The benefits of outsourcing procurement

All businesses know it: purchases represent between 40 and 80% turnover by sector of activity. Purchases therefore have a strong and direct impact on a company's margin.
Between the definition of the original need and the supplier payment, the TCO (Total Cost of Ownership) costs an average of €150 and 148 minutes of order processing time for a company.

Two numbers to remember: -5% equals +50%!

What does that mean? It is often said that a 5% decrease in the price of purchases leads to an increase in the gross margin of more than 50%. For this impact to be significant, it would take an increase of more than 25% in sales to achieve a similar result.
Thus, procurement outsourcing allows businesses to lower treatment costs and therefore the time to place an order. Here are the benefits:

1 Rationalization of costs:
Outsourcing by a service provider will potentially professionalize purchasing
while reducing costs for the business.

2 The reduction of administrative burdens:
For example, for class C purchases, we know that around 5% of so-called “spot” purchases represent 75% of the creation of accounts payable, i.e. a considerable waste of time. When it would be better to allocate this time to the core business of employees for greater added value in the company.

3 Optimization of business processes:
Outsourcing will also lead to the optimization of company processes thanks to the reduction of actions to be implemented to place orders but also better order tracking (in particular for spot purchases) the speed and simplicity of placing an order with a supplier without wasting time looking for and creating it.

After the establishment of theprocurement outsourcing In a company, on average, there is a decrease in TCO of around 70%. In addition, we observe that the cost increases on average from €150 to €44 and the time spent processing this order decreases by 60%, we then go from 148 minutes to 59 minutes.
All these advantages have prompted more and more companies to turn to outsourcing procurement over the past ten years.
The question that arises is: Why not you?

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