Often BPO is used by Procurement as a means of applying labour arbitrage, exporting a bundle of processes and activities off-shore, for these processes then to be optimised overtime.

Some use BPO as a means to augment procurement resources and cover more spend. However few use BPO as a strategic lever to “drop in” a new best in class business process that will resolve current inefficiencies and secure Procurement is involved in the right places throughout the purchase cycle.

Procurement professionals can buy best practice processes for specific business activities (or spend categories), like Fleet, Travel, Resourcing, or FM. Proven solutions that have Procurement embedded in the right places of the business cycle, and with the visibility to manage the supply base for continuous improvements.

Take for example Resourcing Process Outsourcing (RPO), often offered by recruitment companies, followed by Outsourcers specialising in off-shoring. RPO often creates a “black box”, from which Procurement can only influence via audits. This puts procurement in a difficult position. After the honeymoon period is over. The better alternative is to have Procurement inserted at the right stages of the process, and make sure the suppliers are engaged in win-win solutions that incentivise them to offer best value. Xchanging offer a vendor neutral process, where we manage the supply chain from start of hiring to payment to the contractors. We ensure this is done efficiently to a high service standard. Along the way we manage compliance to policies and save our customers money by ensure accuracy in billing. We work with the supply base in a collaboratively to create win-win situation been the suppliers and our customers. We don’t focus on reducing the agencies mark-ups on candidates, but rather on incentivising them to find the best value candidate for the customer.

Another example of where BPO can solve procurement challenges is FM outsourcing. A full outsource of the FM portfolio also creates a “black box” which is difficult to un-tangle. It also creates a challenge around spend visibility, not allowing finance or procurement to understand the drivers. We manage the back-office financial processing for our clients in the FM market, covering transactional and administrational tasks from Vendor set-ups to Payment, including all the financial reporting. Our standard platform services are able to deliver clear tracking of budgets and spend across the portfolio. Most finance and procurement functions recognise the challenge in obtaining granular visibility of the spend across a real estate portfolio. “Drop-in” Xchanging’s platform services and achieves full visibility to track budgets and compliance to the procurement strategy.

Furthermore, we are seeing emerging interest for complete “drop-in” Procurement solutions, inclusive of people, processes, and technologies, across all categories of spend. These solutions enable our customers to drive procurement value across their businesses to an accelerated timetable, as opposed to building from scratch or adding to legacy business processes

Procurement professionals can apply BPO to act quicker in the value delivery, while becoming strategic contributors to their businesses.