Yesterday’s presentation by Heinz VP of Procurement Christopher Stockwell (replay & blog post) on why it’s a good time to target savings on indirect spend set the stage for this morning’s breakout session - Indirect Spend: What to Source Now. In the session, Diana Brown, a Director in Ariba’s Spend Management Services group, walked through the quick wins, strategies and savings potential in three categories:

• Marketing - This department is notorious for two things; spending their entire budget (or more) AND resisting anyone’s interference in creative decisions. But Diana says you can make headway in marketing spend and gain the department’s support by deferring on creative decisions, building an objective scorecard process, and playing “the bad guy” in negotiations with suppliers. She also advises getting some quick wins with less creative by categories like promotional materials. (In another session yesterday, a presenter advised reinvesting savings back into the department you are working with and I am sure marketing would be very receptive to this idea).
• Legal - Diana laid out why now is the right time to attack this sacred cow. And echoing Nick Cherrone’s recent series on legal spend, Diana stressed the importance of shifting away from the billable hour and towards a model where you’re paying for results. Like Nick, she also urged using the right strategies for specific legal categories.
• Travel Costs - Citing a savings opportunity of 7-11% for a category that typically consumes ~3% of company revenues, Diana advised attendees to target three travel categories; agency services, hotels, and meetings management. Updating policies, monitoring compliance and rolling out an effective change management program for travel can also greatly increase the chances for success.

There are more indirect spend sessions on tap today. And if you want more details on Diana’s strategies for the categories above, check out the replay (you’ll need to register here if you haven’t already).

Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.