Procurement outsourcing can deliver competitive advantage, argues Arkphire’s Naylor
14 March 2016 | 0
Leading organisations have already outsourced a major chunk of IT services, testing and proving that outsourcing works. Companies are now focused on outsourcing their business processes to a specialist as they feel that most transactional activities done today are non-core in nature. With the rising pace of technological advancements, it has become easier to manage and execute business processes from any part of the world where good infrastructure is available. This has become an increasing focus area for CXO’s to carve out core and non-core activities and outsource through a managed services model using third party providers.
Procurement’s role is rising in strategic importance. It has become a board level discussion. Executives are now charged with looking to improve cost, productivity and shareholder value. This is because a typical organisation can spend from 40%-50% of its revenue on procured goods and services, meaning any reduction in this spend will have a direct impact on the company’s bottom-line. With an increased senior management focus, comes a highly elevated performance expectation. Procurement leaders are therefore looking for external help in sourcing and securing non-core services from an expert.
Arkphire has experienced phenomenal growth — more than 300% since 2011. This is largely due to the focus placed, back in 2010, on the provision of global procurement solutions for the multinational community. Arkphire’s investment in this niche means the company now enjoys the advantage of doing business with 6 of the 10 largest multinationals in Ireland.
With a clear focus on driving cost out of procurement through vendor certification and management, combined with supply chain and inventory management, Arkphire offers three simple reasons supporting its success in the provision of global procurement services:
- A seamless service
- One of the strongest and most talented technical teams in the industry
- Enabling customers to focus on what actually matters – their business
From its experience, Arkphire has ascertained multinational companies typically require:
- Procurement of corporate, production and data centre IT products
- Configuration and implementation of an integrated multivendor solution or have individual components deployed dependent on IT standards
- Management of global bids, building and verification of BOMS and configuration of TCOs
- Source and deployment of a range of hardware and software for the enterprise from a range of vendors, hence management of vendor relationships is key
- A partner with extensive knowledge in multinational engagement, computer networking and rack configuration
Arkphire has gained vast experience in managing the global bid process for multinational engagements. This typically includes asset sourcing, registering, tagging, deployment and reporting; compliance, auto replenishment, testing products, imaging, staging, rack build, spares inventory, remote systems management, on-site resourcing, vendor management and full project management. This is all supported by an IT helpdesk team.
Procurement outsourcing (PO) is going to become an inevitable strategy for companies in gaining competitive advantage. It will achieve this by lowering the cost of operations and creating value.
Adoption of procurement outsourcing is growing at a pace of 22%, which is a strong sign that organisations are moving towards PO as a strategic value creator. With increased adoption of technology and standardised processes, leading organisations have already adopted procurement outsourcing as a strategic initiative towards achieving process excellence and gaining supply management leadership.
Paschal Naylor is managing director of Arkphire