Thursday, September 02, 2010
Latest Procurement News
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KNOWLEDGE MANAGEMENT TAGS
"Outsourcing"
Many firms unhappy with procurement outsourcing deals
Many companies who have outsourced management of their procurement to a specialist outsourcing provider are left feeling they have closed a "bad deal", it has been claimed.
Efficio vice president Luisella Chiesa said that problems often occur because key issues have not been taken into account, including the need to be sure exactly how much of the procurement process is to be outsourced.
According to Chiesa "knowing what you want" and "demanding full transparency" are the among the golden rules for successful procurement outsourcing. It is also crucial to gain full visibility of the spend concerned before embarking on the outsourcing project. Without this, says Efficio, it is impossible to know what the savings may be.
Full transparency must be demanded from the outsourcing service provider. It is not a "nice to have" but a "must" in assessing the value to be gained from such a deal.
Another golden rule says companies should keep contracts with suppliers in-house - rather than allowing an outsourcing provider to take them over - to enable evaluation and full benchmarking of the costs involved and savings achieved.
"Outsourcing is often a difficult area to get right and has been, in many cases, heavily weighted towards the service provider. However, it does not have to be this way and the key is to know your spend, be fully aware of the terms and conditions, ensure you have full transparency and be prepared to monitor," Chiesa said.
Procurement Tags - Efficio, Outsourcing
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