Should You Outsource Your Procurement Research Reports?
Outsourcing procurement research reports can save companies time and money. But is it the right choice for you? Read here to find out.
These are uncertain times for businesses. There are rapid advancements in technology. Shifts in the global marketplace. Increased customer expectations.
All add pressure to the bottom line.
More than ever, leaders need forward-thinking and flexible strategies for staying cost competitive.
Of course, remaining cost competitive doesn’t always mean spending less. Savvy leaders know how to invest in their business. They put resources into functions with high value for profitability. And those with low risk for regulatory non-compliance. Procurement is one of those functions.
And as procurement grows in complexity, so too does its central pillar: the research report.
Should you start, stop, or continue outsourcing this critical component of procurement?
We break down various aspects of procurement research reports to help you decide.
The Evolution of Procurement Research Reports
Marketplaces have become complex. That means there are new and evolving niches and subcategories within supplier industries. The need for research is constant.
Take, for example, researching procurement of transportation products and services. There was a time when it was primarily about mode, fuel, and regional scope. Each of those components was somewhat constant, extending the lifespan of research reports.
Today, that same category involves autonomous vehicles and refined just-in-time and resource-sharing options.
Like never before, procurement research reports must include the latest information. From technology forecasts to regulatory compliance – there are many critical considerations. That’s on top of the standard components such as costs and acquisition models.
Data and information are revised and updated quickly. Continuous review of sources, industry outlooks, and marketplace trends is essential. Without them, you risk procurement research that isn’t relevant and useful.
The effect on research report? They’ve evolved into “living documents” that respond to the changing world of business.
In-house procurement teams can find it challenging to keep on top of changes. They have multiple and competing demands on their time and skills.
With outsourced reports, researchers routinely gather new and emerging information. That puts it closer to hand when it’s time to produce a report. The risk of using outdated or irrelevant information diminishes.
Procurement Reports Need Granular Categories
Technology has increased the complexity of every industry. It’s imperative to divide broad research categories. This allows for targeted and in-depth exploration.
For example, the standard “transportation products and services” category. It would be more useful divided into “distribution modality” and “field mobility”.
Other areas have also grown in scope and complexity and warrant deeper dives. Some examples are:
Creative and production services
Lighting and power supplies and services
Security and safety products and services
Telecommunication products and services
Facility maintenance products and services
Conducting relevant research and compiling the data and insights gathered takes time.
Access to data and information has never been faster and easier. Yet, the increased breadth can counteract those time savings. And, as mentioned, most source content has an ever-shortening lifespan.
Should you spend in-house or outsourced time? When deciding, consider the amount and quality of time.
As always with in-house time, it’s a sunk cost. You pay salaries no matter what activity the people perform. When staff spends time on procurement research reports, what else aren’t they doing?
Where do research reports fit into the importance and urgency of your procurement priorities? The answer can reveal if staff should spend their time on this activity.
Procurement Reports Require Expertise
There are two kinds of expertise that go into procurement research reports. Subject expertise and methodology expertise.
In-house teams are apt to have high levels of expertise in subjects that are core to your business. Also areas of frequent procurement.
For example, it’s common for a manufacturer to have strong research into equipment. But they could grapple with a learning curve about related software and automation.
Outsourcing procurement research reports ensures the necessary subject expertise is already in place. That saves time and improves the accuracy and comprehensiveness of the report.
Methodology expertise comes with experience. Many times, in-house teams produce research reports are on par with outsourced providers.
But procurement teams are often more involved with the execution aspect of procurement. They don’t have the opportunity to hone the skills, such as benchmarking. Better skills lead to higher quality procurement research reports.
In-house procurement teams have greater knowledge of how your business works. They have a close view of gaps, issues, and opportunities. That vantage point is valuable to stakeholder relations and operational effectiveness.
The downside is that they can lose objectivity. It’s human nature to gloss over the familiar and be blind to chronic issues.
In contrast, outsourced providers offer the benefit of greater objectivity and strategic sourcing.
They remain interested but apart. They’re removed from the daily demands, influences, and concerns that in-house teams face.
“Know your audience” is a well-known key to effective communication.
It also applies to procurement research reports.
An advantage of outsourcing procurement research is format flexibility. Third-party teams often have more experience creating and presenting reports to different audiences.
They usually have the capacity to produce reports that are more than text. Visual appeal helps decision-makers absorb the information.
At the same time, they can produce reports in different formats that have equal effectiveness. They’re accustomed to delivering reports in verbal as well as in written format.
Third-parties have an arms-length position from your organization. That can help them know what level of detail with resonate with each decision-maker. Outsourced procurement teams use that insight to produce reports that address everyone’s needs.
Think about past delivery of procurement research reports. Were they developed in-house? Did they ease decision-making or bog it down?
