Strategic Sourcing of a “Difficult” Spend Category


As IT and organizational technology requirements have become more advanced, so too have procurement organizations in controlling spend and identifying cost reduction opportunities. However, as organizations have become more sophisticated in optimizing IT spend, we have seen procurement leaders fail to apply similar strategies to non-IT categories. Some clients have even deemed spend reduction in procurement categories like legal services, where recourses and expertise are concentrated within humans not technology, to be intractable. At Kepler Cannon, we continuously challenge these sorts of conventional wisdom.

Approach Highlights

For a recent banking client struggling to address excessive spending within legal services procurement, we disaggregated the types of legal work and segmented it along several dimensions. Using this information, we identified key levers within Demand, Process and Pricing Management as a means of controlling spend. We partnered with Legal to understand the sensitivities of certain types of matters and forged low noise strategies that achieved spend control without affecting their business.

As the chart below shows, the four opportunities identified, provided the most impactful savings opportunities at the lowest cost for this specific client. However, for any procurement organization, there exist a diverse menu of targeted opportunities to achieve greater control, efficiency and savings for even the most unique spend categories:

strategic sourcing 1


Whether it is a difficult to crack category like Marketing, Legal Services, Insurance or a procurement need specific to a given organization, leaders should never deem savings to be unachievable or too difficult at first glance. We firmly believe a wide array of savings opportunities can be uncovered when there are no limits to how procurement spend is addressed, and are eager to show more organizations these sources of competitive advantage.

Read More