7 Reasons Why Outsourcing Procurement Solutions Could Be Exactly What Your Business Needs
If you’re in a product-based business, procurement is key to your success. It’s tough to manufacture all of your own parts and materials. In some cases, it might even be impossible. Either way, finding other reliable companies to build those essential elements of your business will make things run much more smoothly.
However, coming up with an effective procurement solution can be a hassle. And procurement can quickly turn into more work than you can manage in the time you have. One solution is to hire more people. However, that’s going to cost your company money as well as time to train new employees. It’s not necessarily going to solve all your problems, either.
Just having more people won’t automatically simplify procurement. If there are issues in your procurement process you’d need to overhaul your system as well as hire additional help. And that’s going to be quite a bit of hassle for your company. Wouldn’t you rather focus on doing something else instead of worrying about whether or not your procure system is working?
To avoid difficulties associated with in-house procurement, it may be a good idea to outsource your procurement solutions. Letting another company handle your procurement system can seem odd at first. You know what your company needs and you want to stay in control of procuring the supplies essential to your business. We get that. But outsourcing procurement doesn’t necessarily mean you’re losing control and it comes with quite a few benefits. Keep reading to discover seven reasons why outsourcing can be better than do-it-yourself procurement.
1) Choose Level Of Control
When you’re looking at the possibility of outsourcing procurement, there are a couple things to consider. You can outsource all your procurement so a third-party handles the purchases for you. With this option, keep in mind that you have the option to only outsource your non-core spend and keep more sensitive procurement in-house.
Another option is to outsource your procurement management system to an online program that is easy for your in-house staff to handle. Using online procurement software lets you retain more direct control over everyday purchasing. But it’s also missing some of the advantages of outsourcing your procurement. With more direct control comes more time spent on procurement and more responsibility that falls on your employees.
If procurement is something you’d rather not have to worry about, then outsourcing is the way you’ll want to go. In this article, we’ll be focusing on the advantages of outsourcing your procurement.
2) Gain Procurement Expertise
Your company is made up of experts on the products you create and the services you provide. But you can’t have expertise in every field, especially if you’re trying to keep your expenses low. Maintaining a department that’s exclusively devoted to managing procurement just isn’t practical for every business. This is why outsourcing is an excellent idea.
Instead of trusting your procurement solutions to an amateur, you can turn them over to a real expert. A company that specializes in business process outsourcing has the experience needed to give you the best possible procurement solutions. They’ll also have the skills and resources to strategize more efficiently so your company’s procurements are as successful as possible.
3) Lower Your Costs
You know that doing procurement from within your organization can be expensive. But companies that specialize in creating procurement solutions face much smaller expenses. Instead of wasting money in-house, you could save by relying on a provider with lower overhead costs. And that lets you cut your own overhead.
In addition, you’ll also be saving money in other ways. Outsourcing procurement lowers costs because you won’t be devoting office space or IT resources to maintaining your own in-house procurement system. You’re also cutting-back in terms of headcount and training. You won’t have to hire anyone new to run procurement and you’re freeing up the employees already working for you so they can focus other tasks.
Taken together, all these cutbacks lower your transaction cost per procurement. And even if the amount saved per procurement is small, it’s going to quickly add-up to significant savings.
4) Return To Your Core Focus
Outsourcing allows your procurement solutions to be handled by purchasing experts. It will also enable the experts at your company to focus on their own specialties. They’ll no longer be distracted by tracking down the best suppliers, comparing costs, and generating purchase orders. They get to focus on value-added areas where their unique skills are used to the best advantage.
As a result of outsourcing, you will be able to provide overall better products and services to your customers. Your outsourced procurement efforts will be bringing in the elements essential to your business while freeing up your people to focus on delivering the best possible customer experience. And since you’re cutting back on costs, you’ll also get to enjoy increased profits while supplying better service.
5) Enjoy Greater Access
Procurement experts have access to databases both international and local. This means that they can help you choose from among a far greater number of suppliers. And they also have the contacts and market leverage necessary to make sure you always get the best deal on products you need for your business.
With this increased access, you will be able to ensure better quality and prices on all of your procurements than you could achieve on your own. You’ll have a whole team of procurement experts working for you giving you access to the best possible opportunities. And you’ll get all that without having to set-up a separate department inside your own company.
6) Adapt To Change More Quickly
Being able to adapt to change quickly is a decided advantage in today’s business world. But it’s hard to do in procurement if you’re using a manual, in-house system. Setting up an agile procurement system using an automated software solution is one option. But it’ll still require quite a bit of time from your employees to keep on top of things.
Outsourcing will give you the advantages of agile procurement without the extra in-house work. Agile procurement responds quickly to supply availability and changing prices. And it’s one of the big advantages you should be looking for when implementing a new procurement solution.
When you outsource procurement, you’re hiring a team to keep track of these things for your business. They’ll be on top of catching price reductions and making sure you’re not stuck without needed supplies if one of your suppliers runs out.
7) Streamline Productivity
When you outsource your procurement solution, all the advantages that we just talked about are going to help streamline your productivity. Outsourcing lets your employees focus on using their strengths by skipping over dealing with purchasing. That streamlines their workflow as well as company operations.
In addition, the expertise and adaptability of the procurement experts you hire allows for increased productivity and efficiency. Procurement experts can move things along more smoothly than most in-house departments could. They have a decided advantage in terms of access to information and expertise. In short, things are simply going to run more smoothly when you don’t have to worry about managing procurement.
It’s true that there are a few risks associated with outsourcing procurement. But you can avoid most downsides by choosing a reliable provider that you’ll outsource procurement to. It’s important to thoroughly vet the company you’re going to work with and make sure you retain a reliable outsourcer that stands behind their procurement solutions. You want someone who’s going to help you make sure your new procurement solution benefits your company, not harms it.
NextProcess is the sort of company you can rely on. Our customer’s satisfaction and security are our highest concerns. We aim to make sure that when you choose to outsource your procurement solutions with us, it will mean increased success for your company. And we’re with you every step of the way making sure your procurement solution delivers all the benefits you’re looking for. Contact NextProcess today for more information on outsourcing your procurement solutions!