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Go4customer Blog

Procurement Outsourcing Strategy For Greater Competitiveness

Procurement-Outsourcing-Strategy

In the quest of achieving greater business value, organizations across the globe are shifting their focus to business process outsourcing services. This will facilitate enterprises to streamline their non-core functions as well as maximize operational performance. Procurement outsourcing is one such domain that has established itself overtime as a key driver for cutting –down costs while optimizing sales and revenue.

Moreover, chief procurement officers of most of the organizations worldwide are increasingly shifting their focus towards call center units located in India to enable them deliver greater business benefits.

Let’s dig deeper to understand how procurement outsourcing is helping all size businesses to take their procurement strategy to the next level

By availing procurement outsourcing services from a reliable service provider, companies can transfer their core procurement activities related to supplier and sourcing management to a third party vendor. This, in turn, enables them in reducing their overall costs while facilitating them to allocate their limited resources in core activities and functions.  Vendor management and procurement categorization are the two most popular activities in this regard.

Call centers in India mainly split procurement outsourcing functions into two parts – direct and indirect procurement. Direct procurement outsourcing includes all supplies that are directly bought by the enterprises during the production process. On the contrary, indirect procurement includes goods and services, which are purchased by a firm to initiate its various activities like marketing, information technology, human resource, utilities, and facilities management.

According to a survey conducted by a business intelligence firm, the Aberdeen Group, companies availing procurement outsourcing were able to achieve superior performance and better credit procurement. Furthermore, they were able to realize 8.3% savings from strategic and operational outsourcing, attain 30% reduction in the overall costs, and meet 55% compliance rates. The study further indicated that organizations capitalizing on procurement outsourcing are likely to have more streamlined operations due to centralized procurement executed across the entire organization.

Other benefits include achieving and sustaining better business focus, developing wide access to important information to generate business insights, extending-out reach via internal and external communication strategies, developing better relationships with suppliers, as well as distinguishing and leveraging innovative strategies to gain competitor insights.

Thus, procurement outsourcing in the current business scenario is acting as a game changer. It is for this reason, it has become inevitable for the chief procurement officers to follow this outsourcing path and generate greater value for their business. 

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