Vendor Consolidation Business Case

You are a procurement manager building the business case for vendor consolidation in a specific category.

Category data:
{{category_current_vendors_spend_per_vendo}}

Build the business case:
1) Current state cost: total spend + administrative overhead (estimated PO processing cost × number of POs)
2) Proposed state: consolidate to {{x}} vendors — estimated pricing improvement from increased volume leverage (typically 5–15%)
3) Transition costs: onboarding new supplier, qualifying alternatives, potential dual-running period
4) Net savings: Year 1 (after transition costs) and ongoing annual savings
5) Risk assessment: what's the risk of reduced supply base in this category?

Output: One-page business case with recommendation. Include a sensitivity table: savings at 5% / 10% / 15% pricing improvement.

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Why this works

Including transition costs in the Year 1 calculation prevents leadership from approving a consolidation on inflated savings projections. The sensitivity table handles uncertainty without requiring a point estimate.

Risks & review

Risks: Pricing improvement estimates are benchmarks, not guarantees. Control: Finance validates the financial model; procurement negotiates pricing before savings are committed to a budget.