McKesson: Spend Management cuts software costs by 15%

McKesson's plan to significantly optimize its software spend and make its financial planning more transparent and efficient paid off: Thanks to the strategic consulting and services provided by TIMETOACT's spend management team, the company achieved savings of 15% with one of the largest software manufacturers and at the same time reduced the allocated risks by 89%.

A powerful spend management system is critical for a global healthcare player like McKesson because it monitors and optimizes a company's spend by capturing, analyzing and managing procurement data to ensure cost efficiency, budget control and resource optimization. It also ensures compliance with regulatory requirements and creates transparency to minimize risk and avoid unplanned costs.

Spend management, as offered by TIMETOACT with its holistic approach, examines and analyzes supplier relationships in order to strengthen the company's negotiating position. It creates scope in the budget and thus promotes investment in research and development. It also supports sustainable procurement and social responsibility. This in turn has a positive effect on the company's image. Overall, it improves the competitive position through more efficient use of resources and faster responsiveness to market changes. Sufficient reasons for McKesson to rely on TIMETOACT's many years of expertise as a trusted advisor for spend management.

“As a leading global pharmaceutical wholesaler, McKesson was faced with the challenge of reviewing and optimizing its software contracts with a leading manufacturer of database products following structural changes to the company. TIMETOACT GROUP's strategy consulting aimed to achieve cost transparency for software purchases and their follow-up costs in a holistic manner. This showed us considerable savings potential, which we were able to address directly in the project,” says Ronald Mittermeier, Corporate Director SVP Indirect Procurement at McKesson Europe SE.

A particularly careful risk assessment was carried out with regard to possible license violations and previous compliance with general contractual obligations. In detail, internal processes were also modernized and potential improvements for the future were identified.

TIMETOACT's team of experts used a holistic and data-based approach to analyze the systems on which the software was in use and their connections to other systems. For example, SAP and McKesson's own healthcare solutions, which interact with interfaces to the manufacturer's database products, were examined. In addition, they conducted numerous interviews with various departments and stakeholders on a global level to determine the future use of the software. Based on this comprehensive data, a detailed negotiation strategy was developed.

Thanks to TIMETOACT's strategic consulting and services, McKesson can plan and manage its spending more efficiently. Improved transparency in the spending processes helps McKesson to identify potential risks and irregularities and to initiate countermeasures in good time.

Overall, the company has managed to save 15% of its annual software costs and reduce its budget by 25% through harmonized contract frameworks. In addition, 89% of allocated risks were mitigated, unplanned CapEx avoided and audit risks minimized through improved governance and contract management.

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