Today we are pleased to welcome a guest post from Terri Hudson. Terri is the Managing Director of Baker Wanless. They are a UK based procurement consultancy who have been shortlisted for the ‘Best Business for Customer Service’ at the prestigious Croydon Business Excellence awards.
This is the second part of a series on how consultants can add value, you can catch up on Part 1 here.
How the industry has developed
“Cost avoidance should have the same value as cost savings”
Recently we have seen a maturity within the industry for consultancies to offer a defined value proposition. Clients are typically looking to achieve cost savings whilst maintaining quality and consistency of their sought after products or services. However, in situations such as the energy market, costs are typically increasing year on year, therefore the focus needs to be on cost avoidance and gaining a value from suppliers that are close to the true market value.
One aspect that benefits experienced consultancies is having an understanding of the market and the knowledge of areas where clients can save from their current expenditure. Understanding the bigger picture is key. Although suppliers might be facing increased costs and therefore raising the price of their given service or product. Without knowledge and analysis of the market, it may be unclear as to whether they are marking up the cost in an attempt to swell their own margin or that the increased value represents their increased costs.
Where consultancies work with a myriad of clients, they are not only able to benchmark costs based on what they have seen and achieved for other clients, they can also recommend scenarios to consider such as alternative specifications or cost structures.
A unique way in which consultancies can benefit in-house procurement teams is to offer alternative perspectives on their needs and processes. Consultants may have a broader knowledge of the industry, especially in situations such as a brand entering new or foreign markets. Examples of this could be suggestions of solutions that are different from their current suppliers or products needs. We assisted a client to switch to an alternative product (e.g. food and beverage companies switching to plastic rather than glass bottles), using suppliers outside of the typical vendor list or advice on legal obligations in a new market.
Managing Director of Baker Wanless
LinkedIn: Terri Hudson