Challenges and perspectives of procurement outsourcing

In order to face an increased competitive context and a growing development of activities, especially internationally, the use of new approaches is increasingly being considered by businesses.

The aim is to seek more flexibility, lower the breakeven point and increase efficiency within the framework of an adaptable model.
These so-called “industrial” approaches, such as relocation,outsourcing or the pooling of purchases through the establishment of shared service centers, appear attractive, as evidenced by their success with actors from the Anglo-Saxon world.
However, they are still a source of many questions, and sometimes even concerns.
For the time being, French companies, compared to Anglo-Saxon companies, seem to still remain relatively far away from this movement affecting the very structure of the company, its culture and its management method.

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While the future is only anticipated in the short or medium term, should we see this relative withdrawal as legitimate caution or excessive complacency? What are the inherent risks to an industrialization project, the obstacles to anticipate, the prerequisites to be verified in order to succeed in the transformation and derive all the expected benefits? What is the ultimate impact on the organizational model and management method of the company?

The internal challenges of procurement outsourcing

For business leaders, it is a challenge. He must maintain his positions while changing his position: To transform to remain competitive and To differentiate sustainably from its competitors, without losing its know-how, its development capacities and its leadership.
The leader needs new management approaches to engage your business on paths that are much less marked out than yesterday, requiring audacity and flexibility, with continuous and closer transformation cycles. However, if you cannot refuse transformation, you must know how to anticipate it and manage its inherent risks.

If people are at the heart of the organization, how do you motivate them and orchestrate a dynamic when they are no longer physically present? How do you recreate a new form of collaboration? With what resources? What are the consequences for the company and what is the capacity, if necessary, to go back in time? How globally not to become a virtual business?

What are companies looking for through procurement outsourcing?

The appeal is not limited to cost reduction nor to the opportunities offered by the globalization of the economy. Far beyond that, companies are evolving their organizational model in total coherence with their strategic challenges : unintertwining the organization to gain flexibility and flexibility, to be more agile in the context of international development and the globalization of activities and, increasingly, to facilitate integrations.

Therefore, the whole challenge for the company is to manage to maintain its unity, its coherence, in order to avoid becoming virtual. Rebuilding, yes, but on a coherent, solid, sustainable and continuously adaptable basis. While the goals are not new, they are now being considered in a larger framework and on a larger scale.

Rethink the global procurement architecture

Businesses are reorganizing, disintegrating for some; for others, playing the game of consolidation. Although they have worked a lot so far to improve their “content” — processes, systems —, the growing pressure of the market requires them to also rethink their “container”, that is to say their global architecture. It is therefore truly a new approach to transformation that must be considered, more ambitious, more global, more impacting on the organization and people and therefore necessarily riskier.
Thus, to be effective in a more fluid and global environment, the company must reinvent constantly. Industrialization, in its various forms (outsourcing, relocation or sharing), is one of the most relevant responses to this requirement. However, for it to be effective, this approach must certainly not be experienced or followed as a fad. On the contrary, it must To be wanted and register in a strategic vision. Not to mention that you also need to know how to manage transformation in a pragmatic way by controlling risks.

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