Strategic Sourcing and Procurement Cost Management in Nigerian Commercial Banks: Evidence from Zenith Bank and Access Bank Operations

This study examines strategic sourcing as a lever for procurement cost management in Nigerian commercial banks, drawing evidence from the operations of Zenith Bank and Access Bank across multiple states in the South West geopolitical zone. Commercial banks, as high-volume procurers of ICT equipment, office consumables, facility management services, and security infrastructure, face significant procurement cost pressures that directly affect operating expense ratios. Strategic sourcing, which involves category management, supplier consolidation, competitive bidding, and total cost of ownership analysis, has been linked in recent literature to measurable procurement savings in financial service organisations. Using a cross-sectional survey design supported by document analysis of procurement records, data were collected from 60 senior procurement and operational managers across six branch clusters in Lagos. The study evaluates the application of strategic sourcing tools, compliance with procurement governance standards, and achieved cost reductions across five procurement categories over a three-year period. Multiple regression analysis is used to test the relationship between sourcing strategy maturity and cost performance. Findings draw on recent corporate procurement management literature and banking sector operational frameworks. Results are expected to highlight that banks with centralised category management capabilities achieve 15 to 25 percent greater cost savings. Recommendations address bank procurement executives, the Central Bank of Nigeria's operational risk framework, and procurement advisory firms on institutionalising strategic sourcing capabilities in financial sector supply chains. Keywords: strategic sourcing, procurement cost management, commercial banks, Nigeria, category management.