Readers of last week's Outsource Monthly email were treated to a unique gift when they opened their mail: a free copy of a report produced by Sourcing Industry Group (SIG) with the support of Jay Lash entitled 'A Business Case for Outsourcing the Management of Your Contingent Workforce'.
In its campaign against the UK's continued membership of the European Union, 'Vote Leave' claimed that EU procurement rules, which govern the purchase of goods and services by public sector bodies, cost UK taxpayers £1.6bn a year. It also claimed that 1.9 million days a year are lost to red tape delays.
Is it likely or possible that the UK can save this money and time cost by changing the public procurement rules after Brexit?
Depending on your business sector, the department you work in or your job function, innovation means different things to different people. Procurement professionals may view innovation as a long-term strategy, given the tremendous potential for delivering efficiencies and cost savings over time, while other business functions may see it differently. Their interest might be focused on enhancing performance and processes, delivering slicker workflows or increased speed to market.
Growing economic uncertainty has seen many businesses look to procurement for a means to increase savings and ultimately drive growth. This is especially true in the retail industry where common issues include mounting costs, struggling suppliers, increased competition and expanding supply chains. On top of this, savings must be achieved without affecting the quality of the end product or customer experience.
There always seems to be plenty of commentary around what’s driving innovation and growth in both large enterprises and startups. By comparison, the mid-market seems slightly neglected; this seems an oversight given the crucial role it plays in the UK economy. Although this market segment represents just 1% of UK firms, medium-sized businesses are increasing revenues by an average of 6.7% each year and the mid-market is expected to boost the economy by 18% over the next five years.
Congratulations! It’s been three years since you decided to outsource accounts payable. Or, accounts receivable, or customer care, or payroll, or HR, or procurement, or any one of a dozen business process functions typically outsourced, in part or in full. You’ve finally stabilised operations, established consistent market standard processes, addressed the fears from the field, started realising those projected savings, and convinced IT that it is possible to improve response time without creating a horrific security breach.
As the drone flew over the factory in North Carolina and captured pictures and videos both inside and outside the factory, little did the company whose factory was being photographed realise that their practices would be questioned. Here is a factory that processes pig meat. The way the factory is designed is to optimise the number of pigs and the weight of these in order to get maximum production out of it. So, what is wrong with all this?
Emerging technology services have revolutionised the sourcing industry. These disruptive technologies like autonomics, interface technologies, big data analytics and other computing technologies have permitted smaller companies to successfully challenge established incumbent businesses. Specifically, as incumbents focus on improving their products and services for their most demanding (and usually most profitable) customers, they may exceed the needs of some segments and ignore the needs of others.
As regulations and consumer pressures shift and organisations are increasingly exposed to risk – reputational and beyond – the procurement industry faces a critical juncture. This dynamic has created a business environment where sustainable procurement programs are no longer just nice to have, but an integral organisational function that is responsible for protecting and improving brand reputation, driving revenue and mitigating business risk.