A Tale of Two Case Studies: Centralizing and Getting Spend Under Management in Fast Food and CPG

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Centralization of sourcing operations and overall spend has literally been at the center of debate in a number of ways for procurement practitioners.

A few months ago, our editor at large Sydney Lazarus answered a reader’s question on the very topic. In her reporting on whether centralizing or decentralizing sourcing structures of procurement organizations is the way to go, she wrote that “company size, location, expansion rate, purchasing category and industry are all factors that affect whether a more centralized or more decentralized structure is better.”

Several of those factors played into two case studies from BuyerQuest focusing on how a large quick-service restaurant corporation and a CPG organization used e-procurement technology to confront their centralization challenges.

The QSR giant (the name of which you can probably guess, based on the numbers to follow), needed to centralize its spend across its massive geographic footprint and get it firmly under management — especially due to its thousands of franchisees. For the CPG firm, centralizing and capturing 100% of its indirect spend was paramount.

Getting $5 Billion in SUM Across 35,000 Restaurants

The quick-service restaurant organization confronted poor user adoption for procurement technology across franchisees and geographies due to “a non-mandated culture which discouraged pushing corporate initiatives.”

In short, they needed something that its decentralized employees would adopt organically and easily. (High employee turnover in that industry didn’t help either.)

The desired outcome was to “increase the number of participating restaurants, increase the number of spend categories in the marketplace, decrease order cycle times, and, ultimately, achieve significant costs savings,” according to the study.

After implementing the e-procurement solution over eight months — for which they reportedly required no formal end-user training — the organization saw nearly 30% growth in user adoption and a decrease in PO cycle times.

Courtesy of BuyerQuest

Getting $4 Billion of CPG Indirect Spend Under Control

This CPG organization’s main pain likely applies to myriad companies: taking the manual, time-wasting steps out of the requisition and approval process.

A big part of their goal was “consolidating all catalog, non-catalog, services, and Material Master (MM) content” in one spot, within a “seamless” P2P process, according to that study.

Ultimately their implementation of the e-procurement solution, which took about six months, “resulted in increased compliance to approved suppliers, contracts and procurement policies, robust user adoption, and nearly $3 billion in fully managed spend transacted through [the platform].”

It also boosted cost savings and productivity gains.

Courtesy of BuyerQuest

“Nimble” Needs?

But how do you know if BuyerQuest’s e-procurement solution is right for your organization? According to Spend Matters’ Q4 SolutionMap, BuyerQuest scored as a solution leader for its e-procurement offering and capabilities across all five personas.

SolutionMap buying personas reflect different organizational needs tied to the unique value propositions served by a provider, and SolutionMap provider rankings vary based on weighted requirements by persona.

Interestingly, BuyerQuest scored best as a solution leader for the Nimble persona, as you can see on this page. Procurement organizations fitting the Nimble persona are often decentralized, and although the two large, mature organizations profiled in the case studies above may indeed fit into multiple buying personas in the SolutionMap, they look to have matched up their Nimble-like needs with BuyerQuest’s unique value prop.

What are your organizational e-procurement needs? Check out how BuyerQuest stacks up against other e-procurement providers on Spend Matters Q4 SolutionMap here.

Deeper Analyst Insight

“BuyerQuest was one of the first providers to focus significant efforts on improving the user experience beyond just a ‘walk-up’ shopping UI,” according to the Spend Matters analyst team’s analysis.

Although BuyerQuest does not have a large number of customers compared to other providers, “its current customers include many with a global presence and complex requirements in their customer base,” according to our analysts — as reflected in the two case studies.

If you’d like to bolster your e-procurement provider intelligence or benchmark your shortlist, access deeper analysis from the Spend Matters analyst team by contacting us!

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