Senior management of a large hotel chain saw the opportunities in bottom-line improvement through realization of savings in procurement. Hence, Prokura was engaged to perform a diagnostic to systematically examine the current maturity of the client’s procurement activities and identify the optimization potential.
By applying our proven methodology, we carried out a three-step diagnostic:
- Step 1: establishing the fact-base, which provided clearer picture and identified annual total spend of 5.4 billion NOK
- Step 2: based on the established transparency in Step 1, identify savings potential through structured analysis including quantitative, data driven deep dives and qualitative interviews with key client stakeholders
- Step 3: creating a concrete action and implementation plan for realizing the identified savings
As a result of the project, it was identified that 2.3 billion NOK of the total spend can be addressed in the next 2-3 years, while the savings potential was estimated to be 135-237m NOK (6~11% of the addressable spend). In order to realize such potential, several improvement actions in the role and focus of the procurement organization, standardization of purchased services/products across, a structured method of ensuring competition have been identified.
To find out more about this case and other industry solutions for service companies, please contact Jens Holbek.