driven model.​ Read more.

Global beauty leader gets a procurement makeover

How Accenture SynOps is transforming source-to-pay for a global beauty leader. Read more.

Chad Gottesman

Managing Director – Operations, Procurement Business Process Services

Chad Gottesman is the global lead for Accenture's Sourcing & Procurement business.

Kristin Ruehle

MANAGING DIRECTOR, PROCUREMENT BUSINESS PROCESS SERVICES GLOBAL BUSINESS LEAD

With 18+ years' experience in Procurement and F&A, Kristin leads the Procurement BPS offering globally for Accenture Operations.

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