How do you align the outsourcing strategy and objectives with the overall business and procurement goals?

1 Assess the current state

The first step is to assess the current state of your procurement function, and identify the gaps, challenges, and opportunities for improvement. You need to evaluate the performance, capabilities, and maturity of your procurement processes, systems, and people, and benchmark them against the best practices and industry standards. You also need to understand the strategic objectives and priorities of your business and procurement function, and how they align with each other. This will help you determine the scope, scale, and feasibility of outsourcing, and the expected outcomes and benefits.

2 Define the outsourcing strategy

The second step is to define the outsourcing strategy, based on the assessment of the current state. You need to decide which procurement functions and activities you want to outsource, and which ones you want to retain in-house. You also need to choose the outsourcing model that suits your needs, such as transactional outsourcing, category management outsourcing, or end-to-end outsourcing. You need to set clear and realistic goals and metrics for the outsourcing project, and align them with the business and procurement objectives. You also need to identify the risks and challenges of outsourcing, and how to mitigate them.

3 Select the outsourcing partner

The third step is to select the outsourcing partner that can deliver the best value and fit for your outsourcing strategy. You need to conduct a thorough market research and analysis, and shortlist the potential providers based on their capabilities, experience, reputation, and references. You also need to evaluate the providers based on their cultural fit, alignment of vision and values, and compatibility of processes and systems. You need to negotiate the contract terms and conditions, and establish the governance structure and communication channels for the outsourcing relationship.

4 Manage the outsourcing relationship

The fourth step is to manage the outsourcing relationship, and ensure that it delivers the desired results and benefits. You need to monitor and measure the performance and quality of the outsourcing provider, and provide regular feedback and guidance. You also need to review and update the goals and metrics of the outsourcing project, and adjust them according to the changing business and procurement needs. You need to foster a collaborative and transparent partnership with the outsourcing provider, and resolve any issues or conflicts that may arise. You also need to leverage the best practices and innovations that the outsourcing provider can offer, and continuously improve your procurement function.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?