Hertz's Vote of Confidence for Procurement Outsourcing

There are certain brands that stand for quality and service. In the commercial aviation world, it's Singapore Airlines. In the retail world, it's Nordstrom (or an equivalent such as Barneys, Saks, etc.) But in the rental car arena, it's Hertz -- without question. The entire Hertz experience for their elite members is so far superior to competitors from the moment you step inside the rental bus (which is actually clean). But you pay more for the service (and Hertz knows it, which is why getting them to participate in reverse auctions is impossible, from what I hear). So when a company like Hertz which stakes its price premium and brand on customer service moves to an outsourced procurement approach as evidenced by their new contract with ICG Commerce, it's a further vote of confidence that procurement outsourcing does not mean a sacrifice in quality -- either for internal or external customers.

According to a Supply and Demand Chain Executive story on the news, "Under the contract, ICG Commerce will provide procurement outsourcing services for Hertz's North American and European operations. These services are ... in buying categories that include professional services, equipment and automotive, facilities, transportation, IT, benefits, and marketing." I'd argue that all of categories are not only strategic to Hertz’s business and bottom line -- they are integral to the customer experience that differentiates Hertz from the rest of the pack. So if Hertz can take the category outsourcing plunge in an environment where the customer matters uber alles, so can you.

- Jason Busch

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