The 2011 European Shared Services & Outsourcing Week Event Wrap Up
Posted by Chris Gayner on Mon, May 16, 2011 @ 06:48 AM
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Last week Proxima attended SSON’s European Shared Services & Outsourcing Week to find out how high procurement really is on the outsourcing community’s agenda and what the opportunities are for greater focus on procurement within global business services.
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While understanding the importance of supply chain risk, assurance and quality from Direct procurement – many attendees admitted to underinvesting time and money into Indirect procurement. More over, many of the attendees acknowledged that there were huge opportunities (monetary and operational) to be sought through Indirect procurement, but that existing skills, experience, tools and overall capabilities were inhibiting them to realising the benefits.
Procurement Outsourcing – The Opportunity for Business Services
The G6 session, which was a panel of industry voted thought leaders, quickly moved through the introductions and pleasantries to a feisty debate around what was missing from today’s outsourcing leaders’ skill set.
The discussion focused around how BPO professionals defined outsourcing in terms of lift-and-shift outsourcing (moving transactional processes to a more cost effective location – usually offshore) and automation (streamlining and automating processes to cut out human touch points). This ongoing pursuit of efficiency has resulted in many organisations failing to recognise effectiveness gains achievable across knowledge-led functions, such as procurement.
Tom Bangemann, VP Business Transformation at The Hackett Group, advised that procurement as a business service not only has the ability to influence a large chunk of business expenditure, but can change the very behaviours of internal and external stakeholders. However, it requires a completely new skill set and expertise to drive and manage – with a greater focus on delivering ‘value’ back to the stakeholder and not just doing things quicker or more efficiently.
The G6 session reiterated that while efficiency gains were always going to be part of the outsourcing equation, there was a dire need for a more strategic mindset focusing on value. Many that have dabbled in improving their Indirect procurement have fallen way short of realising its true potential, either because they have focused purely achieving efficiency gains, or because they have tried to apply what works for their Directs on their Indirects – and the two require very different responses.
Discussions over the course of the three days highlighted the inability of many outsourcing professionals to articulate the true benefits that procurement outsourcing can deliver in comparison to Finance, IT, HR outsourcing – which in many cases the ROI from procurement outsourcing is multiples of that achievable in Finance, HR or IT.
Overall, our conversations were consistent: procurement outsourcing is an untapped source of huge potential, which many attendees were looking to explore over the coming months.
If you would like a copy of our presentation from the event, please email info@proximagroup.com and we’ll get it out to you.
Related Link: SSON’s European Shared Services & Outsourcing Week: Final Thought
G6 panelists hoisting up Tom Bangemann