Outsourcing Procurement: Pros & Cons<\/h3><\/div><\/div><\/div>PurchTips edition #424<\/p>\n<\/div>
Will Your Company Outsource Procurement?<\/h4><\/div><\/div><\/div>If you\u2019re in procurement, the idea of the outsourcing of procurement can be scary. The concept may give you a sense of job insecurity. It may feel like you\u2019re competing for your own job.<\/p>\n
But, on one hand, the more you understand the pros and cons of\u00a0outsourcing procurement, the better you will be able to demonstrate why you, and\/or your procurement department are the most competitive choice for the job. On the other hand, perhaps you could benefit by \u201cswitching sides\u201d:\u00a0 becoming a provider of outsourced procurement services.<\/p>\n
Here are some common, potential pros and cons of outsourced procurement.\u00a0 Not all apply in all situations.<\/p>\n
Pros\/Advantages:<\/strong><\/p>\n\n- Access to newer technology without capital investment<\/li>\n
- More flexibility for fluctuating or seasonal headcount requirements<\/li>\n
- Lower cost<\/li>\n
- Expanded knowledge of supply base due to interactions with the same suppliers for multiple customers<\/li>\n<\/ul>\n
Cons\/Disadvantages:<\/strong><\/p>\n\n- Less integration with key internal functions<\/li>\n
- Slower responsiveness<\/li>\n
- Lack of control of chosen personnel and their interactions with internal customers and the supply base<\/li>\n
- Inhibited ability to collaborate for competitive advantage<\/li>\n
- Difficult to reverse if the top-level talent is displaced for an outsourcing initiative that fails to meet expectations<\/li>\n<\/ul>\n
PurchTips edition #424<\/p>\n<\/div>
Will Your Company Outsource Procurement?<\/h4><\/div><\/div><\/div>If you\u2019re in procurement, the idea of the outsourcing of procurement can be scary. The concept may give you a sense of job insecurity. It may feel like you\u2019re competing for your own job.<\/p>\n
But, on one hand, the more you understand the pros and cons of\u00a0outsourcing procurement, the better you will be able to demonstrate why you, and\/or your procurement department are the most competitive choice for the job. On the other hand, perhaps you could benefit by \u201cswitching sides\u201d:\u00a0 becoming a provider of outsourced procurement services.<\/p>\n
Here are some common, potential pros and cons of outsourced procurement.\u00a0 Not all apply in all situations.<\/p>\n
Pros\/Advantages:<\/strong><\/p>\n\n- Access to newer technology without capital investment<\/li>\n
- More flexibility for fluctuating or seasonal headcount requirements<\/li>\n
- Lower cost<\/li>\n
- Expanded knowledge of supply base due to interactions with the same suppliers for multiple customers<\/li>\n<\/ul>\n
Cons\/Disadvantages:<\/strong><\/p>\n\n- Less integration with key internal functions<\/li>\n
- Slower responsiveness<\/li>\n
- Lack of control of chosen personnel and their interactions with internal customers and the supply base<\/li>\n
- Inhibited ability to collaborate for competitive advantage<\/li>\n
- Difficult to reverse if the top-level talent is displaced for an outsourcing initiative that fails to meet expectations<\/li>\n<\/ul>\n
If you\u2019re in procurement, the idea of the outsourcing of procurement can be scary. The concept may give you a sense of job insecurity. It may feel like you\u2019re competing for your own job.<\/p>\n
But, on one hand, the more you understand the pros and cons of\u00a0outsourcing procurement, the better you will be able to demonstrate why you, and\/or your procurement department are the most competitive choice for the job. On the other hand, perhaps you could benefit by \u201cswitching sides\u201d:\u00a0 becoming a provider of outsourced procurement services.<\/p>\n
Here are some common, potential pros and cons of outsourced procurement.\u00a0 Not all apply in all situations.<\/p>\n
Pros\/Advantages:<\/strong><\/p>\n Cons\/Disadvantages:<\/strong><\/p>\n\n
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