Maximizing Savings And Efficiency With Managed Services
Managed Procurement Service
business today are pressed on all sides to reduce spending and streamline operations, while continuing to produce efficient results. The need to analyze procurement processes to identify areas of savings is especially pressing in times of fiscal restraint. Managed services provide an answer to this fiscal dilemma. By engaging in managed services, companies are reducing co-sourcing, procurement process cycle times, and contract prices though effective supply chain management.
Given the oft-overlooked benefits to utilizing managed services procedures, executives in the finance departmentshould consider such programs to achieve cost savings and efficiency gains. In order for executives to successfully implement managed services solution, however, the first step is to understand the basics of managed services.
What are Managed Services?
Managed services involve outsourcing companies procurement and supply chain management processes to third-party provider. These services enable organizations to analyze, negotiate and manage contracts and suppliers on their behalf, as well as coordinate and track purchases.
Managed services providers work diligently to identify process inefficiencies and cost savings opportunities. These companies also have access to updated purchasing data as well as strategies to secure the lowest prices on goods purchased. As result, organizations are able to maximize their structural efficiency, reduce costs associated with commodity purchases, and simplify the negotiation process.
How Do Managed Services Work?
Managed services companies employ various strategies to ensure cost savings and process optimization. In general, there are four main phases within the managed services model:
1. Process assessment The managed services provider works with an organization to assess current procurement processes and identify areas of potential cost savings.
2. Negotiation Once identified areas of costs savings are established, the managed services provider negotiates with suppliers to secure the lowest contract prices and sourcing terms.
3. Sourcing After securing the lowest prices, the managed services provider works to source the contracted goods.
4. Project management Lastly, the managed services provider coordinates and tracks the purchased goods, ensuring that everything is delivered on time.
Advantages of Managed Services
There are numerous advantages for business that choose to utilize managed services. According to recent industry surveys, companies are able to achieve, on average, 20 percent cost reduction on procurement and supply chain management processes.
In addition to lower costs associated with purchasing, managed services can reduce the cycle time of the procure-to-pay process by up to 40 percent. This accelerated process enables organizations to expedite the acquisition of needed goods, reducing the chance of project delays.
Furthermore, managed services programs are highly beneficial in assisting executives manage and track purchasing cycles. By combing industry data and trends with automated tracking tools, Vinessorequires minimal manual tracking for delivered goods.
Conclusion
In the competitive modern business economy, companies are looking for ways to streamline operations and reduce costs. Managed services provide valuable solution to these problems. By allowing organizations to tap into the expertise and resources of an external provider, it is possible to reduce procurement processes and save money.
Executives in the finance departmentshould consider managed services solution when looking to maximize savings and efficiency. Such programs can give companies increased access to industry purchasing trends, greater negotiating capabilities, and improved supply chain processes. All of these benefits ensure that organizations can remain competitive within their industry, while achieving greater cost optimization.
