THE NEXT STEP FOR PROCUREMENT

Procurement cost can represent anywhere from 50%-70% of annual revenues for many companies so even small percentage reductions in that cost base can have a major impact on profitability. As organizations strive to improve the efficiency and effectiveness of their procurement function, an increasing...

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Bibliographic Details
Published in:Supply Chain Europe 2010-05, Vol.19 (3), p.22
Main Author: Scott, Richard
Format: Article
Language:English
Subjects:
Accounts payable
Category management
Compliance
Cost control
Infrastructure
Outsourcing
Purchasing
Sourcing
Success factors
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Summary:Procurement cost can represent anywhere from 50%-70% of annual revenues for many companies so even small percentage reductions in that cost base can have a major impact on profitability. As organizations strive to improve the efficiency and effectiveness of their procurement function, an increasing number are seeking to create and implement improved operating models that blend the best of their internal capabilities with the skills and capabilities on offer from the Procurement Outsourcing marketplace. When choosing a procurement business process outsourcing provider, clients should consider source-to-pay as an integrated and modular offering. There are seven areas that a company should focus on to optimize the benefits from source-to-pay outsourcing of indirect spend. These are: 1. strategy and sponsorship, 2. vendor partnership, 3. contract and relationship, 4. solution design, 5. pricing and incentives, 6. transition and 'go-live', and 7. governance and delivery.
ISSN:1742-447X