Outsourcing procurement
27 March 2007 | Steve Bagshaw
When I’m out of the office meeting buyers one theme always comes up; outsourcing procurement. Should we do it? And if so, how much? There are some strong views on the topic –including that it brings better use of time, but can drain skills – but certainly no consensus.
I am very interested in your views. Have you done it? Did it work? Any horror stories or unintended benefits?
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Decisions on the outsourcing of Procurement in my view are complex and require careful evaluation.
Far too many people simply focus on either the cost of the service or the cash it delivers rather than the selection of the right categories to outsource, the risks, partner selection, service level agreements, organisational impacts, and ease of re-insourcing.
I have seen many examples of good outsourced purchasing, and sadly I have seen even more disasters. The latter are almost always created by taking a thoughtless broad brush approach, overly focused on cash benefits.