Normally when we speak about unbundling most procurement professionals think we are only discussing the separation of software from hardware in the procurement process.
It is primarily because of this reason that most procurement companies are not able to drive the type of savings that their customers deserve.
At Safe Sourcing we discuss unbundling all of the time. We discuss it regardless of category or product. As a result, our low quote savings average nearly thirty percent across all categories while other companies struggle to achieve half of these savings.
For the sake of protecting our value add, I will not give you specifics on products, but think of all of the elements that go into a product becoming a product. This process will surely uncover those value added costs associated with acronyms like customer relationship management or CRM which are used as an excuse to hide margin dollars.
If your e-procurement event is one line item, your solution provider is not doing their job. If your event is two line items your solution provider is probably not doing their job. How many products are you aware of that you buy either for reuse or for resale that are made up of one component?
There is a lawsuit going on in Europe as we speak where a major manufacturer is being challenged to unbundle a particular product family. If you are interested, you can Google the subject.
In the meantime, hold a white board session internally and list any product that you buy for reuse or resale and see how many line items you can come up with that make up the product. Now think about how you might use that information in a negotiation online or otherwise. If you can’t figure it out, give us a call at 1-866-623-9006.
We look forward to and appreciate you comments.
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