Digital Transformation Consulting

The private equity client faced significant challenges in capturing sustained value through procurement due to limited early focus, insufficient analytical groundwork during the due diligence phase, and a tendency to target only low-hanging fruit such as tough negotiations and RFPs. They lacked a tailored procurement playbook and faced resource constraints, which prevented consistent delivery of savings and caused initial hard-won cost reductions—ranging from 8-12%—to diminish over the investment hold period.

In response, a comprehensive, industry-specific procurement strategy was implemented during the due diligence phase, with proactive planning within the first 100 days post-close to identify and act on opportunities, ensuring the initiatives could run in parallel with other high-priority efforts. The approach emphasized employing the full spectrum of procurement tactics beyond pricing negotiations, leveraging commercial and technical levers—including value-based deals—to deliver up to three times higher savings throughout the investment lifecycle.

A tailored procurement playbook was developed to create repeatable, industry-specific protocols, enabling the client to systematically uncover new opportunities rather than passively wait for them to emerge. Recognizing internal resource limitations, especially in mid-market portfolio companies, the client harnessed procurement technology such as generative AI, which automated tasks, addressed skills shortages, and accelerated the realization of savings. This strategic overhaul resulted in more sustainable cost reductions, improved margin enhancement, and freed capital for reinvestment, ultimately maximizing the procurement function's impact on the client’s investment returns.