Challenges of procurement outsourcing

Filed in archive Research on December 19, 2007

In the recent years, the wave of outsourcing has also reached procurement and many organizations have considered procurement outsourcing as part of their procurement transformation programs. They usually have different motivations for doing this which as the most important ones we can mention: Improved pricing, lower headcount, lower procurement cost and higher spend visibility. But there are a number of challenges which exist in such processes:




According to a fresh research by Aberdeen Group, Procurement outsourcing, unlike other procurement transformation programs, might cause lots of extra loss at the end. The reason is that procurement groups often don't have the competency needed to effectively manage the relationships and this leads to a loss of control over procurement activities.

That's why it is seriously recommended to conduct a maturity analysis prior to pursue such strategies.