The NSW Department of Trade & Investment (DTI) is responsible for a spend of approximately $700 million across multiple dispersed departments and a wide range of categories. In 2013 The NSW DTI engaged ADR Australia to conduct a spend and opportunity analysis to identify and prioritize savings opportunities for the current and following 2 financial periods.
The NSW Dept of Trade & Investments (DTI)
The aims of the project were numerous: Compile a detailed spend analysis by product category from information available out of multiple reports Identify spend categories that could yield cost savings Quantify the cost saving opportunity by assessing price and source flexibility and past effort and expertise applied to sourcing activities Develop a wave plan showing the sequence in which the cost savings should be progressed to deliver maximum benefit for the Department and meet cost savings targets Identify areas for potential value improvement Correlate the findings against a previous spend and opportunity analysis study completed by a third party Over the course of 3 months, including 2 visits to Orange during this time to engage with stakeholders, workshop the opportunity analysis and provide feedback, the project was successfully completed within budget and to the satisfaction of the client.
Despite capturing all spend transactions in SAP, the challenge remained to identify misallocations and those categories where the Department had little or no influence to obtain savings. In addition, sourcing history showing information such as source and price changes during the current and preceding financial periods was not available and was obtained by work-shopping the analysis with key stakeholders
267 product categories analysed Savings opportunity of 5.3% of assessed spend identified