Strategic Procurement from a sector wide standpoint has many benefits. These benefits include:
- Cost Reduction – a reduction in the cost to do business; these cost savings should be evident for both the vendor and the companies.
- Demand Aggregation – an improved ability for Companies to aggregate demand for product and services via term, group or volume purchasing commitments.
- Simplified Processes – A reduction in the bureaucracy required to engage with vendors, including (but not limited to) common terms and conditions, a single price list and improved handling of procurement processes.
- Information Sharing – Improved communication between vendors and the Companies including technology roadmaps, support and process information and general communications.
- Critical Vendor Risk Mitigations – The companies will be able to analyze and identify the most important Vendors to their business process and then take actions required to reduce potential risks.
- Standardization – Improved coordination between the Vendors and Companies with respect to the product and services being used in order to simplify the technology mix in use.
Strategic Collaborative Procurement may also be used to establish a group of vendors providing resources needed in a particular project or demand peak.