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Outsourcing Sourcing - How does it impact you as a Category manager

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At an organization level, outsourcing benefits span across cost arbitrage, automation, compliance improvements, savings commitments, but how does it benefit you as a category manager?


If you are a category manager in an organization and have wondered how outsourcing of sourcing activities can directly impact you, this blog is for you. At an organization level, outsourcing benefits span across cost arbitrage, automation, compliance improvements, savings commitments, but how does it benefit you as a category manager in your day to day operations, is what is discussed ahead.

As a category manager, you would want to spend your time on building category strategy for your portfolio of categories, study the market trends and incorporate them into your category plans, manage a robust supplier management program, build on stakeholder connect and get involved in the strategic aspects of key sourcing events. Instead you may be spending more than 70% of your time in managing sourcing events, handling ad-hoc sourcing requirements, query handling, conducting SRM & SPM exercises and handling escalations. Sounds familiar? With sourcing outsourced, you can experience the following benefits directly impacting you:

  1. You can outsource all the small value ad-hoc sourcing requirements that come unannounced and take away a lot of your time. You would need to hand hold the outsourced team for the initial couple of requirements, but after that they would be fairly independent and you would be required to only do dipstick checks.
  2. For large sourcing events, you can out-task activities, depending on the sourcing plan. The activities may include market research and supplier long listing, suppliers capability assessment, preparing RFX pack, conducting RFX event online, building supplier assessment criteria, drawing technical and commercial comparatives, performing bid analysis etc. So, while you focus on overall managing the sourcing event, laying the ground rules, managing cross functional teams, draw an overall plan and tollgates, and taking key decisions, the outsourcing team can support with all the documentation, coordination and analysis.
  3. An outsourced provider has a team of sourcing resources supporting your organization. As a process, they mostly discuss the sourcing requirements and so it's a collective knowledge of a lot of sourcing professionals which helps in building and running a sourcing event. You get access to multiple thoughts and ideas by just reaching out to one contact point in the outsourced provider's team.
  4. The outsourced team may not have handled the type of sourcing event for your organization that you want them to conduct. This brings in fresh perspective to the event and often very useful new ideas to view the whole project in a different light. 
  5. Several outsourcing providers have a central pool of category experts, who stay abreast with category trends, and offer their expertise across sourcing projects for multiple clients, for e.g. Infosys BPO Center of Excellence and Commodity councils. You get access to all that knowledge and expertise as a part of your partnering. Owing to attritions and job rotations in organizations, it is highly practical that you are handling a particular category for the first time and are not really an expert on it. This is when the access to the outsourcing provider's knowledge pool is very useful.
  6. You want to manage a strong SRM / SPM program, but often fall short of time and resources. You are not to be blamed. While the concepts, the plan and the methodology of SRM/SPM does not take long, it is the implementation which is highly cumbersome and time consuming. Preparing questionnaires, getting data from systems and compiling, sending questionnaires to respondents and seeking responses, compiling information and arriving at performance scores, collation of data for periodic reviews etc. are the activities that require tremendous amount of effort. Unless you have a centralized SRM support from your organization, all these activities take a lot of your time. However, you can get all this done through an outsourced team.
  7. Sourcing processes in most organizations are governed by a set of rules and guidelines. Often, while running multiple events, compliance to rules and guidelines gets compromised, sometimes inadvertently. An outsourced partner, however, is driven by KPIs and 100% compliance to the process guidelines is critical. So, you can be rest assured that the process compliance would be taken care of, the audit trail would be maintained and documents repository would be in place. 
  8. If technology support is a part of the offering from the outsourced provider, you get access to state of the art tools, making your work simpler and smarter. Infosys BPO for example offers Sourcematix (in alliance with Newpoint consulting), a category management & strategic sourcing tool which provides a structured workflow, decision support and expert guidance on process steps.

If you are a category manager and have started experiencing outsourced support on sourcing, I would be anxious to know your views.

Comments

Khalid,in current scenario when sourcing organisation has to lot more to do including stakeholder engagement & supplier engagement with little resources and hiring difficult,outsourcing becomes a big boon

Brilliant write-up. Keep it up.

Great blog!The problem statement is very true for many category managers. The opportunities described can be used in full or part very successfully. The key for success is working in partnership, and as a team, and with outsourced partners as part of your own team.

A very informative blog Khalid,while it gives a wholistic view of the sourcing activities - strategic and tactical, it also brings out the numerous advantages of outsourcing sourcing activities encompassing all 3 categories - people, process and technology -important to any organization today.

Thank you Khalid, for sharing your thoughts with us. Very helpful. It also helps in addressing concerns of bribe. New corporate-bribary acts in EU makes it even more necessary.

nice article. very interesting. thank you for this.

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