Do you want your business to reach its highest potential? Business insights drive value to your organization, and helps to design procurement strategies that have a lasting impact.
Every business is unique, but fresh ideas from seasoned professionals in procurement help to reduce costs, mitigate risk, and increase collaboration among key stakeholders.
What’s the Problem with Internal Procurement?
Procurement has most often been a police force for policy, but corporate leaders are positioning procurement to become a resource within the organization that contributes to the bottom-line.
Consulting can help to provide that roadmap for change.
Procurement is responsible for enablement across the organization, but each department has unique needs to meet their objectives. This stretches internal teams thin to meet demands in a cost-effective way. Procurement consulting helps to increase in collaboration throughout the enterprise.
Performance comes down to improving the bottom line. But how can a procurement consultant deliver success across the enterprise?
The following ten examples show how procurement consulting drives business value today. These tested applications help departments cut costs while adopting better resources. They help these departments meet corporate performance metrics essential to their growth.
In some instances, we will frame the discussion around marketing and IT teams as the relate to procurement processes. Marketing and IT need dozens of capabilities and collaborate on complex projects.
1. Outsource Acquisition of Unique Departmental Capabilities
Procurement organizations won’t always find the resources they need in-house. For example, procurement teams may not manage all the buying themselves. Complex tasks like strategic sourcing of professional services may not be possible. Procurement consulting helps with that.
Many departments can not meet their requirements with internal resources. There is simply not enough time or money to meet the objectives of the business itself. Procurement consulting can help to achieve those objectives at a fraction of the cost of performing them in-house. Some of the greatest challenges for procurement teams and related departments include:
Lack of training and human resources
Losing time before hitting KPIs
Inability to recreate positive outcomes
Inaccurate knowledge or specifications
Procurement consultants align companies’ success with their key line of business. They can find the most cost-effective resources to meet their specific business goals. Procurement consulting is available on an ad-hoc basis ensuring a return on investment.
For example, companies have different needs depending on their maturity in spend management. Smaller firms may need to focus on savings and efficiency. Larger firms may face greater challenges with compliance and meeting corporate requirements. Procurement consulting offers insights and often finds the most efficient way to meet a organization’s demands.
Procurement consultants allow internal procurement teams to remove excessive approval processes. They can depend on consultants to provide compliant resources. Procurement consulting improves internal efficiencies and deploying capabilities for specific initiatives.
Procurement teams must understand how each department responds to their practices. They must adapt their buying processes according to those needs. Procurement consulting offers insight into the organization holistically.
The right data can empower procurement teams to make smart buying decisions. They need advanced analytical systems to process transaction data, and procurement consulting can help set them in the right direction. Procurement consulting helps your organization understand specific technology needs for your department.
Teams can take advantage of procurement consulting for objective research and process analysis. Consultants help develop integration processes that drive business value.
This provides two key benefits to internal procurement teams:
External analytical processes provide specialized analytics on a department-by-department basis
Internal teams can hire generalists instead of specialists to manage external analytical processes
Procurement teams might find an urgent opportunity that can deliver on key KPIs. They might need a unique resource to achieve those goals. Internal procurement teams can’t pivot in time to deliver.
Procurement consulting helps them meet these needs. It is their business to scale out resources in a timely and productive way. They offer more opportunities to marketers as these needs arise.
In this way, internal teams can do more with less. They can become arbiters of data that drives business value in many departments. They can scale up and scale down external analytics as well.
Scaling internal capabilities is a long and costly process. That’s because firms must invest in more resources to meet new market demands. Those demands might change or disappear in the future as well. Procurement consulting allows your organization to remain nimble.
According to Forbes, “By employing a higher percentage of contingent workers, companies improve their ability to scale up or down quickly, in line with seasonal changes and shifting economic trends.” Procurement consulting gives you more flexibility when working with changes in your organization.
Most top executives continue to look at procurement for cost control. Procurement teams and departments need to scale-up or scale-down capabilities. Procurement consulting and outsourcing deliver on both of these objectives.
4. Adopt Vendor Neutrality in All Departments
Internal teams may have vendor preferences from years of using their services. This can apply to both corporate and procurement entities. Procurement consulting offers an objective perspective off the market.
According to Gartner, “Vendor-neutral specifications encourage the development of competing yet compatible implementations, freeing the purchaser to choose from a multitude of vendors without suffering a loss of functionality.”
Firms that commit to vendors may be missing out on cost savings and greater capabilities. But it’s difficult to break habits with internal resources alone. Procurement consulting offers new ideas and fresh insights.
Procurement consulting provides opportunities for greater discovery. Consultants investigate these opportunities to deliver the greatest business value for clients. This applies even against internal and interdepartmental resistance.
Removing vendor preferences adds scalability opportunities as well. Procurement consulting helps an organization remove previous bias that may be holding the business back.
