Procurement has become such an essential part of every business that it requires its own team and strategies.
Inevitably, many SMEs are trying to keep up with the market’s ever-changing expectations and dynamics. In addition, they turn to independent, third-party companies that are known as procurement service providers (PSP).
You can hire these companies in your time of need to supplement or even take over on-site procurement operations. Here’s how to choose one.
1. Define Your Needs
Procurement initiatives are only as good as the people that support them. What are the areas where your existing procurement team falls short? What skills do you lack that would help you greatly improve procurement?
You can better determine the needed talent or skill in prospective hires if you take the time to analyze the strengths and weaknesses of your team. This brings us to the following point.
2. How Much Do You Want the Provider to Be Involved?
The initial evaluation will help you identify the type of partnership you want to have with the procurement service provider. Do you want the PSP to simply replace, support, and supplement your current staff, or do you want them to handle all procurement needs?
Regardless of the solution you choose, the next question is whether you’ll continue PSP activities offshore or onshore.
3. Domestic or Foreign Providers?
For many businesses, outsourcing to another country makes financial sense. Many companies outsource their operations to a procurement service provider in India or China, where labor costs are drastically low.
Many administrative jobs that can be completed remotely are outsourced to offshore companies. Meanwhile, local procurement service providers manage the practical side of procurement, like sourcing.
Like any other hiring process, you need to take your time when finding a procurement service provider. The ideal PSP with reasonable costs and enough flexibility to fit your needs and goals can be valuable beyond measure.