An agile, scalable and flexible business model that generates revenue, enhances service and mitigates risks.
Third-party costs can account for a significant percentage of an organization’s total operating expenses and yet many organizations struggle to find the time, resources, market intelligence or support to effectively manage third-party spend. Over a three-year period, HBR has found that organizations that actively manage third-party supply bases see a 5-7% overall reduction in costs versus a 5-7% increase in year-over-year costs for those that are not actively managing suppliers. Furthermore, third-party risks continue to increase and most spend-management strategies fail to mitigate risks – including contractual, financial, privacy and reputational – while also optimizing services and value.
Effective management of third-party supplier relationships is complex, requiring a specific skill set and level of subject matter expertise. In organizations that lack the requisite expertise, procurement is viewed as a cost center versus a profit center that is fully aligned with the overall objectives of the business. Clients partner with HBR to leverage our market intelligence and expertise in sourcing strategies to unlock this untapped value.