Procurement Outsourcing

RISKS ASSOCIATED WITH PROCUREMENT OUTSOURCING

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It is difficult and expensive for businesses to keep up with the fast-paced and changing market. For this reason, organizations are turning to procurement outsourcing as a solution. Procurement outsourcing allows businesses to spend more time adapting their operations for long-term change, whiles the outsourcing partner handles the non-core activities. The demand for outsourcing in procurement is growing because of its ample benefits for businesses but the perceived risks involved are also putting many off taking the leap. This post will examine three of such risks and detail how McCallys can help mitigate such risks.

Lack Of Control

Business processes that were previously executed by staff when outsourced to external agencies at most times leave businesses with little or no control over it. When these processes are mismanaged by the service provider, it can affect the quality of service the business is normally known for.
In instances where distance is a factor, in-person meetings and inspections become difficult, leaving businesses to rely solely on virtual communication. This can make performance and productivity monitoring challenging.
At McCallys we ensure our clients are well aware of everything at every stage of the process. With a well-thought-out plan and project management measures like timelines for meetings, KPI’s and other metrics to help track our performance, we ensure our clients are always in the loop.

Unforeseen and Hidden Costs

The primary reason most organizations outsource in procurement is to gain a competitive advantage through cost savings and profitability. More often than not, businesses patronizing procurement outsourcing services are blindsided with hidden service costs. This is quickly becoming a risk most businesses are not willing to take. To help your business mitigate that risk, McCallys employs productivity management tools, a clearly defined system that spells out project expectations and requirements. We ensure our clients are aware of all foreseeable costs involved with projects thereby reducing the risks of hidden and unplanned costs.

Security and Confidentiality

Companies are at risk when outsourcing in procurement. Sensitive processes are often partially or completely exposed to an outsider. Though the chances are low if companies hire a reputed company like McCallys, there’s always a possibility that the third-party organization might steal/leak valuable information or trade secrets. To deal with this security risk, McCallys insists on an airtight outsourcing contract or SLAs (service level agreement) to protect your organization.

In conclusion, although there are risks involved with outsourcing in procurement, they are not unavoidable. McCallys helps mitigate the risks through proper company practices and adherence to strict moral codes. We insist on building a strong working relationship with our clients and also put clear guidelines for the work being carried out.  Our communication process with our client will ensure that outsourcing benefits the organization on a long-term basis. With McCallys, the benefits of outsourcing in procurement can outweigh the risks.
Check out the benefits of procurement outsourcing in this post...click here

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