The techniques employed by private equity are not unique to the sector. They are available to all those endeavouring to improve procurement efficiency
Professional buyers can benefit from the experience of private equity investors to improve business performance, say procurement consultants Efficio.
In a Viewpoint article titled “Improving procurement: what CPOs can learn from private equity”, Efficio says that contrary to widespread perception, private equity is not just about taking on troubled firms but about improving their performance.
Industry figures show private equity (PE) investments in large European companies have improved their productivity by 7 per cent annually.
The Viewpoint’s author, Declan Feeney, Director, Private Equity at Efficio, says procurement is one of the key levers to adding value when PE investors take over a firm. It can account for up to 60 per cent of revenues in a typical manufacturing company. Paying attention to procurement spend can result in a 33 per cent improvement in profits.
Feeney says Efficio’s experience with PE firms suggest there are some ”very clear pointers to success”. These include that management must be given a strong mandate and targeted to deliver real results, and interests must be effectively aligned across the various business units and/or functions impacted by procurement.
It is imperative that this alignment is reflected at top management level clear decision-making authority and all stakeholders - finance, the CPO and cross-functional sourcing teams must be quickly mobilised and engaged in the improvement process.
The company must be willing to upgrade or supplement the procurement team by bringing in new or additional people or consulting support, and measurement tools must be introduced to ensure savings are delivered and maintained.
The Viewpoint concludes: “The techniques employed by private equity are not unique to the sector. They are available to all those endeavouring to improve procurement efficiency and effectiveness in their own organisations.
“Procurement professionals can learn from the approaches employed by PE houses. The lessons for CPOs across all industry sectors are clear: if private equity can do it, so can you!”
Notes to editors:
Improving procurement: what CPOs can learn from private equity can be downloaded from: http://www.efficioconsulting.com/_uploads/documents/view-poi...
Efficio is a results-focused procurement consultancy with a track record of helping leading organisations achieve more value from their procurement. It is headquartered in London, UK, and has offices in France, Germany, Switzerland and the US.
Efficio combines the credentials of a top tier firm with the depth of expertise of a flexible niche player. Clients include 3i, AstraZeneca, Barclays, BAT, Biffa, British Gas, Ford, Scandic, HSBC, KKR, Nokia, National Grid, O2, Tryg and Thames Water among others.
For more information please contact:
Georgina Golding, Marketing Manager, Efficio, on:
+44 20 7550 5681 or email@example.com
For further information on Efficio please see: www.efficioconsulting.com
This press release was distributed by ResponseSource Press Release Wire on behalf of Efficio in the following categories: Business & Finance, Manufacturing, Engineering & Energy, Construction & Property, for more information visit https://pressreleasewire.responsesource.com/about.