True or False: Procurement outsourcing providers are strictly tactical resources and should not be considered as strategic partners.
The answer is False.
As procurement organizations mature, becoming more strategically aligned with business goals, so have the roles and responsibilities of these departments. Historically known as "Purchasing" Strategic Sourcing and Procurement Departments' primary role consisted of tactical purchasing tasks, including three-bid-and-buy practices to achieve the best pricing for supplies and services. However, cost savings are becoming just another metric on the long list of procurement KPIs for best-in-class companies. Strategic Sourcing and Procurement Departments are now responsible for optimizing relationships with critical suppliers, driving innovation, ensuring market competitive contract terms and conditions, leading supply chain efficiency, etc. -the list goes on and on.
Maintaining a strictly tactical approach to procurement, companies have typically relied on outsourced procurement support for recurring and time-consuming tasks. However, facing shifting roles and responsibilities, SS&P departments are no longer limited to the traditional methodologies of outsourced procurement support. There are countless ways SS&P groups can enhance their current operations while lessening the burden on their internal teams, including staff augmentation and strategic advisory.
As covered in Source One's whitepaper, Redefining Procurement Outsourcing: Looking Beyond the Limited Resources of Traditional BPOs, there are a number of options and types of firms available to support procurement's various functions. Depending on your organizational needs, firms of all shapes and sizes exist to provide contingent labor, market intelligence reports, and project staffing. With the benefits of these companies also come their shortcomings, such as limited implementation support, frequent staff turnover, and generic intelligence inapplicable to your company's shape and specific needs.
Enter the role of one-stop Procurement Services shops. Rather than work different, single-focus procurement outsourcing providers, full-service providers can deliver all the necessary market intelligence, on-demand labor, and tools, combined with flexible billing options.