The Future = Indirect Procurement

Many of us in Procurement would have to admit: we love 'buying bits for production'.

A glimpse under the covers at Xchanging reveals that Indirects constitute the vast majority of what is outsourced. Why? Because companies consider their Directs as core, and would never outsource them. But whether handled in-house or outsourced, there is a job to be done by Indirects buyers - and in just about every business. This is good news.

It seems that the future for career-minded buyers may indeed lie in Indirects. So what's in there? The key categories include:

IT, Telecoms, Facilities Management, Property, Travel, Fleet, Professional Services and Labour

Positives

• Longevity. Whereas (at least for the First World) Manufacturers face a continuing threat from low cost producers, the Service sector is relatively secure. The Indirects they buy will always be required.

• Transferable skills. Buying IT or Legal Services is pretty similar, irrespective of the business type or sector.

• Coverage. All businesses need Indirect goods and services - including manufacturers, retailers, and the Public Sector.

Differences

1. Finding the customer. With Directs it is usually pretty easy to trace an e2e line through Production right through to the end consumer. For Indirects there exists a multitude of ownership and responsibility models across different businesses.

2. Budgets. Rarely an issue for Directs buyers. But in Indirects you are helping the budget holders to get value for money.

3. Understanding Supply. For Directs this is usually about getting to grips with the supplier's manufacturing process (and costs) and then optimising the inbound supply chain. This also applies to some Indirects but more often it's about specifying and then getting great service and then measuring it.

Fortunately, there still exists significant local and regional capability in most categories so it’s not impossible to develop a multi-tiered supply structure. Negotiating a transition from Directs to Indirects can be problematic. It’s easy to get pigeonholed. But it definitely makes good sense to develop one's skills and experience in this area, with a view to a long and prosperous career – so what are you waiting for?