The struggle with procurement BPO has typically been the belief that either moving labor from higher to lower cost regions, or re-badging employees from corporate to a BPO provider, would alone be enough to achieve results.
This is especially the case where BPO providers streamline transition costs over the duration of a multi-year contract, allowing the BPO customer immediate cost savings and limited (if any) upfront payments for resource investments. The results are often a “one-time” savings, the sourcing general who masterminded the deal is flavor of the quarter, and everyone goes back to their daily grind.
When the sourcing general eventually realizes she or he needs to make additional investments in process transformation and technology, they find it exasperating to go “back to the well”. The CFO is hunting for that next bite of cost-efficiency and is shocked to learn they should have made some discreet investments in their BPO engagement from the onset. Costs are always like hedges… if not carefully managed, they grow back with a vengeance.
To tackle the issue we teamed up with HfS Expert Contributor, Jason Busch of SpendMatters fame. Jason also assumes the role of senior advisor for the coveted HfS Single-Malt Foundation, where he has excelled in his duties.
Lo and behold, our research suggests that this type of behavior, along with other indirect spend challenges, ultimately resulted in many initial BPO endeavors targeting indirect spend inside companies to come up short.
This is must-read stuff…
Head over to SpendMatters to read the report. Now.