For the majority of MSMEs, purchasing decisions are made internally, and the task frequently falls on the shoulders of the founder or, if theyre lucky, a procurement manager. This purchasing expert is under a great deal of pressure. They have a significant influence over how long your companys monthly expense list will be.

It might involve purchasing brand-new computers or printers or locating raw materials for the company. Since they can only speak to one manufacturer or supplier at a time, the process is undoubtedly time-consuming and frequently more expensive. It is smarter to outsource the procurement function, as it ends up being cheaper and a better use of time. Additionally, businesses that outsource procurement grow more quickly and are more profitable than those that keep everything in-house.

Here are 4 benefits of outsourcing your procurement-

1. Cost Reduction

The new process improvements and efficiencies typically result in operating cost reductions of 15 to 20 percent for businesses that outsource purchasing functions. Category experts with sourcing experience that may go beyond what your own organisation has access to are available from procurement outsourcing providers. More spending is managed and more money is saved when these categories are given a special focus. In order to maximise the benefits of external procurement, first get an idea of spending by category. Make a note of the different spending categories. Then, consider how many of these transactions there are and how frequently you buy each item. This information will help you decide whether you can get a better deal on your purchases or buy a better product for the same price.

2. Increased efficiency and concentration

You can change the focus of your procurement department by outsourcing some procurement-related tasks. The team members have the opportunity to reevaluate their responsibilities when a third party handles the supplier search and contract negotiations so they can concentrate on other sourcing initiatives or core competencies. A third party with established vendor relationships, like a group purchasing organisation, can quickly apply their process to numerous categories.

 3. Uninterrupted Expertise

In situations where no future plans or costs would rationalise an internal resource, outsourcing also gives the company access to highly qualified procurement experts. In exchange, it gives the business access to highly qualified procurement experts who frequently have access to vast and pertinent networks. Additionally, in a smaller organisation, a core function may be jeopardised by interruptions in procurement and reorganisation of duties brought on by firefighting situations. So it only makes sense to let the professionals handle that.

 4. Better prepared for change

The pandemic taught us that it is more crucial than ever for procurement to be able to change with the times and mitigate supply chain risks. Organizations can access resources from multiple sources and be better prepared to fight supply chain disruptions by partnering with third parties for certain procurement functions. By outsourcing procurement, sourcing teams can more easily adjust to change while maintaining business continuity.

NetBenefit is a tech-enabled B2B procurement specialist that focuses on being an ally to MSMEs. We work with businesses of all shapes and sizes to save money, time, and effort. Enquire now to learn how partnering with us will streamline your procurement functions and take your sourcing strategy to the next level.