Update on Procurement Trends

October 22nd, 2012

Procurement outsourcing is changing the way many businesses do business. By definition, it is the transfer of procurement activities to a third party. The goal of this method is to reduce costs and perhaps improve the company’s focus on the core values it has. Is this a good thing? Is it something that you should be doing within your organization?

What About Your Supplier Relationship?

In a survey called GEP Value Trends: Procurement Outsourcing, the organization states that a majority of procurement teams would rather hold onto their supplier relationships. This number is as high as 70 percent. On the other hand, about half are looking to outsource the procure-to-pay operations they have. The report outlines what the goals and guidelines are of mid-sized to large companies in North America and Europe. Across the board, it seems, procurement outsourcing is becoming more accepted as a solution to common concerns.

How do we know there’s an increase in interest in such methods? In short, there are more companies using outsourced procurement services now than there were just a few years ago. This indicates a growth in the industry and that it is moving forward as becoming a valuable component.

What’s behind the demand? Why are more companies taking a closer look at procurement outsourcing?

  • For some, the need is to improve sourcing. They simply need better sources.
  • Many companies are looking to adopt best practice processes and this is one way for them to do just that.
  • Some are interested because of the expanding subject matter expertise that is becoming available in the field.
  • For others, improving capacity is also bringing more interest to companies.
  • Finally, the improved capabilities of these organizations is making it a better decision.

What About the Costs?

In every industry, costs matter and this one is no different. The key factor here is to show value in the investment in such outsourcing tools. They difference here is that companies can simply buy the services they need rather than invest in the development of them. That saves money over the long term anyway.

When it comes to procurement outsourcing, the bottom line is a big factor. However, improved sources, better competence levels and improved overall function are making it easier for businesses to consider the benefits of outsourcing. This could mean a big change for your organization, too. Don’t overlook the value in using such services to achieve your own, in-house goals. Many companies are embracing this opportunity.

In Texas, Stark Talent is leading the way for companies who are looking to augment their current staffing management with strategic outsource procurement. To learn more about hiring a contingent workforce, get in touch with Stark Talent today.