Daily Archives: March 7, 2007

Clarity with Claro

When I was in Chicago, I had the chance to sit down with Bart Richards, a Principle of The Claro Group, and talk about their consulting practice and their sourcing practice in particular. Although the Claro group is relatively new, being in existence for less than two years, it’s team, made up of a large number of ex-Arthur Anderson and Bearing Point consultants, has been in the business for a long time and have saved $2.2 Billion dollars in sourcing and procurement spend (on roughly $17 Billion in spend), which is nothing to scoff at. (They’ve also recovered over $4 billion in insurance settlements, but that’s not the focus of this post, or blog.) They’ve also serviced over 100 organizations to date and delivered tangible bottom-line results at each.

Before I get into their sourcing practice, I would like to note that The Claro Group is an interesting firm with three primary areas of practice: Sourcing and Procurement, Healthcare, and Insurance Management Services – making them a prime consideration for large hospitals, GPOs, and other HealthCare Providers as they can help these organizations across the board. This is a very interesting position considering the relative lack of vendors and consultants in the sourcing and procurement space with this focus. Besides VendorMate and CombineNet, I have not yet identified any other solution providers with such a strong understanding of the space. (So, if you know of, or work for, any other providers with a strong sourcing or procurement capability in the healthcare space, please feel free to reach out to me at thedoctor<AT>sourcinginnovation<DOT>.com.)

Back to their sourcing practice. I could bore you with details on their methodology, practice, etc., but this time I’d like to stick to my impression of Bart. All I can say is that if all of their consultants are like him, then they truly are client focused and willing to do whatever it takes to help you save money and improve productivity. Although they do use vendor tools to help them, they don’t insist upon or sell any specific vendor tools and instead focus on the analysis, processes, and methodologies that they believe, based upon their extensive experience (with each team member having an average of 12 or more years of experience in sourcing and procurement), will lead to tangible, measurable, and meaningful value to clients. And in this regards, the numbers don’t lie. They’ve saved, on average 12.5%, across all of the projects they worked on, which is quite significant, especially considering this is the most you can hope to save, on average, if you implement advanced sourcing methodologies in house (as per Aberdeen’s recent Advanced Sourcing and Negotiation Benchmark Report).

Their process is a simple and to-the-point three-phased approach that they use to rapidly identify opportunities. They start with an assessment where they review your process, organization, technology, and historical data to determine your opportunities, estimate the required effort, and compose a timeline. They then execute the recommendations that result from the first phase by revising organizational and process design, implementing new technology, and managing the change to capture the identified savings opportunities. Finally, they measure the impact, report on compliance, and implement Supplier Relationship Management. Simple, but effective.