Hackett’s Book of Numbers Shows the Path to Savings

I recently took around five pages of notes from an interview with Hackett's Pierre Mitchell on subjects ranging from tips for thriving in the current downturn to achieving savings in ways most procurement organizations rarely consider. I look forward to writing up the highlights of the these notes and sharing them in a post next week. Until then, it will be worthwhile to call attention to some of the highlights from Hacket’s new 2008 Book of Numbers. According to a recent press release on the subject, Hackett's research shows that world-class organizations, "now spend 22% less than typical companies on procurement operations (.64% of spend for world-class companies versus .82% for typical), and operate with 37% fewer staff (48.4 per billion US$ of spend for world-class companies versus 76.4 for typical). They also generate 129% higher spend cost savings, including reduction and avoidance while also delivering great stakeholder satisfaction and support for initiatives in sustainability, innovation, working capital improvement, and other areas. At a typical Global 1,000 company (with annual revenue of $22 billion and annual sourceable procurement spending of $8.9 billion) this represents more than $16 million in annual savings on procurement operations, 249 fewer procurement staff, and over $263 million in additional annual spend cost savings."

These numbers only scratch the surface of the detailed information Hackett shares with its benchmarking and consulting clients. Time and time again, I find myself recommending Hackett to companies wanting to understand how they stack up relative to their peers. While many organizations are now focused on commodity market benchmarking efforts, they should be equally concerned with understanding the specific gaps that are causing them to perform at levels beneath their peers. For companies that are not Hackett clients, it's now possible to take advantage of some of their benchmarking research by participating in a new study that appears will "enable companies to assess on a broader evolutionary scale both the value proposition of their procurement service offerings and also the capabilities needed to support them." For those who provide survey data, Hackett will provide "a customized report discussing the study results, and an analysis of significant shortfalls and insights from Hackett on how to close performance gaps." To participate, click here.

- Jason Busch

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