Comments on: Could Billions Be Saved By Best Practices And Supporting Technology? http://www.esourcingforum.com/archives/2006/12/07/could-billions-be-saved-by-best-practices-and-supporting-technology/ The source of information and best practices in strategic sourcing. Fri, 05 Dec 2008 08:13:33 +0000 http://wordpress.org/?v=2.6.2 By: Eric Strovink http://www.esourcingforum.com/archives/2006/12/07/could-billions-be-saved-by-best-practices-and-supporting-technology/#comment-4031 Eric Strovink Thu, 07 Dec 2006 20:12:07 +0000 http://www.esourcingforum.com/?p=327#comment-4031 The key point is this: If current procurement processes are labor-intensive, and they cannot be changed, then moving those processes to a venue where labor costs are lower will save money -- so long as there are no disruptions or problems caused by the dislocation. If, on the other hand, the focus changes to re-engineering procurement processes intelligently -- using e-sourcing and e-procurement tools effectively, for example, and/or using BPM tools to systematize previously ad-hoc activities -- then the savings opportunity may be much greater. The winners of the procurement process insourcing/outsourcing race will be those companies and BPO vendors who become best-in-class at injecting value and intelligence into the process. If tying a shoe is necessary, then tying a shoe less expensively will certainly save money; but avoiding tying the shoe in the first place wins the prize. The key point is this: If current procurement processes are labor-intensive, and they cannot be changed, then moving those processes to a venue where labor costs are lower will save money — so long as there are no disruptions or problems caused by the dislocation. If, on the other hand, the focus changes to re-engineering procurement processes intelligently — using e-sourcing and e-procurement tools effectively, for example, and/or using BPM tools to systematize previously ad-hoc activities — then the savings opportunity may be much greater.

The winners of the procurement process insourcing/outsourcing race will be those companies and BPO vendors who become best-in-class at injecting value and intelligence into the process. If tying a shoe is necessary, then tying a shoe less expensively will certainly save money; but avoiding tying the shoe in the first place wins the prize.

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