Value of indirect procurement finally realised

Indirect procurement organisations have come a long way and are increasingly recognised as having significantly more value to contribute, according to a recent survey.

A.T Kearney’s 2010 Indirect Procurement Survey found that indirect spending accounts for 60 percent of third-party spend in non-manufacturing companies, more than 90 percent in the financial services industry, and sometimes 50 percent of spend in manufacturing organisations.

Today, indirect procurement is most influential with IT, telecom, and logistics categories. And looking ahead, the greatest growth is expected in overhead and support, with facilities and logistics following closely behind.

Far more people recognise the importance of indirect procurement as it now includes purchasing complex goods and services such as IT, marketing and advertising, facilities management, professional services, and maintenance, repair and operations (MRO), but few companies manage complex indirect spend categories with the level of attention necessary to reap the potential benefits. This means that there is still room for potential benefits if organisations are willing to manage such complex issues.  

To identify how leading procurement organisations are managing the procurement of indirect goods and services, A.T. Kearney performed the 2010 Indirect Procurement Survey, querying procurement executives from 94 multi-national companies who manage a combined global indirect spend of nearly $134 billion.

It is clear from the results of this survey that indirect procurement organisations have significantly more value to contribute.

Read more.