Why A Procurement Managed Service Can Transform Your Business
Procurement is about more than just acquiring goods and services at the right time and at the best price for your business. You have to plan your procurement and align it with the overarching goals of the organisaton. You have to build and maintain fruitful working relationships with your suppliers. You have to comply with rules and regulations. All of this takes real expertise, which you can access when you hire a procurement managed service to support you. Below is a look at how a procurement managed service can transform your business.
Clear, structured plans that include milestones and deliverables
Planning is vital in procurement because it helps you to identify your procurement needs and establish how you’ll meet them. The goals you outline in your plan provide direction so that you (and the procurement team) can work towards the desired outcome. Setting specific, measurable goals will help you to evaluate the progress you’re making.
Deliverables are likewise important because you can measure them against the progress you’re making. These tangible and/or intangible items that are to be delivered to a client, stakeholder or vendor provide clarity as to what each party must do and when they’re accountable in certain parts of the procurement process. A procurement managed service can support you with plans that establish goals and deliverables and keep your procurement function focused on achieving results for your organisation.
Greater control over costs
A procurement managed service must be flexible and should be able to adapt its services to your requirements; however, it will still have some clear processes that it follows to generate the results you’re looking for. That includes a process for cost control so that managers can review spending and approve purchase orders before you issue them to a supplier or vendor. This helps to control unwanted spending and keep you on target when it comes to meeting cost-cutting objectives.
Reduction of costs
How much are the goods and services you’re purchasing? Can you get them cheaper? A procurement managed service can help to renegotiate the price of the goods or services you’re purchasing or hiring and, by doing so, reduce your costs. The service can support you in the sourcing of items and how you manage different categories so that you’re cutting costs and getting the best out of your budget.
Improved supplier relationship management
Procurement MSPs facilitate two-way communication that invites feedback and cooperation between suppliers and organisations. A procurement MSP can also help to make suppliers more accountable by communicating what they expect from the supplier. They create a level playing field among suppliers by measuring performance by the same metrics for all of them, and they can diversify the supplier chain by engaging with different suppliers who bring different strengths to the organisation.
Comprehensive reporting and analysis
A procurement managed service can drive innovation. The service provider offers extensive expertise, combined with data analytics, which enables the organisation to make major strategic changes to its procurement function. The MSP may use tools your organisation doesn’t have access to and present you with a fuller picture of how your procurement function is performing.
Customised contracts that strive for long-term benefits
Globalisation, new regulations, increased complexity and larger volumes of contracts have highlighted the importance of good contract management. A solid contract management process can help you process contracts more efficiently and under the correct terms so you can generate more revenue. Well organised management of contracts improves operational efficiency as well.
A procurement managed service can help you create contracts that form the most beneficial working relationships for your business and also build your brand. Care in contract creation and in the interactions that follow shows a strong company brand. Everything from how you word your contracts to how you interact with the other parties shows how you function.
In 2023’s current economic climate, procurement departments are under increasing pressure to deliver more with limited resources. Working together with a MSP provides much needed support, allowing the core team to concentrate more on strategic initiatives. Shifting more focus onto strategic initiatives not only provides greater scope for procurement to align with organisational strategy and the associated benefits that brings, but also leads to higher levels of team satisfaction as team members engage in more interesting, more rewarding work.
A procurement managed services can help you transform your business by providing strong, reliable support in some of its most complex aspects. You’ll be able to navigate procurement confidently and successfully, and work much easier towards your targets and achieve greater value for your business. To find out more about our own procurement managed service and how we can help you, visit our Procurement Management Service page or contact us directly and we’ll be happy to advise you further.