Why Procurement Leaders Need External Support – New Paper Out Now

We have a new briefing paper available - “Achieving procurement leadership through external services”.  You can download it here, free on registration.

We wrote it with support from consulting and managed services firm 4C Associates and in it we look at the various ways in which external procurement services can be used to augment internal procurement functions and capability. There are many different options these days, from casual contingent labour options to full-scale outsourcing, so an important part of the procurement leader’s role is working out how best to utilise the external market for support in the best possible manner. Today, we have an extract from the paper in which we discuss why organisations use external support.

Achieving procurement leadership through external services

“Every leader has to delegate to be successful, and that applies to procurement and the CPO too. The procurement function must take advantage of externally provided options in order to maximise success. Putting it simply, it is impossible today for any organisation, or a function like procurement within the organisation, to be good at everything. In most organisations, for a start, the span of what procurement does (or should do) is huge. Think of the implications of trying to be truly an expert in terms of every spend category, as well as every aspect of the various procurement processes, from category management to contract management and supplier relationship management.

That complexity has increased with globalisation and developments in technology over recent decades - and whilst the dawn of the Internet has made information much more readily available to everyone, in a sense that has just served to highlight what we don’t know about many subjects.

It is also uneconomic for the organisation to do everything itself. There is a reason why virtually no one develops their own software today. It makes economic sense for specialist firms who devote all their time and energy to making the best eSourcing, purchase to pay, or supplier information management systems to focus on that. The organisations that use such software focus on making better cars, chocolate, or providing public services to the best of their abilities.

Then we have supply shortages – even if the organisation wanted to do everything internally, it might prove impossible. We see skill shortages in everything from specific category experts, to truck drivers. Unless an organisation has the critical mass to really develop, maintain and manage such scarce resources internally, in every area, they will need to buy in from external providers. That approach enables the market to share these resources in a manner that is more effective for everyone”

(To read the whole paper, please download it via this link, free on registration)

First Voice

  1. Gemma:

    Great piece. “Unless an organisation has the critical mass to really develop, maintain and manage such scarce resources internally, in every area, they will need to buy in from external providers.” is very poignant!

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