What is indirect spend?
Indirect spend refers to goods and services used in daily operations that are not incorporated into a product or service you create and sell. Indirect spend includes such expenditures as payroll processing, background checks, information services, facilities management, office equipment and supplies and travel expenses.
What do spend management consultants do?
Spend management consultants ensure that companies don’t overpay for the goods and services they need to run their operations. LAC Group’s spend management services include a spectrum of support and managed services, including assessment of savings opportunities, vendor management, contract negotiations, invoice monitoring and other contract compliance services and more.
What does your spend management process entail?
We follow a five-step methodology, market-tested and refined over years of experience across various industries and organization types. It starts with an initial assessment and detailed report of our findings and recommendations. With your input and approval, we move into custom program design and implementation. Once the program is in place, our analysts work in the background to ensure you are being correctly billed and serviced, contract terms are being met and savings are realized.
How much time does a spend management program take?
Your time involvement is concentrated at the beginning—when we meet with your key stakeholders and decision makers to assess needs, issues and objectives—and during the RFP and contract negotiation processes. Once your spend program is implemented, you may email or phone at your convenience to address and resolve issues as they arise, and we meet periodically based on your preferences for ongoing progress and strategy discussions.
What can you do that our procurement department doesn’t do already?
Deliver support and value-added services: vendor-neutral eyes, ears and voice; fresh perspective beyond internal cultures and preferences; extensive analysis such as savings opportunities and specific vendor motivations; access to information beyond the limits of internal knowledge and data. We monitor and audit invoices and vendor billing practices to ensure contract compliance. Perhaps our greatest value is that we are an extra resource that pays for itself, giving busy procurement managers time and capacity to focus on other priorities and deliver improved financial outcomes.
What if I’ve negotiated the best terms already?
Many of our clients do an excellent job in vendor selection and contract negotiation, yet we often uncover additional cost-saving opportunities. Every engagement begins with an initial, free consultation and assessment, in which we validate your vendor terms and choices based on a broader perspective of markets for benchmarking comparisons. We can point to many instances where clients have been pleasantly surprised at the savings and other enhancements we deliver.
How does working with LAC Group affect our existing vendor relationships?
Your existing business relationships matter to us and we strive to keep them intact, especially with valued, strategic suppliers. We objectively monitor billing and other contract compliance considerations, because mistakes and omissions can happen even with the most trusted vendors. In some cases, we identify situations where different vendors could service your needs more efficiently, save money or provide other benefits. In that case, we can make recommendations and help manage the RFP and contract negotiation process.
I just signed or renewed a vendor contract; do I have to wait until the next cycle to bring in LAC Group?
No. The sooner you engage, the sooner you can realize savings and other benefits. We can begin with regular monitoring and audits to ensure your contracts are being followed accurately and consistently. We can also assess vendors, plan future RFPs and analyze other spend categories for potential savings.
How does LAC Group differ from other spend management consultants?
LAC Group is comprised of a diverse mix of business executives with years of financial, procurement and line-of-business experience. Our methodology has been proven to save money in corporate and legal market and to ensure those savings remain in place over the contract lifecycle. Our vendor-specific knowledge includes extensive benchmarking data, pricing methodology, margin analysis, vendor motivation and specific KPIs for each spend category.
What indirect spend categories does LAC Group specialize in?
We offer guidance across most typical indirect spend categories, including facilities expenses, HR expenses like payroll and background screening, information center / library services, office equipment and supplies, operating services like uniforms and shipping, and telecommunications services.
How much does it cost to hire consultants for spend management services?
Spend management consulting firms may price their services based on an hourly rate or project basis or based on a portion of actual savings. LAC Group’s spend management services are based on actual savings we identify and attain. We don’t engage unless we can save your business money, so you incur no financial risk.
What kind of indirect cost savings can I expect?
Savings are based on several factors, including your business size and location, the sophistication and size of your procurement function, the spend category and more. Typical savings may range from 15 to 50%.