Downturn: scope for outsourcing

28 September 2008
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29 September 2008 | Rebecca Ellinor

The current financial crisis creates an opportunity for procurement outsourcing, according to delegates at a SM roundtable debate in London last week.

Participants said cost-cutting plans were being brought forward and purchasing increasingly had more work than it could do alone.

David Natoff, head of global supplier sourcing, finance operations at Google, said in the past six to 12 months many procurement functions have stopped having to sell themselves. He said Google is now operating in an "environment of prioritisation".

"We have more projects than we can do and we're having to be selective and say to key stakeholders, 'I cannot do your project today, I can do it next March, can you wait?' Certainly going to a 4C or AT Kearney could relieve some of those pressures."

Kevin Devoy, manager, procurement and supplier management at Centrica, said purchasing will have to decide if it can continue to make investments in people and grow organically or if it should consider other models to provide services to key clients.

Simon Lee-Smith, group supply director at O2, added: "My department's under headcount and additional savings pressure. Outsourcing part of your procurement gives you those dual benefits."

SMsep2008

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