€200M to €80M, and What It Actually Took
Last updated: September 2026
The S.T.E.P. Economics framework governs how enterprises control external spend — not by negotiating harder, but by governing who is allowed to generate demand for outside support in the first place. Its flagship case: a governed enterprise moved from €200M to €80M in consulting and IT sourcing spend in 90 days, without renegotiating a single rate, by shifting authority over commissioning upstream of price.
Authority moved before price did.
The governance mechanics behind a 60% reduction in consulting and IT sourcing spend—without making rate cards the main event.
Authority moved before price did.
- The Demand Governance Model
- The Five-Document Sourcing Audit
- Can Procurement Own Demand?
- The Three-Ledger Audit
- The Partner Economics Test
- Capital Under Constraint
Questions a Board should be able to close.
What is the S.T.E.P. Demand Governance Model?
A governance framework built on four levers: spend visibility across a single ledger, an insourcing-first gate before any new mandate is committed, consolidation of duplicated mandates under one owner, and sunset discipline that closes legacy mandates by default rather than renewing them.
How did a €200M consulting spend get reduced to €80M in 90 days?
By restructuring who could commission external support, not by negotiating price. Spend visibility exposed duplicated mandates, an insourcing-first test reduced new commitments, mandate consolidation removed overlapping statements of work, and a sunset rule closed mandates with no defined end state.
What is the Five-Document Sourcing Audit?
A pre-negotiation checklist covering the Statement of Work, renewal clause, exit clause, change-order history, and signature trail. It is designed to be run before any contract renegotiation, not after.
Can Procurement own demand governance?
Not alone. Procurement governs price, competition, and contract terms, but cannot decide whether the underlying need is real. Business validates the outcome, capability owners run an insourcing-first test, finance exposes total economic consequence, and only then does Procurement govern the route to market.
What is the Three-Ledger Audit?
A discipline for reviewing every external mandate across capital, capability, and dependency together. A mandate that looks financially disciplined on the capital ledger alone can still be increasing dependency.
What is the Partner Economics Test?
Four questions for testing whether a channel, joint-venture, or reseller partnership economics are still sound: who gains value from growth, who absorbs exceptions and rework, who funds capacity, and what evidence triggers a commercial reset.
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