In a highly competitive global economy, with multiple services and businesses springing up, an increasing number of corporations are regarding the benefits of business processing outsourcing. More often than not, the idea of cutting expenses is considered first. However, in the age of educated and informed consumers, enterprises should consider social cognizance and sustainability to be a part of the equation.
Adopting technology remains a popular trend
Supply Management referenced a study conducted by Gartner, which showed that the global market for procurement services software grew 7.3 percent in 2013, standing at $8.9 billion in 2013. Chad Eschinger, research vice president at the company, claimed this burgeoning investment is likely the result of shifting business priorities and increased connectivity. For example, before partnering with a supplier, corporations are choosing to compare and contrast numerous options in order to find out which companies can indirectly boost customer satisfaction rates.
On a practical note, Eschinger maintained that logistics managers "kept their priority," even though IT budget professionals remained wary of investing in new technology. Though financial concerns loomed, executives were enchanted by the potential corporate cost reduction they could encounter as a result of installing the technology.
"Both influences have impacted strategic planning processes and have resulted in strong price-based competition and smaller contracts," said Eschinger, as quoted by the source. "Cloud and subscription-based pricing is shifting revenue streams and influencing growth.
Making a different approach
However, some professionals would suggest that this expense-obsessed culture may detrimentally affect a company's bottom line. Rene Carayol, a contributor to Business Reporter, claimed that investment in automation and technology such as supplier relationship management can lead to error reduction, as well as a more versatile, faster operation. Eliminating repetitive processes and tedious, mind-numbing tasks will lead to a healthy workforce, in turn creating a more productive environment.
In addition, Carayol recommended that enterprises integrate analysis programs with their procurement process software in order to figure out how certain decisions affect outcomes. For example, say a corporate coffee shop wanted to consider sourcing from a fair trade bean plantation located in Mexico. A predictive analytics tool would factor in shipping laws, consumer opinion regarding the shift and where transportation routes will be forced to change. Will operations be harder for employees to execute? Will this move attract new business? All of these questions can be answered through predictive analysis.
Enterprise optimization isn't about merely cutting costs, but improving and solidifying the business as a whole.