Procurement: Insource or outsource that is the question

The problem with opinion is that everyone has one. By default, that means there are a great many to choose from or you could even be original and create your own. Just to complicate things the infamous ‘they’ are always close at hand ready to tell us what to think. This is a phenomenon known as ‘social compliance’ which sees people follow an action or a trend just because they are told by an expert (so-called) or led by the crowd.

We see it all the time in our everyday lives. Sometimes margarine is better for us; the next year we are being encouraged to tuck into the more naturally occurring buttery fats. Likewise, with the cause of our personality, is it ‘nature or nurture?’ or the great vinyl versus digital debate which has been playing out (in stereo) for many years. In one respect opinion is simply part of what makes us human and everyone should be entitled to theirs but in some instances, you can’t help but think there is an ulterior motive at work somewhere.

Who proclaims the best way to procure?

If you look back across the decades of spending in large commercial enterprises, you will see a pendulum effect determining purchasing habits. Depending on the mix of financial, political or market trends and influences at any given time it seems company’s policies change. At times, there is a big push to bring purchasing, particularly management functions, in-house. Then a switch in the mood or social sense seems to get everyone rushing to outsource. Is purchasing wisdom really a moving target, dependent on the environment or is there a universal ‘best practice’ that businesses could follow at all times?

Clearly the facilities management companies favour outsourcing, so maybe they are always pushing their agenda. From a purely ‘cost’ point of view, logic would dictate that using a company’s own personnel would save money – even if it became more of a management inconvenience. But ultimately, history shows us that most commercial organisations will simply follow the current trend.

Multi-sourcing! That is the answer!

As the great bard himself said, ‘This above all – to thine own self be true, and it must follow, as night follows day, thou canst not then be false to any man.’

The truth is that a company such as ourselves could also be seen to have an agenda. We supply a product that promotes multi-sourcing. Its primary function is the comprehensive management and simplification of complex insource and outsource supply combinations. Our business is making procurement easier, whatever methodology an organisation chooses to follow. So of course, we would say that multi-sourcing is the answer.

The reality is, however, that there will always be some purchasing and a portion of internal production or management in any business anyway. Bringing everything together harmoniously is the real key!

A truly cooperative procurement system that integrates every type of product and service a company might need through one purchasing portal becomes single-sourced multi-sourcing. It manages internal purchasing criteria, budget restrictions, compliance, efficiency and all the suppliers from one platform.

Using a procurement management tool like Geneus means that any organisation can choose the sources that they need, based on their own requirements and philosophy. It ensures overriding contracts are adhered to, all spend is within authorised limits and standards are met and maintained throughout the operation. We know we are biased, but we also know that managed multi-sourcing is the answer.

  • Share