Yet our analysis suggests potential savings of 7-12% are currently being missed. There are many reasons why external spend remains higher than necessary. Not the least is that almost every construction project is unique. This makes procurement highly fragmented and predominantly local in nature, in contrast to the situation in most other industries. There are nonetheless ways to capture substantial savings by spending smarter.
External spend typically represents 50-70% of revenues in the construction industry. It comes as no surprise that the industry in consequence ensures that it is focused on buying cheaper.