Financial services /
Business need: Attain spend visibility and cost savings
Spend visibility is a common and ongoing financial performance goal for many law firms and companies, including private equity and investment firms looking to maximize their portfolios or preparing to sell a business. One of the drivers for this client, a multinational investment bank and financial services company, was advance planning for the eventual spin-off of a business unit that provides security and facility services for customer sites across North America.
The business unit lacked spend visibility, with no indirect spend metrics. And, due to constrained internal resources, the business also was lacking standard policies, category management, market pricing and structural knowledge.
Business solution: Assessment and monitoring of significant expense categories
LAC Group was brought in to establish goals and complete a holistic assessment including in-depth analysis of usage, pricing, contracts and processes in order to identify savings and implement programs to monitor and optimize procurement. After an exhaustive analysis, recommendations were made across several significant spend categories including shipping, multifunctional device (MFD) equipment and supply costs, office products, background and drug screening, telecom, uniforms, electronic payment commerce, and treasury management.
Implementation options were presented for significant savings opportunities. A final pricing plan and contract was negotiated with a key incumbent vendor to ensure maximum benefits. In addition, LAC Group delivered the following:
- Best in spend category pricing and structure.
- Creation and implementation of an expense audit policy.
- Revisions to all vendor SLAs and contracts.
- Involvement of corporate staff into spend issues and solutions, bringing awareness and focus to what they buy and how they make business purchases.
- First level of standardization, right-sizing and streamlining of purchasing activities.
Business outcome: Spend visibility and significant bottom-line savings
LAC Group was able to deliver the client’s desired goals for the business unit, including improved spend visibility and category management. Costs were reduced by 32% across multiple indirect spend categories and an additional $400,000 in savings were recovered from eliminating renewal fees and spend overages. The team stayed engaged during the contract life cycle to support and monitor purchasing efficiencies, audit savings and offer continuous category management support.
The client recently sold the business unit for around $1 billion US.