Outsource for success

Indirect spend can account for as much as 20% of spend for a company, yet in most organisations it’s either unsupported or at least under supported internally. This is often because it’s expensive to assemble a procurement team, while developing the expertise to manage it effectively is time consuming.

Very often, indirect procurement is left to execs that don’t necessarily understand how to get the best out of the indirect spend, despite best intentions. The result is spiralling costs, badly managed suppliers and fluctuating product quality.

It highlights the need for a structured and consistent approach to indirect procurement, and one that is in line with wider business strategy. To achieve that, organisations are increasingly outsourcing their indirect spend. It’s partly to get a handle on costs and quality, and partly to improve process, systems and procedure – things that have a significant impact on the business as a whole. When you outsource, you are not only hiring expertise, but you are hiring an approach, a set of processes and a set of systems that are designed to optimise a core aspect of your business.

When those are implemented, they have a far reaching effect on operations as whole. With costs rationalised and suppliers consolidated, your spend reduces. Relationships with existing suppliers improve because they’re managed better – thus increasing legal compliance and reducing risk. And with better suppliers and supplier relations, and with better managed spend, come improved efficiency, value and innovation. These all significantly enhance business process and performance.

Moreover, outsourcing frees your organisation to concentrate on the activities that it does best – its core function. To quote Peter Drucker: ‘A company should be engaged only in the front room activities that are core to supporting its business. Back room activities should be handed over to  other companies for whom these are front room activities.’ It makes a hell of a lot of sense.

At I-Tel, we specialise in Indirect Procurement. It’s our front room activity. We do it for companies in all sectors and of all sizes – and it works. Why? Because the approach is always the same – a partnership. We lead with data, secure savings and improve efficiency through automation – and that’s just in the first month. From there we work on constant refinement, to improve process, deliver value and ensure your procurement supports your long-term business strategy.

Want to put your procurement in the hands of experts? Drop us a line today and we’ll arrange a free, no obligation audit of your spend to get you going. Call on 029 2049 2111 or visit itelgroup.co.uk/contact to request a call back.

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