Strategic Indirect Spend Control

While direct spend is often the main focus for procurement organizations, overlooking the impact of indirect spend could be costing your business more than you realize.

Indirect spend includes all the costs that are not directly related to core products or services. For example, office supplies, IT services, marketing expenses, utilities, and more. They might seem like a small part of your costs, but together, they can be as much as 15-30% of the total spend depending on the industry.

Companies often overlook the potential for reducing costs within indirect spend categories. However, having an effective strategy for your indirect spend can bring many benefits to organizations, such as:

·     Process improvement: By improving and streamlining processes, approval workflows can be simplified, more efficient vendor management procurement processes can be achieved, thereby freeing up valuable time and resources.

·     Risk mitigation: It is not only about reducing costs, but also about ensuring compliance, managing supplier relationships, and reducing potential risks associated with the product or service.

·     Sustainability: Indirect procurement also plays a role in achieving sustainability goals by selecting eco-friendly suppliers and products and in that way reducing the carbon footprint.

·     Data-driven insights: Having proper control of the spendings isn't guesswork. Utilizing analytics togain data-driven insights enables informed decision-making.

·     Financial strategy: Balancing direct and indirect spend control creates a well-rounded financial strategy. Only focusing on direct spend neglects a significant portion of your spendings.

At Three P, we don't just scratch the surface. We dig deep into your organization's spending patterns and adapt strategies to align with your goals. Our team of procurement experts specializes in identifying opportunities to optimize spending so you can focus on more value-generating initiatives.

If you want to know and discover how we can help you reduce your direct spend or support your organization’s strategic procurement services in other ways, don’t hesitate to reach out.

August Tegbrant

+46 (0) 760 155844