10 March 2010 | Jake Kanter
Some of the biggest companies in the United Arab Emirates are failing to take advantage of strategic procurement, and missing out on savings.
Businesses in the region are not using their purchasing power and do not have the data to reveal where and how money is spent. Improved buying could deliver total savings of around 3.5 billion dirham (£0.63 billion), according to research by consultancy AT Kearney.
“We see a significant lack of transparency in the procurement arena,” said Frank Thewihsen, vice-president, AT Kearney Middle East. “You find very few conglomerates with an empowered cross-organisational procurement function seeking to optimise purchasing across all entities.”
Utilities, banks and telecoms companies – among others – could shave up to 15 per cent off their annual spend by overhauling processes, the consultancy said.
The study recommended firms aggregate volume, improve demand management and supplier relationship management, as well as provide training for buyers.
“At a time when conglomerates and large enterprises are looking to optimise budgets, strategic purchasing can lead to significant savings,” the report added.