Indirect Spend Optimization

Achieving Cost Excellence in Indirect Spend

The business impact of mastering indirect spend

Strengthen financial performance

Indirect procurement offers rapid, measurable savings that flow directly into improved profit and cash flow.

Unlock funds for transformation

Freed-up resources can be channeled into long-term initiatives, from innovation to ESG programs.

Build competitive advantage

Smarter procurement increases transparency, mitigates risks, and enhances sustainability, strengthening market position.

Achieving Cost Excellence

Supply Management Insights Issue 16

Our cover story focuses on indirect spend – an often-overlooked category that can deliver rapid, measurable results across IT, logistics, and professional services if managed with focus, structure, and collaboration.

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Indirect spend: the untapped potential

Indirect spend typically accounts for 20–30% of company costs. Categories like IT, logistics, marketing, professional services, and facilities management are essential to keep the business running, but they are rarely managed with the same discipline as direct spend. This is a missed opportunity: well-targeted actions in indirect procurement can deliver fast, measurable savings and significantly boost competitiveness.

In fact, a 5–7% reduction in indirect spend can have the same financial effect as a major uplift in sales. With cost reduction being top priority executives, indirect procurement should be at the center of every cost excellence agenda.

Common challenges

Despite the potential, many organizations struggle to capture savings because:

Spending is fragmented and prone to maverick buying
Data is incomplete or inconsistent, limiting cost transparency
Procurement often has little involvement in key indirect categories

The result: hidden costs, untapped savings, and weaker competitiveness.

Our approach
Three levers for cost excellence

We help organizations turn indirect procurement into a true value driver by focusing on three proven levers:

1. Centralize & Collaborate
Consolidate spend wherever possible to capture scale benefits, backed by clear governance and collaboration between local and central teams.

2. Strategic, Cross-functional Sourcing
Establish sourcing councils that unite procurement and business leaders, ensuring structured supplier selection and alignment with strategic goals.

3. Digitalization & AI
Harness advanced analytics and GenAI to accelerate savings through spend categorization, supplier consolidation, and smarter negotiations. In some categories, AI can reduce costs by up to 40%.

Focus topics in indirect spend

We bring deep expertise across all major indirect categories:

Marketing & Media
Smarter budget allocation, agency model optimization, and performance tracking powered by data and AI.
Professional Services
Transparent rate structures, demand management, and clear KPIs to ensure value for money.
Logistics & Packaging
End-to-end cost optimization in transport, warehousing, and packaging, while improving service levels. (Learn more)
Facility Management
Supplier consolidation, regional sourcing, and sustainability-driven facility strategies.
Tech Sourcing
From software licensing to cloud migration, we deliver cost transparency and negotiate flexible, scalable IT service models. (Learn more)