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The Spend Reduction framework is a detailed guide for conducting an Enterprise Cost Reduction project. The objective of this document is to describe and provide guidance around the approach and practices applied on spend reduction engagements.
- What is Spend Reduction: Spend reduction involves reducing operating expense on purchased goods and services through demand management, strategic sourcing, and procurement-related tax minimization. It also addresses the importance of a well-designed procurement function to achieving and sustaining spend efficiencies.
- How much does it save, how fast, and how many times have we done it: Spend reduction can lead to significant cost savings typically in the range of 10-25%. It usually identifies a mix of short and longer term cost reduction opportunities.
- How comfortable are we with existing content: Developed content has been reviewed and approved by SMEs. Additional content, potentially in a stand alone document, should be developed to outline techniques and practices specific to optimization of employee benefits.