What are the challenges facing the sourcing and procurement organizations today?

17:17 | Rio Pesino | Apr 28th, 2008 4:47pm |

Join BearingPoint senior manager Bill Stotzer in exploring the challenges facing the sourcing and procurement organizations today. Many financial institutions have identified procurement cost savings and made an attempt at cost reduction. Some have achieved greater success than others. We see two primary factors contributing to the low success rate in cost reduction. First, due to favorable market conditions in the Financial Services sector over the past five years, minimal attention was paid to cost effective Sourcing and Procurement. Second, the financial services industry has also experienced a significant amount of merger & acquisition activity over the last 5 years. Although a fair amount of integration activities have occurred, the combination of these institutions has created another set of challenges.

Sourcing and procurement cost takeout is very easy to understand at the strategic level. One needs to identify where an organization can consolidate spend, use enterprise leverage to negotiate lower unit cost, and then direct the users to purchase from the new enterprise contract. However, in a large global institution, with a fair degree of autonomy in the business units, these tasks can be very ...