Global centralized strategic sourcing

The client lacked a centralized and coordinated approach to purchasing telecommunications solutions. Instead, both major global and local providers were used across more than 250 production and sales sites, limiting the advantages of purchasing power.

The LVP team collected and examined the client’s telecommunications suppliers, annual needs, and spending. They identified potential savings and pinpointed technical and organizational barriers to cost-effective operations. Specifically, the LVP team:

• Interviewed management and IT teams to understand the current situation and telecommunications requirements.
• Found opportunities to involve global, national, regional, and certain local suppliers in the qualification process to gain significant operational advantages and reduce costs.
• Defined three target categories for strategic sourcing: data lines, wireless solutions, and conferencing.

To realize total cost savings, LVP Consulting carried out a strategic sourcing project focused on Telecommunications, with an annual sourceable spend of about $7.4 million. LVP then:

• Collected and detailed data requirements and purchasing profiles for the three target categories.
• Trained the client team in methodology, executive communications, negotiations, executive interviewing, supplier due diligence, and alliance management to ensure lasting improvements.
• Dedicated substantial time and resources to gain deep industry and market understanding.
• Identified and developed category-specific negotiable issues for efficient and effective negotiations.
• Encouraged the client to evaluate all providers during the selection process.

Cost savings were realized by streamlining the client’s supply base and enhancing alliance management.

• Achieved $2.9 million (39%) in annual savings.
• Consolidated supply base to a single core provider for all target categories.
• For the first time, gave the client clear visibility into actual telecom spending.
• Enhanced the product offering for the client’s employees.
• Implemented an alliance management review process to ensure ongoing partnership success.
• Created a central contact point to manage the relationship between organizations.
• Improved compliance monitoring by moving all telecommunications purchases to a master corporate account.