Shared Services Centers Purchasing: process efficiency, value creation

“Internal” sourcing (we no longer talk aboutOutsourcing !) involves the creation of CSP Purchase — Shared Service Centers.
What are the benefits of these CSPs? They are numerous, and there are more and more.
Obviously the first advantage remains the grouping of activities according to standardized processes. This is the fundamental gain in the story — too many cases of outsourcing have failed because the advantage put forward was the reduction in cost by operating the grouped activities in a low-cost location. The famous “the same mess for less!! ”

It is the transformation of processes that generates the gain in direct costs.

Today, Indirect benefits are numerous and increasingly convincing.
These powerful levers are becoming more and more accessible.
But first you have to create Purchasing CSPs!

Direct gains are well known; their achievement depends on the transformation of processes and the establishment of a new organization.

Today, the indirect benefits are numerous and increasingly convincing:

• The Cloud gives birth to a new species of solutions for standard processes (purchase order to pay, expense report, inter-subsidiary exchange...)
• The ability of computer tools to deal with the” Big data ” makes cash flow optimizations possible through the analysis of data in terms of working capital. The cash-out/cash-in cycle can really be optimized
• La robotization highlights the possibilities of winning even more than “low-cost” outsourcing by setting up robots for mechanisable treatments.

Justify the establishment of a CSP Achats

Most of the time, a company seeks to “justify” the implementation of CSPs by the direct cost impact. This has been facilitated in the past by the opportunity to access lower treatment costs. But today it is becoming difficult because:

1. outsourcing is banned
2. the window of fire is closing with offshore costs becoming less and less “low”...

So much the better! We will be able to return to the basics: process transformation, and the resulting operational efficiency. In this sense, a Benchmark makes sense to compare the processes in place in the company and also among colleagues (but often these external comparisons are denounced as irrelevant by those who resist change).

We will look for existing best practices and apply them in a centralized place, while making them even more effective.

But it doesn't end there! The establishment of standardized processes and the centralization of data allow access to new solutions such as Sourcing Force. INDIRECT gains would be more important than direct gains.

This complicates the task of deciding on the prior establishment of the CSP Achat, but gives strong arguments.

The second line of work concerns thecash flow optimization — for the transactional processes that are at the heart of the activities of CSP Purchasing.

We think that the level of indirect gain far exceeds the direct gain. And we are going back to our guesswork on the maturity of the project teams (operational, purchasers) to assess the possibilities and make a choice taking into account the potential for value creation opened up by a 21st century Purchasing CSP.

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