What’S The Right Way To Approach And Implement Managed Services Procurement?
WHAT IS A PROCUREMENT COMPANY
Organizational success is intertwined with the procurement process and the capacity to effectively source and acquire the right products, services, and supplies in an efficient and cost-effective manner. As part of the larger finance department, the procurement team works hard to ensure that the organization can continually secure the supplies it needs to forge ahead and remain competitive. However, in an increasingly complex and ever changing business environment, these teams are often strapped for time and resources, leaving important individuals such as the CFO struggling to find the best solution to manage the external procurement process for their organization.
Managed services procurement provides the solution. By finding and validating the correct suppliers, and strategizing and executing the completion from solicitation to payment, managed services procurement allows the organization to maximize its time and resources while also reducing costs and ensuring compliance. This article is designed to help CFOs and other executives understand the key steps and processes involved with correctly introducing and implementing managed services procurement.
Determine the Type of Supplier Needed
The first step in the procurement process should be to identify the type of supplier needed to fulfill the organizations requirements. CFOs need to make sure they work together with their procurement team to properly assess and analyze their individual needs, as well as their current supplier database. It is also important that executives seek out and have access to database of suppliers in fields such as transportation, telecom, and energy, as well as software and other technology solutions. By taking deep-dive into the organizations supplier database, CFOs and their teams can identify differences between the suppliers being used to provide solutions for different needs, as well as strategically assess their current and future ways of working.
Identify the Benefits of Managed Services Procurement
Once the supplier types have been identified, it is important to examine the benefits of managed services procurement and assess whether it is the right solution for the organization. While it is not necessarily new concept, managed services has become increasingly popular in the past few years due to the advantages it offers, from improved turnaround times and cost savings to more flexibility in managing the procurement process. Other benefits include improved supplier management, access to market intelligence and analytics, improved compliance and audit coverage, as well as increased visibility into the overall purchasing process for internal processes. Executives should consider whether these potential benefits outweigh any potential costs.
Identify the Right Managed Service Provider
After assessing the potentials of managed services procurement, it is time to find the right managed service provider. The provider should be chosen based on the organizations needs and the supplier database they have identified during the early stages of the process. CFOs should look for providers that dig deep into their existing supply chain to find the appropriate and compliant suppliers, as well as provide data and market intelligence to help their team negotiate better prices and terms. They should also evaluate providers based on their experience, pricing models, and ability to integrate into the organizations existing procurement processes and systems.
Create Collaborative Framework
Once the managed services provider is selected, it is time to create collaborative framework that outlines the specific roles and responsibilities within the managed services procurement process. This includes tasks such as creating requests for proposals, gathering market intelligence, and negotiating the terms and conditions of each transaction. Along with this, the framework should also include an agreement between the organization and the selected managed services provider that outlines the agreement between each party, and timeline of the delivery dates and completion of each process.
Integrate the Provider Into Existing Systems
The final step is to integrate the provider and their solutions into the organizations existing systems and processes. This should include both financial systems such as the Accounts Payable and General Ledger, as well as inventory and supply chain management, as well as any other systems that the provider can provide. This will allow the organization to gain greater visibility into their procurement processes and gives the CFO the ability to control their organizations spending and better manage risk.
Conclusion
Managed services procurement can provide CFOs and their organizations with the tools and solutions they need to effectively manage the procurement process, from finding the right suppliers to ensuring that the processes are compliant and cost-effective. By following the steps outlined above and working together with an experienced managed services provider, organizations can realize the benefits of relying on managed services for all of their procurement needs.
