Buyers not outsourcing problems

23 April 2008
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24 April 2008

Buyers would rather outsource spend categories they are satisfied with, than those where procurement's influence or control is limited.

Research carried out among 70 firms found a correlation between categories with low levels of buyer satisfaction and an unwillingness to outsource.

"Buyers are very unhappy [with the categories], but they are not prepared to outsource," said Rachael Stormonth, vice-president at analysts NelsonHall.

The percentage of buyers ready to outsource categories with low satisfaction ratings, such as marketing and business travel, was around 1 to 2 per cent.

In categories where satisfaction was greater, such as office supplies, readiness was higher. Stormonth also believes the worldwide market for procurement outsourcing will be worth more than $1 billion (£507 million) by 2010.

"There are opportunities for suppliers to develop market share and even enter the field," she said. But she added the market had been growing slowly, partly due to the lack of choice of suppliers.

The research was carried out in the industrial manufacturing, pharmaceuticals, high technology and consumer packaged goods sectors.

SMapr2008

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