Optimizing Indirect Procurement in businesses: An Often-Underestimated Strategic Lever

Indirect procurement, also known as non-production procurement, represents an often-overlooked but significant portion of a company’s expenses. However, optimizing these expenses can generate rapid and measurable savings while enhancing overall performance.

In an uncertain economic climate where every euro counts, managing these expenses becomes a strategic lever for reducing costs without compromising quality or productivity, improving transparency and control over your suppliers, and freeing up resources to invest in innovation or growth.

At Pockann Consulting, we help companies of all sizes optimize their indirect procurement by drawing on a multidisciplinary network of expert consultants specializing in indirect procurement through BPO (Business Process Outsourcing). Each consultant focuses on a specific area in which they have in-depth knowledge and applies a proven methodology.

Indirect purchases include all expenses not directly related to the production of the final product or service.

Here are the main categories to optimize:

• Energy and utilities > Electricity, gas, water, fuels,

• Telecommunications and data > Mobile phone fleet, internet subscriptions, cloud solutions,

• Waste Management > Biowaste, cardboard & paper, plastics, metals, glass,

• Property & Casualty Insurance & Personal Accident Insurance > Professional Liability Insurance, Workers’ Compensation, business premises insurance, health insurance, life and disability insurance,

• Temporary Staffing and Recruitment > Temporary staffing, fixed-term contracts, permanent contracts, recruitment agencies,

• Maintenance > Machinery and production lines, IT equipment, vehicle fleet,

• Marketing and Communication > Printing, digital service providers, creative agencies, web agencies,

• Facility Management > Cleaning, building maintenance, space management,

• Security > Equipment, service providers, training,

• Corporate Catering > Cafeteria contracts, caterers, vending machines,

• Professional Services > Legal consulting, auditing, coaching, training.

These expenses, which are often decentralized and not readily apparent, account for an average of 15 to 30% of a company’s procurement budget. Optimizing them can therefore generate significant savings, sometimes in the range of 5 to 15% of the overall budget.

Indirect procurement is often less visible than production-related procurement, but it offers significant savings potential. Better control over these expenses not only reduces costs but also improves operational performance and service quality.

Indirect procurement carries significant impact in the cost structure:

• Multiple suppliers: A large corporation may have hundreds of suppliers for its indirect procurement, often with poorly negotiated or redundant contracts.

• Diverse categories: From telecommunications to food services, each category requires specific expertise.

• Impact on payroll costs: For example, a high rate of workplace accidents or occupational illnesses can increase your indirect costs (disorganisation, overburdened teams, lost time, etc.).

• Lack of visibility: Data is often scattered across multiple departments (HR, procurement, operating sites). Data management is the key to optimization.

Reliable data = management of operational profitability

• Poorly formalized processes: Orders are sometimes placed on an urgent basis, without analyzing actual needs.

When you don’t take the time to purchase, you pay the price!

• Decentralized management: Each site or subsidiary negotiates its own contracts, limiting economies of scale. A centralized procurement approach often strengthens bargaining power and harmonizes practices.

Strength in numbers: To make a difference, we must unite!

• Lack of monitoring: Few procurement performance metrics or KPIs are established and tracked to measure the impact of indirect procurement on overall performance.

You can only improve what you measure!

• Telephony: 20–30% reduction in costs by renegotiating service plans or pooling lines.

• Facility Management: Optimizing cleaning and security contracts, reviewing maintenance contracts, and pooling resources, resulting in savings of 10 to 20%.

• Temporary Staffing: Reducing recruitment costs by centralizing staffing needs and negotiating preferential rates, and reassessing the need for temporary staffing versus permanent hiring. Creating value by boosting social and economic performance, which results from these measures.

• Insurance: Auditing policies to avoid duplication or unnecessary coverage (up to 15% savings).

• Energy: Accurately defining energy needs, reassessing reliance on fossil fuels, and soliciting competitive bids from suppliers to reduce energy bills (up to 10%) while improving resilience to geopolitical events and reducing environmental impact.

At Pockann Consulting, we offer a structured and flexible approach that combines industry expertise with digital tools to maximize your savings.

What Is Indirect Procurement BPO?

BPO (Business Process Outsourcing) involves entrusting all or part of your indirect procurement management to a specialized partner. This approach provides rapid access to expert skills, management tools, and proven methodologies without having to build a full-fledged in-house procurement team.

At Pockann Consulting, we offer a structured and flexible approach that combines industry expertise with digital tools to maximize your savings.

What Is Indirect Procurement BPO?

BPO (Business Process Outsourcing) involves entrusting all or part of your indirect procurement management to a specialized partner. This approach provides rapid access to expert skills, management tools, and proven methodologies without having to build a full-fledged in-house procurement team.

