By now you will already be familiar with our corporate virtualization research, showing that the average company now spends around 70% of its revenues with suppliers. But what does it mean for your business, and how can you uncover the opportunities that this trend encourages?
Business is a fishing contest
Externalization means that your company is now an island, surrounded by a vast sea of suppliers. Procurement teams are like anglers; sent to the water’s edge to painstakingly fish for suppliers from this sea of virtualization. Those who catch the biggest fish (the best suppliers) can feed the business objectives. But as business diversifies, suppliers multiply, and more and more operations are being outsourced, this becomes an increasingly difficult task.
Wading into deeper waters
Procurement departments are often over-stretched, under-invested, and under-developed. An in-house procurement department cannot possibly have all the knowledge and resources to identify, source and manage thousands of suppliers across hundreds of industries. And as they wade out into deeper, unchartered waters in search of suppliers to best meet business demands, several problems occur:
- Big opportunities for new ideas and innovation are missed because there isn’t the internal knowledge or infrastructure to manage such vast areas of external spending
- The level of external risk is increased as procurement struggles to have full visibility of the vast array of suppliers
- Millions a year are lost or wasted when procurement teams fail to successfully align their operations with the wider corporate aims
- Effective and collaborative supplier relationships are not built while the team remain under-resourced and under-appreciated
Procurement teams begin to drown as complex problems and demands increase.
Our procurement Ebook explores these challenges, offering insight into how effective sourcing and management of your suppliers can improve profit, increase innovation, and drive competitive advantage; allowing you to safely navigate to a successful outcome, while leaving your competitors all at sea.
Download a copy of the free Ebook here, and let us know your thoughts in the comment box below