183: How to Stop the Leaks & Maximize Your Savings Potential w/ Tom Beaty

Over the course of the last 15 years, Tom Beaty has grown Insight Sourcing Group (ISG) from a one-man operation to one of the leading procurement and sourcing consulting firms. Ranked by Inc Magazine among the fastest-growing private companies in America for the last 10 years, ISG is regularly recognized as one of the nation’s best boutique consulting firms to work for.

In today’s episode, recorded live at the SIG Spring Summit, I start by asking Tom what he is seeing in the field today in terms of the key challenges that CPO’s are facing, and some of the ways that they are working to solve those challenges.  We then focus on the topic of “what comes after sourcing”. We explore the startling statistic that only 60% of “addressed” spend is actually spent with the contracted supplier, and specifically, how can procurement professionals address and mitigate the risk of the savings leakage that occurs as a result.

“In indirect spend, it consistently is around 60% goes to the correct vendor. We’ve got different ways that we model that. And that data is pretty consistent with what other research firms have seen. You think about that and it’s like “That’s crazy!”… It’s so consistent across different companies regardless of the maturity level that you just have to begin to wonder what’s going on. – Tom Beaty

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About the author

Philip Ideson

Philip Ideson is passionate about the role that procurement professionals and leaders can plan in creating competitive advantage for their organizations in ways that go beyond the traditional value proposition.

Philip founded Art of Procurement as a way for the procurement community to learn from each other, increasing the impact they have on their organizations. In 2017, he co-founded Palambridge, a virtual platform of procurement experts, technology, and intelligence. Palambridge provides a broad range of flexible procurement solutions, available on-demand.

Prior to Art of Procurement and Palambridge, Philip enjoyed a career that spanned the procurement value chain, working across three continents for organizations such as Accenture, Procurian, Ally Financial, Pfizer and Ford Motor Company.