Aberdeen Group Examines Procurement Outsourcing

Companies are taking a cautious approach to outsourcing their procurement functions, according to new research from Aberdeen Group. A survey of 750 supply-chain executives shows that 43% outsource certain procurement processes or spend categories, with larger, more-experienced enterprises showing a greater likelihood to outsource. Another 15% say they plan to outsource procurement functions in the next three years. However, most companies that have outsourced procurement have done so with less than 20% of their total spend, and most of the relationships focus on non-production spend categories, the Boston-based research and consulting firm says. However, firms that do outsource have indicated benefits. According to Aberdeen Group, average benefits include an 18% reduction in prices paid for goods and services and a 25% decrease in procurement administration and automation costs. The online survey was conducted in February via Aberdeen Group's supply-chain-access community, www.SupplyChainAccess.com. The online research was supplemented by telephone interviews. Additional details and analysis of the survey are available in "The Procurement Outsourcing Benchmark Report," available for download at the Aberdeen Group Web site. Registration is required.