Were past experiences smooth? If so, the format and delivery of your procurement research reports are good. You can put a solid check mark under the column to start or continue in-house report development.
If format and delivery could be better, outsourced reports could be the answer.
Procurement research reports have limited value without justifiable recommendations.
Here’s a secret about procurement research reports. The person or people who source, vet, and distill the data and information aren’t always the best person or people to make recommendations.
The actual research requires diligent vendor qualification and tight focus on the subject of the report. For example, if the research is on transportation procurement, info about IT security could be a distraction.
Yet, whoever makes recommendations does need to see and understand the bigger picture. To not have it creates the risk of silos.
Silo procurement can lead to negative impacts on other parts of the business. When that happens, productivity drops. Frustration and churn increase and customer satisfaction can decline.
In many organizations, in-house staff members are well-positioned to make recommendations. They often don’t have the necessary combination of skills, experience, and big-picture view. The procurement head does. But that can also put him/her in conflict.
This isn’t a problem with the procurement of certain products and services. That is, those with low risk to key business drivers and operations.
But procurement research reports about significant product or service is a different matter. The senior leader in charge of procurement often has a seat at the decision-making table.
In that scenario, there’s greater value to the procurement leader using his/her expertise at the decision-making table. They’re in a strong position to assess and challenge recommendations made by others.
Procuring coffee products and services for staff break rooms is straightforward. Decision-makers can readily understand the components and impacts.
But what about complex products or services? They come with high costs in the form of cash, time, and change for customers and employees.
In those scenarios, the best research reports are also geared toward stakeholder education.
The report authors are well-advised to assume that the decision-makers know nothing about the subject. Without talking down, they need to offer context. They need to provide an understanding of critical components to give the reader a useful perspective.
Stakeholder education is not unheard for complex, big-ticket systems. It can happen before or during the delivery of a research report.
In-house procurement leaders often take on that task. For leaders accustomed to interacting this way with peers or more senior leaders, this can be effective.
But what if that isn’t the case? Outsourcing your procurement research reports can facilitate faster and better decision-making.
Make sure the provider is aware of knowledge or comfort gaps about the subject matter among decision-makers. This will help ensure stakeholder education is appropriate to the research report.
How many times have you seen time and energy poured into report only to have it mean nothing to the decision-making process?
If you’re like most people in business, you’ve experienced that more times than is funny.
The busyness of daily operations can make it easy forget the purpose of procurement research reports: action. Informed, risk-assessed action.
Outsourced research reports come with the drive toward action.
There’s a quirk of human nature that makes us pay more attention to reports from third-parties. It has something to do with writing a check instead of paying a salary.
But the drive to action goes beyond that. Professional procurement outsource teams help client’s set themselves up for success. They keep the end goal in focus. They make it easy to put in place small steps toward bigger outcomes.
Specialization Vs Generalization
Outsourcing procurement research reports isn’t an all-or-nothing proposition.
There are situations when general procurement skills appropriate for producing valuable research reports. That’s the strength of an in-house team. They have a mandate to keep day-to-day procurement processes running smoothly and effectively.
On larger teams, it’s possible to have people with more specialized procurement skills. Common examples are managing procurement software or policy development.
More often, there’s a lack of specialization within in-house teams. This becomes evident when you source complex systems or significantly different core supplies.
This isn’t a reflection on the team or the company as a whole. It’s a natural outcome of the way business works.
Exposure to areas that are closest to the activities that drive our business builds specialized skills.
Think about a procurement team in a hospital. You’d expect them to have specialized skills for procuring medical equipment and systems. But what about grounds-keeping services? You’d forgive them for not having that specialization because it’s not core to what they do.
Specialization is possibly the greatest advantage of outsourcing procurement research reports.
What to Look for in Outsourced Procurement Research Reports
Procurement research reports are a single component of any procurement process. Yet, the creation of quality reports demands an understanding of every aspect of procurement.
If you decide to outsource your reports, there are a few key attributes to look for in a provider.
Seek the services of third-party that specializes in every aspect of procurement.
Look for providers that can customize levels and types of support. Seek a provider that can be your partner at any point in your procurement process. Speak to a provider who has the expertise and experience to help build the capabilities of your in-house team.
Wherever you see a gap in your capacity, we can help. We have specialized skills to deliver desired outcomes and build your bench strength.
Our procurement research reports help you meet cost reduction goals and mitigate risk. We support you to gain the support of internal stakeholders and education decision-makers.
We are transparent about our process. We’re here to help you achieve your procurement goals. And that can include helping you further develop your in-house procurement processes.
Reports include benchmark pricing and supplier data. They lay out spend analysis and market analysis. They offer RFP requirements and TCO (total cost of ownership) examples.