Supplier Cost Reduction

Valorant has successfully helped financial services companies optimize their third party vendor spend to achieve savings of ~10%. Assuming a financial services company spends $200M - $300M with third party suppliers every year, this translates to $20M - $30M in annualized savings.

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IDENTIFY GOALS AND COLLECT SPEND DATA

The engagement begins by understanding the client’s cost optimization objectives & targets. Valorant then collects 1-2 years of third-party spend data, cleans it and organizes it into our proprietary taxonomy for financial services specific spend, to get it ready for analysis.

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BENCHMARK CONTRACTS AND CONDUCT INTERVIEWS

Valorant performs a benchmarking analysis of the client’s top 50-100 suppliers contracts to identify high value and quick win opportunities. The next step includes interviews with key business stakeholders in IT, Accounting,Claims, Underwriting, and Marketing to understand the nuances of each target spend area and to also identify any pain points in the existing supply base.

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PRESENT EXPENSE REDUCTION OPPORTUNITIES

Further, We develop an opportunity assessment called the “Expense Reduction Improvement Plan” which reflects validated opportunity areas including spend and savings projections by category. The opportunity assessment exercise is followed by a proposal to deliver these savings to the bottom line, typically through strategic sourcing and process improvement projects.

opportunity for third party cost reduction through supplier consolidation

Illustrative Example
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EXECUTE PROJECTS TO DELIVER BOTTOM-LINE SAVINGS

Upon receiving the go-ahead, we switch gears to project execution phase. We leverage the data collected in the first step, and relationships developed with client’s team through the interviews, to kick start initiatives on an aggressive timeline. Unlike traditional consulting companies, we perform every step of the process including spend analytics, designing & publishing RFP’s, project managing the full process, direct negotiations with vendors, and support for contracting and supplier on-boarding as well.

This program generally delivers a 4-8X Return on investment for our clients. Valorant has a strong track record delivering savings above our initial estimates. We firmly believes in under promising and over delivering.

LET’S TALK

Please reach out to us if you’re interested to know how Valorant can help your organization save more while reducing risk.

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