Will we really save more using Provalido?
When talking with people about Provalido, we used to advise that organisations wouldn't actually save more by using Provalido, but it would make managing and reporting those savings much easier. However, we're suckers for data analysis so thought we would take a look at what Provalido customers report as savings in their first year of using the platform versus the year before. What we discovered surprised us:
Average Savings Increase: 18%
Average Annual ROI (on cost of Provalido): > 50x
Average Payback Time: < One Week
So the numbers are pretty convincing, but the question then turned to “Why do organisations save (or at least report) more when using Provalido?” Our system brings value by helping at all stages of the process, which is great, but the tool doesn’t actually make the savings itself. So what’s driving the increase?
Listening to customers about what they have experienced since adopting our tool, there are some key themes that the increased savings could be attributed to:
Being a cloud solution the whole procurement team on every site has access to the system. It provides a central place to work together on projects, collaborate across traditional silos, learn from each other and combine procurement targets and goals. This should lead to more ideas feeding the "savings funnel", many of which will lead to implemented saving.
Sometimes it takes a catalyst such as a new technology to change the way people work, and in turn redefine a process (is a process something you follow, or a description of what you do?). A system with a robust workflows, cross-organisational goals, approvals, and live reports provides a new way for procurement teams to achieve their savings objectives.
Guided Approach to Projects
Not every procurement professional is experienced in running cost reduction projects. Using a tool that can be configured with a variety of project types along with project templates including standard task structures can help with this, enabling procurement teams to hit-the-ground-running, taking a simple consistent approach and focusing their efforts on the savings activity more than the plan.
Live project reporting, savings dashboards, financial visibility and transparency all bring the whole savings process to life, making it a collective effort right across the organisation. It provides a direct link between organisational goals, personal objectives and day-to-day business activities. When personal success and bonuses are linked with savings targets the game becomes one of constant focus and achievement.
Cause or Consequence?
It’s possible that some of the increased savings “would have happened anyway” and that using Provalido is a consequence of a heightened focus on savings within an organisation. However, the analysis provides a strong case that Provalido is at least partly the cause of the increase in savings. Whichever way round it is, there’s no doubt that best practice demands a savings management tool like Provalido, while the Provalido tool itself will drive best practice, and with the right process and the right technology, procurement performance will be optimised.
If you haven't taken a look at Provalido yet then request a demo or just contact us to find out how you too could be reporting higher numbers.