Business

What does outsourcing indirect procurement mean for my business? 

You have probably heard of outsourcing indirect procurement for your organisation before. What exactly is meant by indirect procurement? What benefits does it bring when you have it outsourced? You will get answers to all these questions by reading on quickly.  

What exactly is meant by indirect procurement? 

Indirect procurement refers to all purchases that support the core activities of your organisation. Think of the costs you incur on energy bills, maintenance, but also consider costs such as temporary workers or office supplies. Indirect procurement is also referred to as NPR. NPR is an abbreviation for Non Product Related.  

What are the benefits of outsourcing indirect procurement? 

Outsourcing indirect procurement can bring several benefits. Chances are your organisation has a large supplier base. Probably the administrative department spends a lot of time on this. Because if you have many suppliers, you also have to keep in touch with all of them. This also means that you have several different payment terms. By outsourcing indirect procurement, the supplier base will be reduced to 1 big supplier. This means you will have only 1 contact point, 1 invoice and 1 payment term.  

In addition, it is advantageous for your organisation to outsource indirect procurement, because it allows you to keep more control over procurement. This gives you more time to focus on strategic purchasing or other areas that are still on the agenda for optimisation. As a result, you can allocate your time efficiently and purposefully. 

Furthermore, it brings benefits because it allows you to reduce internal costs, saving up to 21%. The money you thus save can also be used and/or invested more efficiently, just like time.  

What does this mean for my organisation? 

Outsourcing indirect procurement can mean a lot to your organisation. In particular, this involves time and money you can save. It will do your organisation a lot of good. The time and money you save can be put into other areas to improve any other production processes.  

The entire process can be optimised from invoice management to the source to pay process or the procure to pay process. The source to pay process is the entire process from sourcing to payment. Procure to pay involves the process from ordering to payment. These processes can also be outsourced.  

Lower the TCO 

All in all, it means that you will lower your TCO. TCO is an abbreviation for Total Costs of Ownership. This refers to the total amount of costs of purchasing and owning a product or service throughout its lifecycle. So for your organisation, this means that you will save time and money that you can redeploy efficiently and purposefully.  

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