| What is professional procurement? | | | | required to build an internal team. Instead, you get |
| In recent years professional procurement has become | | | | instant results from leading professionals. Similarly, if |
| an increasingly imperative aspect of conducting | | | | you need a team to do procurement on a highly |
| business. In short, professional procurement is all about | | | | specialised project that requires particular expertise, |
| the movement of resources through a company (most | | | | outsourcing can be the most cost-effective solution. |
| commonly between supplier and consumer), including | | | | So what are the benefits of outsourcing professional |
| but not limited to goods, information, people, and other | | | | procurement? |
| services. Procurement between a supplier and | | | | What a lot of people often do not realise when it |
| corporate which flows to a corporates client is | | | | comes to procurement strategy is the high level of |
| referred to as direct procurement and often | | | | communication skills that are required. People who |
| corporates invest a load of resources and time to | | | | work in procurement must be able to liaise with both |
| manage the value of this supply. This is often | | | | buyers and sellers and have a detailed understanding |
| considered critical to a business hence there's | | | | of what each needs, wants and is willing to do in order |
| considerable reluctance to outsource this function. | | | | to achieve an outcomes that suits everybody. |
| What about indirect procurement, where organisations | | | | As you would know well, keeping everyone happy |
| purchase goods and services to support the running of | | | | when doing business, particularly between two or |
| their business. Is it considered critical and do | | | | more different companies, is never easy. Procurement |
| organisations have the expertise to achieve savings | | | | service providers are not only experts in the ins and |
| and supply efficiencies that they entitled to. | | | | outs of their trade, but in communicating with people |
| While in the past it used to be a relatively minor | | | | who are experts in the ins and outs of their own |
| consideration in the average overall business scheme, | | | | trades. |
| today it is a main business discipline of an | | | | When you outsource parts or all of your procurement |
| organisation's finance, operations and shared | | | | services you get access to people with established |
| services department, and plays a much superior | | | | relationships with other suppliers and businesses. |
| part in overall business outcomes. Organisations | | | | Further having a professional procurement strategy |
| invest in specialists and extensive training their | | | | can ensure the supply chain in your business provides |
| procurement professionals to manage their indirect | | | | you with best management practices suitable to your |
| procurement. Other organisations however choose | | | | business, accelerated spend savings opportunity and |
| to outsource parts or all their indirect procurement to | | | | more secure supply,, both now and in the future. |
| procurement service providers. So it becomes a | | | | Contract Management and the managing of supplier |
| balance of resource availability, devoted time and | | | | arrangements is often improved, delivering optimal |
| expert market knowledge. Does it exist in house or | | | | supplier service delivery and improved administration |
| can it be acquired externally? | | | | and fulfilment efficiencies. |
| What are procurement service providers? | | | | Hence when your contracts managed and supported |
| Procurement service providers, or PSP's, are | | | | upon by a solid Supplier Relationship Management |
| consulting companies that can be be engaged to | | | | model you are assured that the agreed services and |
| assist in the managing of your indirect procurement | | | | or goods will be provided at the cost and time outlined |
| needs. Procurement service providers usually keep | | | | within the contract, enhancing your reputation with your |
| their focus on strategic inputs or recommendations, in | | | | internal/ external client and suppliers alike . |
| order for you to make the decisions that will have the | | | | Is professional procurement outsourcing right for my |
| best results for your business. | | | | business? |
| There are consulting companies that offer | | | | Before you commence any outsource activities for |
| procurement services alongside other services, such | | | | your indirect procurement s, it is important to consider |
| as spend analysis or opportunity assessments, and | | | | whether or not it will be the best solution for your |
| there are others that concentrate of procurement | | | | business. Whether you are just starting out and |
| managed services exclusively. Those that deal with | | | | finding your feet or you have a highly established |
| procurement exclusively are more often than not | | | | business, outsourcing your indirect procurement and |
| leaders in the field and have the highest trained | | | | associated disciplines can be cost effective and cost |
| experts, that know the ins and outs of a range of | | | | savings and operational efficiencies can be achieved. |
| different suppliers and businesses. | | | | Outsourcing of any organisations indirect procurement |
| The cost/ benefit of procurement outsourcing is | | | | can prove highly beneficial. Due consideration |
| dependent on your procurement profile and maturity | | | | needs to be given so that organisations are able to |
| and of the expertise of the outsource company you | | | | fully understand which outsource solution and strategy |
| choose to consult with; how they cost out and what | | | | is best of their business.. |
| value they add to your overall procurement and cost | | | | Final comments: |
| management proposal. What is the difference | | | | Regardless of one's organisation's size or position in a |
| between internal procurement teams and outsourcing | | | | it's competitive market, one should also consider |
| to procurement services? | | | | the performance of their procurement both direct |
| There are a few key differences between internal | | | | and indirect. The effective management of a |
| and external procurement teams, not the least of | | | | procurement overall delivers value to a business but |
| which is ready access to experts in the field that you | | | | also achieve considerable cost savings and superior |
| get when you outsource partners. The kind of | | | | supply performance. |
| experience that takes new employees months or | | | | Finding the required resources, time and market |
| even years to gain is immediately at your fingertips | | | | intelligence is often a challenge to most organisations, |
| with procurement outsourcing. You are also getting a | | | | hence the outsourcing of their procurement becomes |
| team that already works well together – has | | | | an imperative decision. |
| established process and methodologies, enhanced | | | | At the end of the day the decision makers must ask |
| supplier relationships and market/ industry know how | | | | – how can I achieve the cost savings I'm entitled to |
| and expertise to provide point of difference. | | | | and how can I Free my critical resources to spend |
| When your procurement strategy includes outsourcing, | | | | their time on my core business. |
| you do not have to spend the time and money | | | | |