Procurement professionals predict outsourcing to increase

A recent study has revealed that procurement professionals are predicting that outsourcing activity will increase in the next year.

The report, conducted by the Procurement Leaders Network and Capgemini, revealed that over a third of procurement professionals (37 per cent) are planning to outsource in the next 12 months and 47 per cent within two years.

One of the cited benefits of outsourcing procurement was that organisations are able to gain greater control of spend and improved visibility of both spend and supplier communities. Supplier relationship management (SRM) emerged as an area that CPOs are keen to address, with 70 per cent of respondents claiming it to be a focus area.

This trend could be explained by the heavy emphasis put on SRM as a consequence of the economic downturn, growing supply chain competition and the increased focus on supply chain improvements (57 per cent).

The survey, which consisted of over 170 CPOs and other senior procurement executives worldwide, also revealed increasing influence of procurement in decision making. 87 per cent are now involved in negotiating outsourcing deals, 72 per cent in contract management and 71 per cent in supplier selection.

Other key findings in the report revealed:
• Cost is still a major issue: 94 per cent view cost reduction as a major challenge currently, while 52 per cent listed improvement visibility and reduction of working capital (49 per cent) as top procurements priorities.
• Sustainability and CSR are growing issues: high on procurement leaders’ agendas are sustainable sourcing  (49 per cent) and CSR (41 per cent)
• Predicted growth of outsourcing: 66 per cent will be looking for an outsourcing provider for inventory management in the future, 58 per cent would consider using procure-to-pay and 60 per cent would consider using an outsourcing partner to leverage innovation.

Log on and download the full report.