For example, firms that get new business may need to add to their supply chain. Third-party qualification and management providers bypass internal hang-ups. Procurement consulting helps to mitigate cultural road-blocks and supplier preferences that may be costing a company money. Procurement consulting allows the business to launch programs in a more cost-effective way.
Compliance affects companies at both the regulatory and market level. Procurement teams may be responsible for targeting several regional markets. They must be compliant with each of them.
Policy in place my slow down acquisition processes for procurement teams. Many of these policies become outdated and add to inefficiencies.
Procurement consulting allows teams to transfer policy responsibilities to external teams. They can focus on business value and enablement instead.
Internal teams and procurement consulting firms can outsource capabilities in a compliant way. Internal teams need only adhere to policies associated with the partnership.
The consultant’s processes should meet internal policy criteria. Then they can transfer policy and regulatory requirements to the consultant. This frees up opportunities to focus on business value.
Procurement teams most often partner with vendors to get equipment, resources, and capabilities. Procurement teams are outsourcing entire business processes as well.
Analytics is a complex process that requires time and resources. Companies can choose to outsource this entire process. They need only enjoy the resulting insights.
Procurement consulting provides capabilities for outsourcing these business processes. This removes the greater responsibility from internal teams.
This is a great resource for internal teams. BPO frees the company of entire business functions in a cost-effective way. It also adds capabilities that would be unachievable in house.
Here are some business processes procurement consulting firms help companies outsource:
Finance and accounting
“This is a wider trend in outsourcing as a whole,” says Ed Thomas, analyst for Ovum Research. “Cost reductions are the table stakes, and companies want to know what else their outsourcers can do to make their processes and technology run more efficiently.”
Procurement finds more problems scaling in their supply chains. Supplier acquisition and qualification processes are costly and time consuming. Shortcomings in the qualification process can prevent serious risks.
Some frequent complications procurement teams encounter when managing supply chain vendors are:
Poorly defined standards
Contractor or supplier refusal
Lack of leadership commitment
Failure to understand internal stakeholder risk
Procurement consulting offers new benefits in risk management. This trend has grown facing natural disasters that lead to supply-chain disruptions. Sustainability now comes into question.
Consultants help firms identify and control risk. They help them drive the greatest value for their bottom lines. They help internal teams evangelize new programs to internal teams as well.
Software was once managed across an organization by a centralized IT team. As SaaS has become a standard, many of those responsibilities have become unnecessary.
This presents a problem for procurement teams. They depend on IT staff during discussions about equipment and architecture.
Now, procurement teams are becoming more active in a business application role. Procurement consulting helps them make technology decisions based on business value. Consultants, in turn, understand the details and make recommendations.
How is this more cost-effective for procurement teams? There are a few benefits to managing technology vendors and resources in this way:
Teams can pair technology procurement with other procurement resources, reducing cost
Teams can have confidence in the viability of the consultant’s selections
Teams can develop a comprehensive technology strategy for the enterprise
Teams can focus on bridging gaps across departments
Every department needs IT solutions. Procurement consulting enables procurement to take a more holistic approach to technology acquisition. Applying a single SaaS solution across the enterprise provides greater cost savings.
Every department must manage their contribution to the bottom line. This pressure drives all departments to find more cost-effective solutions for their teams.
Procurement once used only in-house resources to deliver on corporate goals. The way they align with corporate goals is changing. They must deliver returns as a business investment.
Insufficient resources are putting those teams at risk. They need outside help to meet their requirements. They must provide evidence of their ROI.
Procurement has never had a more important role to teams across the enterprise. They can meet this demand with procurement consulting solutions.
Procurement teams seek to centralize efforts between departments. IT and marketing teams are a perfect example.
Procurement initiatives have become more IT dependent. Both teams rely on joint technology solutions to meet those needs. Corporate policies might hinder internal procurement teams from doing so.
Procurement consulting allows them to outsource vendor selection. Internal teams can apply this advantage to their responsibilities across departments. This allows them to have a more holistic approach to resource management.
The market is always changing. Organizations must always be changing, too.
Internal resources often lack the agility to do so. Policy and regulation get in the way.
As a result, companies make large investments in solutions that become outdated. They must make adjustments internally. This adds cost and effort to the process.
Procurement consultants offer the long-term business value of agility. It is their business to adjust to changing market demands. They must always meet their clients’ goals.
In that way, you are not only outsourcing capabilities. You are outsourcing risk and the friction associated with change.
Procurement’s greatest goal is to identify low-risk, cost-effective solutions. They must drive business value on a long-term basis. Procurement consultants are a flexible resource that can adapt to their needs.
These consultants can find the most cost effective solutions without internal preferences getting in the way. They can help organizations overcome attachments to inferior products and services. They can introduce them to even better ones.
Procurement consultants can help internal teams prepare for outsourcing. There is a world of value to gain after this first step.