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Posts Tagged ‘sourcing’

Outsourcing Procurement : Understanding Benefits

Tuesday, September 25th, 2018

As everyone in the business world in India is aware, outsourcing procurement has become a widespread practice. At the same time, it is also interesting to note the extent of skepticism surrounding the growing sector and how sourcing companies in India are tackling this uncertainty.

 

Procurement outsourcing companies need to understand the hesitancy from the end of organizations and organisations need to accept the huge impact sourcing companies can have on all business operations especially vendor management, increasing cash flow and managing tail spends.

Let’s take a look at the benefits of engaging a top procurement company for you organization:

  • Concentration on core business processes thus saving money, energy and time. It also allow the organisation’s resources to be free from additional stress of coordinating with vendors and tackling periodic payments.
  • Market intelligence which will lead to better cost management, better suppliers and a huge variety of goods and services at competitive prices.
  • Expert knowledge and guidance from procurement consultants
  • An opportunity to investigate and analyse the gaps in the existing system and hence improve upon the same
  • Negotiation benefit by vendor management experts in the field for more cost effective benefits
  • Seamless source to pay services are provided by most procurement companies which help in streamlining the financial system

The most important change however achieving operational efficiency across functions. From financial to resources management to tail spends, everything under a procurement sourcing company is streamlined and smooth. Owing to professional expertise, sourcing solution consultants focus on bringing maximum profits to your business with minimum input.

It may be argued that the reduced control on day-to-day services is a factor that hold back organizations from investing in a sourcing solutions company, but in the long run, the impact of loss of control is negligible. The procurement agency is focused on building customized solutions for your organization irrespective of the challenges faced.

Organisations in India are gradually understanding the need for a procurement sourcing company and are investing in the right place for their benefits and it is only a natural way to proceed. For organizations which are wary to give up control of their operations can proceed slowly. Sourcing one service from the gamut of procurement services and hence measuring returns might be a great idea for organizations who just want to test the waters.

To understand the growing role of procurement companies in India and how they benefit businesses, you can visit www.vpurchase4u.com or write to info@vpurchase4u.com.

How to cut your tail spend by 80%

Tuesday, June 19th, 2018

The age old problem of unmanaged costs has driven established organisations to take drastic steps. Every organization strives to excel at – minimum input for maximum output, though what they forget is dynamic external factors. Best industry practices are a guiding path for new, growing and to some extent established businesses; however for tail spend management, it is crucial to form a structure that is best suited to your needs.

What is tail spend management?

In simple terms, tail spend is a series of small purchases that are either too big or impromptu to be handled by procurement agencies. Organisations are policy-driven with a stack of paperwork to be fulfilled for each transaction. Though this holds true in 85% of organsation based transactions, it may not be true for the other 15%.
Lengthy paperwork, redundant contracts, sudden demands, low quantity and unreliable vendors are all contributing factors to a significantly high tail spend. In the last decade, companies of all sizes have gradually shifted focus to sourcing, vendor management, tail spend management and resource management. What earlier was considered as extra, unnecessary cost, today has become a key area for organisations to focus.

The need to focus on core business

The ability for a business to focus on their core functional areas while at the same time maintaining low tail spends is optimal. However it is observed that attention on reducing tail spend takes away from the core business which leads to an unbalanced work structure. It’s best to employ a third party tail management agency which not only identifies areas that need attention but also predicts potential troubling areas and thereafter prepares a plan of action.

An effective strategy

Tactical buying, spend analytics and local market knowledge are significant areas through which an organization can concentrate on their progress rather than managing time consuming functions.
Analyse and construct a strategy that works for your business and turns extra tail spend into incremental savings. If this investigative process is not a feasible option for your business, it is best to concentrate on employing a third party agency which understands your business, industry and work ethics. Not only will a third party agency nurture your current work flow but will also bring in an uncomplicated approach to reduce tail spends.

Get in touch with our consultants for a more thorough understanding of tail spends and how you can reduce it for your organization. Write to us at atul.masih@ascgroup.in

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