How Outsourcing Procurement Can Optimize Costs
In an environment where many businesses are struggling to pull in pre-pandemic revenue, optimizing costs takes on even greater importance. While in many cases that means cutting costs, sometimes optimizing expenses means shifting budgets from one area to another, or perhaps investing in higher-quality talent, services, technology, etc., which can ultimately lead to a stronger bottom line.
Yet not every company has the resources to review spending, particularly small and mid-size businesses that do not have full in-house procurement and finance teams. If that’s the case at your organization, or if your teams are simply overwhelmed, consider how outsourcing areas like procurement can help to identify cost savings and opportunities to improve spending overall.
Doing so does not have to mean lifting out your procurement function entirely, but by partnering with a procurement specialist, you can gain the support you need while freeing up resources internally to focus on other pressing challenges.
Identifying Cost-Cutting Opportunities
Whether your spending needs have changed due to COVID-19 or you simply want another set of eyes to see if you can make positive changes to your purchasing, partnering with a procurement specialist like GoProcure Buyer’s Desk can help you cut unnecessary spend.
For example, a company that spends thousands or even millions on telecom bills, including international cell phone plans for employees who typically travel often, may need to start looking into changing those plans to reflect the current business environment. Working with an external procurement provider can help you monitor these costs and either negotiate better rates or find a more suitable alternative for your needs.
Outsourcing procurement can help cut unnecessary spending by streamlining and centralizing your spending. Instead of each employee making purchases on their own, some of which may be overpriced or unneeded (such as duplicate purchases), an outsourced purchasing team can look at your organization as a whole and purchase what you need at your desired budget.
Finding High-Quality Suppliers
In addition to reducing costs, such as by trimming unnecessary spend, part of optimizing costs can also be dependent on partnering with high-quality suppliers, and an outsourced procurement specialist can help with this sourcing and onboarding.
With these partners, you can potentially save money such as by working out better bulk purchasing rates or receiving higher-quality products that need to be replaced less frequently, thereby providing a higher ROI. Finding high-quality suppliers can also help in areas such as improving corporate sustainability and increasing diversity spend. These areas ultimately lend themselves to improved customer and employee experience, which in turn lead to lower turnover and increased revenue.
GoProcure’s Strategic Sourcing function can help you take this search for suppliers off your plate. We use a proven tollgate process that can typically generate 5-15% cost savings for you, in addition to helping you find suppliers that better align with your corporate values and goals.
In some cases you might not want to lift out the actual purchasing areas from your organization, but you do want more hands on deck to help with procurement activities. Still, your HR team and procurement/finance managers might be too busy to find talent at the moment, in which case you can work with a partner like GoProcure that already has a proprietary database of qualified sourcing and procurement professionals.
Whether you’re looking for contractors, contract-to-hire or permanent employees, outsourcing some of the talent search to a partner like GoProcure can help you get up to speed faster.
Start Optimizing Procurement Costs
Outsourcing certain aspects of procurement not only can free up time for your staff but can also lead to direct cost savings and more effective uses of your budget. In addition to leveraging GoProcure’s procurement services, you can also utilize technology like e-procurement platforms to take on some of the heavy lifting, particularly with areas like tail spend that require more attention than you might be able to provide manually.
To get a sense of how you can start saving by getting a handle on unmanaged spend with GoProcure’s platform, try our new cost savings calculator to see for yourself.
Want to learn more about how outsourcing procurement and/or leveraging technology can help optimize costs? Request a free consultation with our product experts today.