According to a study by an international consulting company, more and more companies are outsourcing their procurement.
50% of European and American companies will introduce outsourcing solutions in the area of procurement processes within the next three years, while 22% are already implementing this as a strategy.
This is the result of a survey conducted by an international consulting firm among more than 200 procurement executives from various industries in Europe and the USA. The survey shows that French companies are most inclined to adopt outsourcing in the near future and that 64% will implement such solutions immediately by 2006.
This is followed by British and American companies with 58%, Italian with 42%, while in the rest of Europe 39% of German, Austrian and Swiss companies plan to introduce procurement outsourcing services within the next three years. The area where outsourcing finds the greatest application is that of non-strategic processes, which include application hosting solutions and request-to-pay.
Regarding these activities, 43% of respondents are attracted by the opportunity to reduce costs while dedicating more time to managing internal company activities. However, 22% of respondents said they are willing to consider outsourcing materials management by 2006, and 9% said they have already implemented this strategy.
“It is clear from the survey that procurement outsourcing is becoming a fundamental requirement for many companies.
In the future, however, the main challenge will not only be cost savings; In fact, procurement outsourcing represents a fundamental tool that companies can use to gain new advantages in terms of strategy and competitiveness”.
The size of the company in terms of sales is the most important indicator for the current use and future of the procurement service provider. Among the companies surveyed, 31% of larger companies said they currently use outsourcing in some areas of procurement and 36% plan to do so in the near future. In contrast, only 15% of smaller companies use procurement outsourcing services, and only 34% plan to do so in the future.
“Companies that are more inclined to implement procurement outsourcing solutions are those with greater dimensions, i.e. those that have already achieved significant results in optimizing their internal processes but remain focused on an aggressive cost reduction strategy”.
Methodology
The survey was conducted in late 2003 among 219 corporate procurement executives in 14 European countries and the USA who participated in an online survey about current and future procurement operations.
83% of respondents work in companies with revenues over $500 million, and 67% of companies have five or more locations to conduct procurement operations.
The companies considered operate in manufacturing, telecommunications, distribution, services and public sectors.
