Wednesday, 18 January 2017

Why choose a Procurement Consultancy to help your business?

Ed Cross, Executive Director of leading procurement consultancy Odesma shares his thoughts on why companies should be choosing procurement consultancies to help their business.

The question of using consultants remains straight forward for some, whilst for others, it results in a ‘not over my dead body moment’. The reason for this reaction is possibly myriad, from it being an affront to the capability of the individual affected or their function through to it being seen as a threat, a worry that the consultants will deliver and questions will be asked why the manager couldn’t have delivered the same benefit previously themselves - a sign of weakness?

The Japanese view every problem as an opportunity, literally an unpolished gem to be cherished. Recognising that no one has all the answers, and that often there are experts (internally or externally) that can be deployed to bring additional value is a characteristic of a strong leader.  

Using consultants is like using any expert on demand service (lawyers to plumbers), and should be used if they enhance value to the organisation well beyond their cost. 

For procurement consultancy especially when it comes to category management it has to be one of the simplest decisions, an equation looking at the cost of the consultants (and any extra work in eternally) versus the return in terms of price and cost reduction from third party purchases. Expressed as ROI (return on investment) there are few activities that are as straightforward to quantify as procurement related. Compare that to the ROI calculation for implementing an ERP system!

But what are the benefits of using external procurement consultants:

1.    Category and Market Knowledge

A seasoned consultant will have deep and current experience of the category, having sourced it numerous times previously - they understand the nuances, the options and how it can work for your business

2.    Speed

With specialism comes pace, with focus comes more pace, most consultants do not have to worry too much about internal politics, placing orders, managing queries, they can, therefore, make it happen quickly. At Odesma we expect a sourcing programme to take weeks, and not months and years for this exact reason.

3.    Change Management Experience

      The experience of working in different environments, and facing differing situations frequently creates a strong pedigree in knowing how to secure change effectively with stakeholders. 

4.   Return on Investment

Clarity around the baseline for the previous cost structure, a clear outcome with a new commercial position and therefore clarity on the return achieved for the investment. 

The argument around the use of consultants should be a simple one: focused on a clear ROI and whether it brings the organisation an advantage.

Ed Cross
Executive Director of Odesma
Tel: +44 161 433 7833

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