Skills to manage a procurement outsourcing project

Skills to manage a procurement outsourcing project

Now, companies must acquire the skills to manage a project of procurement outsourcing and manage the resulting organization.

“Few things are impossible for those who are diligent and competent...
Great works spring not from strength but from
perseverance”

Samuel Johnson

Procurement outsourcing projects are new for businesses, for
several reasons:

• They are generally transversal to the company and therefore involve employees in multiple activities, in a logic that is more functional than hierarchical. The challenges of coordination and project management are therefore increased compared to more traditional projects. In this context, in particular, it is necessary to formalize project management methodologies to limit the risks associated with the number of stakeholders;
• They are sometimes multi-country. It is therefore necessary to have collaborators capable of managing multi-site projects, in heterogeneous cultural and linguistic environments;
• They involve various companies, in particular in the context of outsourcing projects. It is therefore necessary to have skills that know how to manage external service providers and to contract long-term commitments with high economic challenges.

While these skills are not really new for businesses, on the other hand the ability to dispose of it sustainably, both qualitatively and quantitatively, is of a completely different magnitude, as the projects are becoming more and more important and longer.

Setting up a Purchasing project team

While companies can partially use external service providers to strengthen themselves from time to time, it is imperative to be able to structure sustainable internal teams mastering all the skills required to successfully carry out this type of project.

This is why, in the absence of significant feedback on procurement outsourcing projects, it is appropriate to gradually increase the skills of internal teams through “pilot” experiences, by applying the following few rules:

• Framing your outsourcing strategy
• Train relationship managers within the company;
  — buyers
  — contract managers
  — negotiation teams
  — outsourcing project pilots
  — pilots of internal entities of shared service centers
• Strengthen project management skills for the management of functional interfaces;
• Outsource to simple, well-controlled and previously streamlined activities;
• Capitalize on the projects launched to develop internal skills quickly;
• Preparing for the concept ofAdaptive sourcing : integrating innovation and transformation and managing flexibility.

Preparing the internal organization

This increased proficiency is essential to the success of outsourcing projects and must be carried out in a pragmatic and long-term manner. This is a real investment that determines the company's ability to be able to successfully complete procurement outsourcing projects in the future. Once the organization is in place, the company must then have a new generation of managers capable of managing teams remotely, either because the activities have been outsourced or because they have been relocated. The challenge is to create new profiles, with a strong international dimension, capable of managing service providers.

Some companies have made no mistake in integrating these new types of procurement outsourcing project managers into their pool of “high potential” executives. Thus, functions that were once a necessary step in order to access positions of responsibility internally are gradually being replaced by activities related to outsourcing.

Indeed, the skills developed, especially in terms of management, are increasingly the same as those sought after and adapted to an international context. For example, Anglo-Saxon groups are gradually integrating their future “elites” into functions related to outsourcing projects or the establishment of industrial platforms as part of their international development strategy.