A Procurement partnership with IT identifies a $4m+ cost reduction and deepens supplier relationships

Vision

The CPO of a global pharma wanted full oversight of external IT spend to deepen supplier relationships and secure better terms on strategic supplier contracts.

Challenge

• Employee numbers had grown from 400 to 6,000 in four years and external IT spend had significantly increased.​
• With no IT category management, procurement had limited transparency and oversight of external IT spend.​
• Existing IT contracts were based on lower employee numbers and not benefitting from volume-based terms.

Solution

We partnered with the CPO to support spend reduction and supplier renegotiation. Together we:​

• Collaborated with IT to get full transparency, conducting a detailed external IT spend analysis of 100 suppliers with a total spend of $45m.​
• Mapped a calendar of contract renewals in the next 3 years, leveraging an analyst to review market intelligence on pricing and negotiation points.​
• Prioritized the top-10 strategic supplier contracts including Workday, AWS, Lenovo, Oracle, DocuSign, SAP ERP support, where volume and multi-year deals could have significant impact on cost. ​
• Validated laptop model requirements by role level, reducing specs for 90% of employees and establishing a new laptop usage policy enabling significant annual savings.​
• Coached the team in negotiation skills, partnered on strategic supplier renegotiations, and built internal capability for continuous cost management and IT supplier relationship management. ​
• Supported recruitment and onboarding of a full-time IT category leader for ongoing IT category management.

Impact

• $4m (9%) spend savings identified in 100 contracts with a total $45m spend.​
• $2.8m year one savings from renegotiated top strategic supplier contracts. ​
• Strengthened category management capabilities to identify and track savings for continuous cost optimization and helped to onboard new IT category lead.