Major supply chain disruptions, increased cost pressure and a change in how people are collaborating during the pandemic have heavily influenced the reality businesses have had to face. As a result, executives have had to consider numerous options to keep their businesses performing effectively. These include process automation, strategic partnerships, and outsourcing. Many of these goals can be achieved by finding the right service supplier. We have compiled a list of 5 reasons why finding and collaborating with the right suppliers has now become even more important than ever for your company.
1. Focus on core competencies
Although the make-or-buy decision has been on management agendas for decades, the complexity and relative weight of the factors to optimize it have changed in recent years. The decision to build in-house is comparable to micro-managing, which management leaders have realized isn’t conducive to growth. Trusting the bright and competent minds of trained professionals with the issues at hand can often be more rewarding. The same goes for services; there are expert companies with the know-how that your company might only achieve in years.
With that said, companies must objectively assess their core competencies and measure them against world-class standards. With the push for digitalization at an all-time high, buying services from experts can also provide businesses with the sought-after technologies and thus competitive advantage faster than if they were developing them in-house.
2. Foster cross-industry partnerships to mitigate risk
Strategic partnerships oftentimes come in the form of cross-industry fusions with service providers and are an effective way of driving innovation. The pandemic played a huge role in the upswing of this kind of relationship. Sectors have had to sharply increase their collaboration and share knowledge to survive in uncertain times.
These new partnerships are also likely to stay once things get “back to normal” after the pandemic. According to a Deloitte survey, a colossal 78% of executives said they would remain in those new-founded partnerships in some form, even after the pandemic. Consequently, companies can now partner with new suppliers who can help them master the change.
3. Use real-time spend management to reduce uncertainty
Unsurprisingly, the main worries of CFOs in 2021 are rising interest rates, a recession, and further pandemic disruptions. As a result, finding cost-saving opportunities in the light of an unpredictable economy and changing work dynamics have become a primary concern. With the buying of services being an integral part of spend management, leveraging digital tools can be an effective way of cutting or redirecting costs. This kind of agile tracking requires smart procurement software to keep an overview of budgets analytics. and make inefficiencies visible by providing agile spend dashboards.
80% of digital procurement value comes from techniques that drive spend reduction. When utilizing service buying tools, companies benefit from a transparent and standardized service buying process, equipped with real-time and data-based insights. Its usage enables budget spending monitoring, supplier quality evaluation, and service provider adjustments when needed.
4. Outsource your workforce as a mean of quality control
Building new operational teams in various disciplines (IT, HR, Sales, Marketing, etc.) is not only time consuming, but also cost-intensive. Many businesses turn to outsourcing when their internal resources could be used more optimally in other areas, or when it simply is cheaper.
However, many companies struggle to manage their external workforce effectively. Problems include a lack of performance visibility, compliance issues and inefficient collaboration across stakeholders. Therefore, it is crucial that methods are set in place, which help companies exercise full control over their external workforce. Digital solutions can help procurement functions track the invisible workforce, manage more effectively to enable full collaboration.
5. Accelerate digital adoption and gain a competitive edge
Integrating pace-setting technologies such as AI or Machine Learning into business models offers companies a competitive edge in the race to create the best products and services. The importance of data continues to be a central point in 2021; firms that can fully utilize data volumes stand to benefit greatly.
Insight-driven decisions are an essential part of smart service buying. Thanks to millions of data points, companies can adjust suppliers, analyze spending, monitor performance, and as a result improve their bottom-line. As research conducted by Deloitte has revealed: “Eliminating and embracing complexity effectively hinges upon one key initiative: mastering digital transformation.”
Finding the right suppliers can heavily impact your performance
All the points above culminate into one conclusion: buying the right services can greatly help your company reach its corporate goals. Focusing on your core competencies when it comes to make-or-buy decisions, forming strategic, using real-time spend management, outsourcing applicable services and integrating state-of-the-art technologies can help transform your supplier collaboration for the better and have a significant impact on your bottom-line.
Buying services can significantly improve companies’ performances if the right suppliers are identified and evaluated correctly. Mercanis helps you unlock the full potential of your service providers. Find the perfect supplier for your needs, energize collaboration across your company, while digitizing your sourcing process from end to end.
Book a demo to make the most of your service procurement or get in touch with us to book a free assessment of how Mercanis could benefit your company.