Gartner Research

Cost Optimization Secrets: Strategic Sourcing and Vendor Management Realign Costs and Protect Revenues

Published: 29 February 2016

ID: G00301286

Analyst(s): Stewart Buchanan

Summary

Overspending can be reduced, but significant savings are only achieved by restructuring costs through strategic change. Strategic cost optimization depends heavily on successful market intelligence, planning and execution by sourcing, procurement and vendor managers.

Table Of Contents
  • Key Challenges

Introduction

  • Cost Optimization Strategies Succeed or Fail as a Result of Effective Execution

Analysis

  • Take Advantage of Business Leaders' Increased Appetite for Change During Times of Economic Stress to Restructure the Organization's Sourcing Strategy and Eliminate Unsustainable Costs
  • Create a Core Cost Optimization Team That Aligns Strategic Planning and Execution Activities With Shared Targets
    • What Cost Is Optimal?
    • Track Cost as a Moving Target
    • Maintain Consensus Under Pressure
    • Reward Team Effort
    • Recognize Value
  • Restructure Operational Spending to Channel Funds Into Initiatives That Drive Business Value, Such as Digital Business Innovation, Competitive Differentiation and the Renovation of Core IT
    • Realign Value
    • Protect Value

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