Outsourcing the procurement of goods, services, suppliers and materials can generate major benefits for businesses of all types and sizes. Procurement outsourcing is growing, companies are becoming more aware of the benefits, the outcomes have been documented and substantiated, and these results are helping company bottom lines.
Main Benefits of Outsourcing
Procurement outsourcing is the transfer of specified key procurement activities relating to sourcing and supplier management to a third party. Businesses will sometimes do this to reduce costs or, often in the case of procurement, to add specialist skill sets to their procurement department.
Outsourced procurement significantly reduces efforts of staff who will ultimately have to oversee and assess all the intricacies within the procurement. It takes all of the burdens off their shoulders by putting a lot of the hard work into the hands of experts who specialise in this.
Why Companies are Outsourcing Procurement
Procurement is becoming increasingly seen as a process comparable to legal or IT functions in that it is better to leave it to an external party with specific expertise. Procurement outsourcing is allowing more companies to become more competitive while giving them more room and resources to focus on core business activities like growing their brand and acquiring new customers.
In many other cases, however, outsourcing procurement is more comparable to outsourcing aspects of a certain function such as HR in order to reduce operating costs and improve existing systems and processes. For example, a third party will conduct the research, analysis and comparison stages before someone internal at the company makes the final decisions on which products or suppliers to use.
How to Implement Outsourced Procurement
Implementing outsourced procurement will depend on both the size of the company and how extensive the outsourcing programme is. Large businesses with long-existing systems and processes in place looking to overhaul their procurement functions can usually expect a longer implementation period. Businesses may introduce outsourcing slowly over a sustained period of time, testing aspects of the model bit-by-bit rather than undergoing a vast transformation programme in one go.
The process may be faster for a smaller and/or newer company due to less complexities. Regardless of the type and size of the business, the right partner will have the expertise to ensure implementation is smooth, efficient and provides good value to your company.
Procurement Services by CostSmart
At CostSmart, we do the cost analysis and comparisons of various providers and suppliers for you. We can generate all of the comparisons on what these businesses offer, their main offerings, how they differentiate, what their value propositions are and their comparative price-points all to help you find the right fit.
We ultimately act as an intermediary agent, helping to streamline the entire process of researching different suppliers, generating quotes from various suppliers, comparing all the data between suppliers and making the decision on which supplier your business should ultimately choose. To find out more about how we can help please get in touch today.