Optimizing indirect spend through autonomous sourcing can provide significant cost savings and efficiency gains for businesses. Indirect spend, which includes goods and services outside of a company’s core offerings, often accounts for a substantial portion of total expenditures. However, indirect spend is quite difficult to manage and optimize due to its dispersed nature. Autonomous Global Sourcing Company in India, such as Catalyst Sourcing can help you with supplier identification, contract negotiation, and procurement processes. This will allow your company to optimize indirect spend while reducing costs, labour requirements, and risk.
Understanding Indirect Spend
Indirect spend refers to the costs associated with the non-core goods and services a business needs to operate but does not resell as part of its products. Examples include office supplies, facility maintenance, travel, marketing materials, and professional services. Indirect spend typically accounts for 20% to 40% of a company’s total spending. However, businesses say their indirect spend is often not well managed. They estimate it equals as much as 20% of sales and translates to costs amounting to billions of dollars in wasted spending.
As one of the leading procurement consulting companies in India, we believe that buying indirect goods and services is often decentralized and unstructured, leading to higher costs and compliance issues. Challenges with managing indirect spend effectively include:
- Dispersed buying power across departments
- Higher prices due to a lack of economies of scale
- Uncoordinated supplier relationships
- Difficulty tracking third-party spend
- Maverick or unauthorized spending
The Power of Autonomous Sourcing
Autonomous sourcing aims to optimize indirect spend through:
- Precisely scoping project requirements and providing appropriate guardrails
- Identifying qualified suppliers aligned with business objectives
- Automating tens of thousands of sourcing events and transactions
- Maintaining full organizational compliance and risk management
The benefits of leveraging autonomous sourcing technology for indirect spend include:
- Lower costs through improved supplier negotiations and compliance
- Reduced manual tasks and more visibility into spend data
- Much less labour-intensive process, allowing procurement teams to focus on more strategic tasks
- Ability to reduce indirect expenditures significantly through economies of scale and standardization.
Key Components of Autonomous Sourcing
The key pillars of any autonomous sourcing system include:
- Supplier identification and evaluation tools that thoroughly vet potential partners
- Automated procurement processes for tasks like requests for proposals, contract negotiation and purchase order creation
- Contract management and compliance software that enforces policies and ensures supplier adherence
The Future of Indirect Spend Optimization
Autonomous sourcing aligns with the broader impetus for autonomous India Sourcing Company Services to replace outdated, manual processes in business. While some organizations may resist fully autonomous sourcing, the potential cost savings and efficiency gains on the table make a compelling case for embracing this new way of working – leaving substantial cost savings that can be reinvested to drive growth. For procurement teams, autonomous sourcing represents an opportunity to optimize indirect spend, streamline business processes, and move up the supply chain.
Choose the best Global Sourcing Company in India
Catalyst Sourcing offers an end-to-end autonomous India sourcing solution to optimize indirect spend. Our team of seasoned sourcing experts identify the best suppliers, automates procurement processes, maintains compliance and controls costs. This frees your procurement team from repetitive tasks so they can focus on strategic initiatives. By precisely scoping requirements, standardizing contracts and enforcing policies, Catalyst Sourcing’s autonomous solution can reduce your indirect expenditures by up to 20 to 30% through scale, compliance and operational efficiencies. Our global expertise and advanced technology give you the tools to maximize savings from your indirect spend. Without further ado, let us help you navigate the complete way of optimizing indirect spend with autonomous sourcing. Get in touch with experts at Catalyst Sourcing for a personalized quote today!
