Enterprises Require End-to-end Procurement Outsourcing Services

Boston — January 17, 2007 — Enterprises continue to undertake indirect procurement outsourcing initiatives, but a failure to achieve internal compliance in parallel with improved supplier management is driving lingering dissatisfaction with these programs, according to a new study from NelsonHall, the business process outsourcing (BPO) analyst firm.

"Organizations believe that they have negotiated favorable discounts from suppliers, but dissatisfaction with the overall cost-effectiveness of their indirect procurement services persists since the level of centralization of indirect procurement remains low and they continue to lack visibility of spend across the enterprise," said Rachael Stormonth, research director at NelsonHall and author of the study.

In the study, "Indirect Procurement Outsourcing: Customer Requirements," Stormonth, provides an assessment of global indirect procurement business issues and attitudes towards how these issues need to be addressed.

Key Challenges

The major indirect procurement challenges for organizations revealed in the report include:

  • A strong corporate requirement to reduce the cost of indirect goods and services;

  • Difficulties in managing large numbers of suppliers in the absence of adequate breadth of internal category management expertise;

  • Difficulties in managing large numbers of suppliers in the absence of common indirect procurement systems, processes and interfaces;

  • Lack of indirect spend visibility.

Compliance Comes Second