Snapshot on Services Procurement – There are Savings!

Sometimes procurement services is a bit different than the standard purchasing of products and materials.  Often it is not transactional so strategic planning is imperative.   There are ways to cut costs in any industry without sacrificing quality. As the Procurement practitioner you need to devise best methods to sourcing and procuring services which will yield best value for your spend as possible.

Lowering Travel Costs

It’s no secret that Travel is in most organisations top 5 discretionary costs, as at some point you require your employees to travel for business.. Business travel can be incredibly expensive if not managed well simply because it can be costly to obtain Air fares, ground transport, and accommodation. However this problem can be gone with proper management of a travel program. The introduction over the years Travel Management companies and the advancement of web based technology has given organisations the ability to manage their travel cost more effectively.  Travel Managers can now manage, influence and govern their travelling employees. The introduction of web based booking tools have proven to be of most benefit. . For one thing, it provides you the ability to enforce travel policy, set out travel arrangements including your discount pricing with Airlines, Hotel and other services and most importantly capture spend activity.  The key to a successful travel program is to have in place a travel management company that can assist you put in place and carry out your organisation’s travel policy and assist you with other travel supplier arrangements.  They also play a part in capturing your spend data which you can use to manage your program.  Online booking solutions allow you compare rates, select best scenarios and most importantly to your suppliers influence purchase towards their inventory, that way being a win/ win outcome.

Temporary Personnel

Procuring services can extend to hiring temporary personnel. Hiring employees can be a strain on a business budget, because when it comes down to it, employee cost sits on of the top of operational costs within many organisations.  Further there certain roles within an organisation which have high turnover and/or lend themselves to short term assignments.  As such procurement departments need to consider how it can support its organisation with is employee strategy and hiring process. There are many temporary agencies that hire individuals looking for jobs and use them to place within organisations as required. Consideration needs to be given on how this contingent labour as often referred is handled within an organisation.  Often temporary employment agencies derive a commission on the placement of individuals within an organisation.  These arrangements need to be set out as an initial step and well managed over time.  There are specialists’ agencies that place individual eg mechanics, specialised labourers and general agencies that you can utilised to find stuff.  In a downturned economy, temporary labour strategy also assists in managing cost strategies such as rightsizing and restructures. Hence business of all sizes needs to consider this category and the specific strategy they wish to pursue.  For the larger organisations the set up of accredited provider panels also needs to be considered, not only for cost savings but also for quality and risk management purposes, in particular if there is large scale placement across the organisation.

Hiring Consultants

There are many during the course of business that an organisation requires the need for specialised services of individual practitioners or group to come into a business to execute business strategy and or work on a specific specialised aspect of a business.   Your employees may not have the skill, required knowledge or experience to deal with certain aspects of your business. These are people who have been where you are now, and they will be able to tell you how to get the best from and/ or transform your business.  This is where the hiring of specialist consultants is best value and although a consultant can be very expensive, they are infinitely cheaper than allowing a business problem  sit and fester. That said consultants’ needs to be managed, and organisations need to consider how they select and place consultants within their organisation. There are consultant directories, companies, and many other venues for hiring. Consultants can be paid either up front, in installments, or at the end of the job depending on how happy you are with the results. They real key is how select and set out the business brief for a consultant to execute.  A lot of organisations select and hire consultants without providing them proper brief, closed instruction and clear service delivery expectations.  Moreover do not properly manage expectation once consultants are in place.  For larger organisations accredited/ approved panels of specialist consultants should also be strongly considered.

Printing

Printing is an incredibly important part of any business. Businesses need to print   brochures, paper advertisements, or any number of other projects for the running of their business. Their many options available to run your print category and this is dependent on the size and nature of you print requirement.  Of course you can print these yourself, but this can prove quiet an incredibly expensive exercise  To cut down  on costs you can make use of off-site printing services. There are certain stand alone printing shops that support printing of any size business and can provide service at very low costs.  There are also Print Management Companies that act as agents for companies and run their printing requires.  These agencies are typically utilised by larger multi business organisations that require large scale printing.  These agencies can be run remotely or in house to an organisation.  Procurement practitioners need to make sure that they are aware of what is best fit for their business and to select the most cost effective business operation.

Tips for Cutting Costs

1. Lower Travel Costs by booking online via a TMC
2. Use Temp Agencies to reduce worker costs and benefits
3. Outsource various back office tasks to third party companies
4. Hire Consultants to as your employees with specialized tasks
5. Advertise through Back links and Article Creation
6. Make use of Print Shops and Print Management companies

As you can plainly see, there are many ways that you can save money in your business while doing your everyday workload. Times have changed and things have become much cheaper. In this economy, it is important to have many different ways of costs cutting and saving money.