Before implementing optimization measures, it is essential to understand exactly how your indirect procurement is managed. We conduct a comprehensive audit of your suppliers, contracts, expenditures, and processes to identify the main sources of cost overruns, potential risks, and opportunities for improvement.

Our analysis also allows us to compare your organization to industry best practices and highlight the most relevant levers to prioritize.

Example: A multi-site company working with Pockann Consulting discovered price discrepancies ranging from single to double the rate for identical cleaning and maintenance services across different sites, due to a lack of coordination or centralized negotiation.

Based on the findings of the audit, we develop a procurement strategy tailored to your company’s challenges and priorities. The goal is not only to reduce costs, but also to improve service quality, secure supply chains, and enhance the organization’s overall performance.

Depending on the context, the action plan may target several objectives:

• optimizing spending,

• improving lead times,

• enhancing service quality,

• or ensuring compliance with applicable regulations.

We identify the most relevant levers for change and define a realistic and measurable roadmap.

When multiple sites or entities are involved, we also work on consolidating procurement to strengthen the group’s negotiating power, while promoting the sharing of best practices and greater cohesion among teams.

To ensure the sustainability of results, we support the implementation of structured processes: supplier evaluation criteria, procurement procedures, management tools, dashboards, and performance indicators.

Example: For a small-to-medium-sized industrial company in the agricultural sector, we consolidated maintenance and energy procurement across multiple sites. This approach generated annual savings of 12% while maintaining the same level of service. The company also began transitioning to renewable energy, reducing its dependence on fossil fuels and improving its resilience to fluctuations in the energy market.

A procurement strategy only yields results if it is effectively implemented. That is why we support your teams in rolling out the defined actions to turn recommendations into measurable and sustainable gains.

Our support may include renegotiating existing contracts, assisting with a change in supplier or tool, and implementing new procedures tailored to your organization. The goal is to ensure a smooth transition while fostering buy-in from the teams involved.

We also provide regular monitoring of results using dashboards and performance metrics to measure savings achieved, identify variances, and adjust actions as needed. Effective indirect procurement management relies on continuous improvement and the ability to anticipate market changes.

Finally, we support the professional development of your employees through workshops, the sharing of best practices, and the dissemination of common metrics. This approach fosters team autonomy, develops a shared procurement culture, and ensures that the results achieved are permanent over the long term.

POCKANN brings a seafarer’s pragmatism and a farmer’s common sense. Our Breton heritage is deeply rooted in agronomy—whether on land, in the agricultural world, or at sea, in the maritime world.

This hands-on experience allows us to tackle procurement challenges with pragmatism, method, and efficiency. We work with both SMEs and the procurement departments of large corporations across a variety of sectors, including agricultural production (milling, market gardening, mixed farming/livestock), fishing fleets (coastal and offshore), the food processing industry, and retailers—B2B or B2C.

Our strength lies in our ecosystem of specialized expert partners. Depending on the procurement categories to be optimized and the objectives you’re seeking to achieve, we mobilize the expertise best suited to your project.

Challenges related to telecommunications, data, waste, energy, industrial maintenance, and insurance require different areas of expertise. That’s why we bring in specialists in their respective fields to provide relevant recommendations and deliver concrete results.

Each procurement category thus benefits from dedicated support provided by an expert who understands the market’s specificities, supplier practices, and the negotiation levers unique to that sector.

At Pockann Consulting, we prioritize a pragmatic and measurable approach. Our goal is not only to identify areas for improvement, but also to generate concrete and sustainable results for your company.

Each project is managed using performance metrics that track cost savings, cost trends, process improvements, and risk management. This approach ensures a clear picture of the gains achieved and facilitates decision-making.

Beyond reducing expenses, we also seek sustainable benefits: improving service quality, strengthening resilience in the face of market fluctuations, optimizing supplier relationships, and enhancing the skills of internal teams.

Indirect purchasing represents one of the largest and most underutilized sources of savings in many companies. Optimizing it not only reduces costs but also improves expense management, strengthens risk control, and enhances the organization’s overall performance.

Initial benefits can often be seen within the first few months in the most critical areas, while the most significant gains typically materialize over a period of 6 to 12 months. Each project is managed using metrics defined in collaboration with our clients to accurately measure the savings achieved and the attainment of set objectives.

Whether you already have a procurement department or wish to establish this function within your company, we tailor our approach to your specific challenges, resources, and level of maturity. For small and medium-sized businesses in particular, projects can be rolled out gradually so that the initial savings generated help fund the next stages of optimization.

Ready to identify your first cost-saving opportunities?