Executive Briefings

Procurement Outsourcing Drives Strategic Value                          

Organizations seeking to improve corporate performance often look to Business Process Outsourcing (BPO) services to streamline business processes and improve operational performance. Procurement is not immune from this pressure and outsourcing is becoming more accepted as a viable strategy for procurement performance improvement. It is reaching a tipping point, facilitated by the fact that procurement outsourcing is being leveraged to achieve strategic value beyond the cost-cutting, tactical benefits traditionally realized, according to a new study published by Aberdeen.

The benchmark report, "Procurement Outsourcing: A Strategic Imperative," leverages the insights of procurement executives from over 260 enterprises. Findings indicated that 40% of enterprises are expected to engage in procurement outsourcing in the next two years.

"Our research has discovered that top performing enterprises are more likely to leverage third-party expertise in the form of outsourcing," said Bill Browning, research analyst, Aberdeen. "Top performing companies realize strategic benefits such as gaining supplier and market intelligence and streamlining operations, while also delivering cost and process savings."

Best-in-Class enterprises are excelling in many performance metrics, demonstrating:
1. 8.3% savings due to sourcing efforts from outsourcing operational and strategic sourcing
2. 30% lower costs to process a requisitions than all other companies
3. 55% rate of compliance to contractual agreements

The Procurement Outsourcing benchmark report recommends that enterprises should start by carefully evaluating current process and technology capabilities to establish a baseline and identify outsourcing needs, and then focus on strategic advantages that can be gained in addition to tactical, cost-cutting results.

To obtain a complimentary copy of the report, go to:
http://www.aberdeen.com

Organizations seeking to improve corporate performance often look to Business Process Outsourcing (BPO) services to streamline business processes and improve operational performance. Procurement is not immune from this pressure and outsourcing is becoming more accepted as a viable strategy for procurement performance improvement. It is reaching a tipping point, facilitated by the fact that procurement outsourcing is being leveraged to achieve strategic value beyond the cost-cutting, tactical benefits traditionally realized, according to a new study published by Aberdeen.

The benchmark report, "Procurement Outsourcing: A Strategic Imperative," leverages the insights of procurement executives from over 260 enterprises. Findings indicated that 40% of enterprises are expected to engage in procurement outsourcing in the next two years.

"Our research has discovered that top performing enterprises are more likely to leverage third-party expertise in the form of outsourcing," said Bill Browning, research analyst, Aberdeen. "Top performing companies realize strategic benefits such as gaining supplier and market intelligence and streamlining operations, while also delivering cost and process savings."

Best-in-Class enterprises are excelling in many performance metrics, demonstrating:
1. 8.3% savings due to sourcing efforts from outsourcing operational and strategic sourcing
2. 30% lower costs to process a requisitions than all other companies
3. 55% rate of compliance to contractual agreements

The Procurement Outsourcing benchmark report recommends that enterprises should start by carefully evaluating current process and technology capabilities to establish a baseline and identify outsourcing needs, and then focus on strategic advantages that can be gained in addition to tactical, cost-cutting results.

To obtain a complimentary copy of the report, go to:
http://www.aberdeen.com