One of the marketing activities that a company should consider outsourcing to a third party is procurement. Outsourced marketing services can help you shoulder specific key procurement responsibilities associated with sourcing and supplier management. Just like other types of business tasks outsourcing, the essence of procurement outsourcing is to cut back overall costs and boost a business’ focus on its core competencies.
How Businesses and Companies Benefit Immensely from Procurement Outsourcing
Outsourced procurement service providers enable businesses and organizations to achieve immediate benefit from experienced and expert procurement officers. As a result, the need to create an internal procurement team and the longer time it will take to properly integrate the team into the business is eliminated. Therefore, leveraging outsourced marketing services for procurement tasks is a viable solution for businesses and organizations with no internal procurement competencies. Ultimately, they will achieve cost reduction and efficient suppliers/contract management.
Procurement outsourcing has evolved to become one of the top solutions in the list of procurement solutions in automobile industry particularly, with the target offshore locations being China and India. It’s an excellent way to ensure timely delivery of materials among other benefits.
What are the Different Types of Procurement Outsourcing?
Usually, procurement outsourcing providers categorize procurement activities into two major aspects; direct procurement and indirect procurement.
Direct Procurement: This refers to any good that the company purchases and channels directly to its production process. Typical examples include ingredients and packaging for a company that deals in food production.
Indirect Procurement: The goods, as well as services that the company procures for the purpose of its production activities, come under indirect procurement. The scope of this category is vast and would include IT related services such as software and hardware, facilities and office services such as furniture and cleaning.
Indeed, procurement outsourcing service providers are experts in what they do. They’ve built excellent expertise in this marketing niche over the years. Some have specialized in specific aspects such as recommendations or strategic input.
Before you step out to hire procurement service providers, be aware that the provider will normally request for remuneration (fixed amount) before committing to the outsourced procurement task. And, some providers structure their fees based on performance or incentives (percentage of savings made for the company through their procurement activities).
Now that you know how procurement outsourcing through outsourced marketing services works, you should take the right steps towards hiring the most qualified provider for your procurements. Shop around, ask businesses in your niche for references and use the internet to source for the best possible procurement service provider. You will ultimately find the best hands that you seek for your procurement tasks.
Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.