Unlock Efficiency in Consulting Spend: How a Preferred Vendor Program Can Transform BFSI Operations

Introduction

The global consulting industry, worth $320 billion in 2022, is dominated by strategy, IT, and niche services. BFSI, a major consumer, accounts for 25% of this market.

Why BFSI Firms Hire Consultants

- Increasing Competition: Fintech and    insurtech are pressuring traditional   models. - Regulatory Environment: Complex   regulations demand expert guidance. - Digital Transformation: Technology advancements need skilled consultants. - Skilled Workforce Shortage: Talent  gaps make consultants crucial.

Challenges in Consulting Procurement

- Higher Rates: 10% - 15% higher costs   due to inefficiencies. - Multiple Contracts: Multiple contracts    with the same vendors. - Poor Supplier Management:    Inefficient supplier relationships.

Centralizing Consulting Procurement

- Cost Savings: Market bidding and   negotiations drive down costs. - Efficient Management: Preferred    Vendor Program (PVP) streamlines    relationships. - Improved Coordination: Consolidate   spend and improve supplier   relationships.

What is a Preferred Vendor Program (PVP)?

- Contractual Relationships: Pre-agreed   rate cards and contracts. - Expedited Timelines: Faster project    initiation with established vendors. - Informed Suppliers: Suppliers familiar    with company needs.

Implementing a PVP: The Three Phases

1. Change Management: Senior leadership     support and communication. 2.Procurement Process: Route requests     through procurement, use predefined     rules. 3.Supplier Selection: Choose from the    preferred pool or conduct quick RFPs.

Benefits of a Preferred Vendor Program

- Supply Base Consolidation: Streamlined   vendor pool, reduced administration   costs. - Competitive Pricing: Discounts up to 15%,   cost transparency. - Supplier Relationships: Better alignment   with company goals. - Reduced Risk: Established terms, higher   service levels, reduced third-party risk.

Conclusion

Adopting a Preferred Vendor Program in consulting helps BFSI companies achieve cost savings, enhance supplier relationships, and reduce risk. Embrace PVP to streamline consulting spend and drive operational efficiency.

Ready to Transform Your Consulting Spend? Explore how a Preferred Vendor Program can optimize your procurement strategy.