Lhotse — Our Take on Tactical Procurement

by Henning Hatje18.08.2021

Lhotse, reaching an elevation of 8,516 meters, is the fourth highest mountain on planet Earth.

It sits right next to Mt. Everest and for this reason, you have likely never heard of it. Attention is focused on the highest mountain on Earth entirely neglecting its smaller sibling, Lhotse. The same holds true for tactical spend.

Across companies of all sizes, focus lies on the 80 % of spend considered to be strategic. The final 20 % of ‘tactical spend’ is overlooked and remains largely unoptimised.

At Lhotse, we want to change that.

Procurement is thirsty for a change

Long gone are the days when companies had ample resources to ensure all operations are working at full tilt. Management makes hundreds of decisions every week of where and how to most effectively allocate scarce resources. This is felt most acutely in departments that have long been considered ‘support functions’.

Procurement is thirsty for a change. Pre-2000s processes were manual- via pen, paper, and phone (fax, anyone?). The early 2000s saw processes being transcribed (digitalized) but not fundamentally challenged or indeed changed. In recent years, procurement is starting to shift from being seen as an internal support function to becoming more and more strategic. This is a near reproduction of what we saw with the Finance, HR, Compliance and IT functions. Covid-19 and climate change have accelerated this shift.

To sustain and drive this shift, innovative technological solutions are needed. Software will enable procurement to unleash its potential of becoming one of the biggest internal drivers of value. Value in terms of bottom line but also in other dimensions, incl. supply chain resilience and ESG (and in ESG, there is not just E, but also S and G). At Lhotse, we have a strong conviction that procurement will only achieve its potential with the help of a new generation of modern, verticalised software.

Tactical procurement remains overlooked and opportunities are being missed

While the shift in procurement towards becoming more strategic is evident, it is also clear that tactical, non-strategic spend remains overlooked. It's clear: the lack of internal resources and attention means companies focus on the big buckets.

However, tackling tactical spend is a key driver for Procurement to push bottom line profitability. At Lhotse, we are building the foundation for autonomous tactical procurement — unleashed from the processes, structures and tools companies are stuck with today. We take “lack of resources” out of the equation. Procurement software has rarely been a driver of competitive advantage — we are convinced it can be exactly that!

Plug and play solution that brings tactical spend under control

At Lhotse, we are building a powerful plug and play Procurement Software-as-a-Service (SaaS) that manages tactical spend in the most holistic way. Users are top-of-mind and we provide ROI almost instantly. Acting as a system of procurement intelligence, Lhotse enables true automation and collaboration — within and across company boarders. Lhotse embeds data and recommendations right into our customers’ operative sourcing processes, avoiding system breaks and minimising touch points wherever possible.

Our vision is to break down those (artificial) borders within and between companies. Instead, we build an inter-company layer for truly collaborative, intelligent procurement software.

Find inspiration for your organisation

If you feel that your Procurement technology agenda resembles a blue ocean, we would love to have a conversation with you. We are interested in understanding the needs of your company and share our best practices on how to get started with bringing next generation procurement software to (your) life.

If you would like to get in contact with our experts, make sure to book a call with us:

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