Third Party Cost Optimization

Context & Objective

The client wanted to identify cost saving opportunities and secure a streamlined purchasing process, whilst also making a thorough analysis of existing supplier base and open it up for competition.

Approach & Result

The project was conducted in two phases. During the first phase PIR conducted a spend analysis to identify and categorize consolidation opportunities, followed by an opportunity assessment of found opportunities. The second phase included sourcing optimization and development of the sourcing function, including several RFx processes and renegotiations with current supplier base.

The project resulted in a total estimated saving of 6% per year on addressable spend, and 25+ new agreements with suppliers. Additionally, the development of the sourcing function resulted in updated purchasing documentation and routines, clear purchasing guidelines, updated Data Protection Agreement, template for Termination Agreement, and general Terms and Conditions.

Cost Optimization

Industry: Private Equity

Cost Optimization

Cost optimization of indirect spend at ICA
Summary

To adapt to a new, more challenging market, ICA underwent a significant cost reduction program and re-organization. As part of this initiative, ICA approached PIR and Aurentor for assistance in reducing their indirect spend.

The project had an immediate positive effect on the bottom-line result and will in total reduce ICA’s indirect spend by 300 MSEK. This initiated a change in how ICA works with indirect procurement by introducing category management and instilling confidence when negotiating with suppliers, thereby shifting the scale in favor of ICA.

Background

In the face of shifting market trends, with premium assortments and stores giving way to low-cost and budget options, ICA found their position challenged. To remain competitive while managing the inflations raising costs of interest and supply, the company needed an overarching cost transformation.

One of the identified cost transformation opportunities was within goods not for retail where ICA hoped to reduce their addressable spend by 5-10%.

This target was highly ambitious and demanding, challenging the entire organization to find cross-functional cost opportunities within a decentralized structure. Many tough decisions had to be made with a top-down perspective, while they at the same time needed to stay true to the company's core entrepreneurial values, with bottom-up ownership. Additionally, the company underwent a major reorganization during the cost transformation, which increased uncertainty and raised the decision-making threshold, making cost prioritization difficult.

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Industry: Retail
Cost Optimization Sourcing Advisory

Vendor & Contract Managment core system transformation and system outsourcing
The client, undergoing an operating model transformation, required support in a workstream related to a core system transformation and legacy system outsourcing, to reach full potential of scale and efficiency.

PIR was brought in to set-up governance structures and manage commercial and contractual compliance of the external system integrator (driving implementation and system roll-out) and outsourcing partner (taking over services for existing legacy platforms).

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Industry: Financial Services
Cost Optimization Sourcing Advisory

Insourcing, vendor managment, and SaaS procurement in HR transformation
The client, driving a large-scale HR transformation, required support with replacement of several business-critical applications (e.g., HR admin, WFM, Payroll), insourcing of outsourced HR services and establishment of an internal Shared Service Center (SSC).

PIR was brought in to advice the program management team on sourcing related enquiries, vendor- and contract management, and to support the client in managing the strong dependencies between contract and deliveries to ensure a successful transformation.

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Industry: Travel & Transportation

All Engagements

Third Party Cost Optimization

Context & Objective

Approach & Result

Cost optimization of indirect spend at ICA

Summary

Background

Vendor & Contract Managment core system transformation and system outsourcing

Insourcing, vendor managment, and SaaS procurement in HR transformation

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