Kronos

Procurement BPO: how leveraging specialisation helps fight the climate crisis

Procurement BPO

Summary

The relationship between a business and the environment is often complex and full of hidden contradictions. Given the current global climate, however, the need for eco-conscious business operations has never been higher.

Here is how procurement BPO can help a business achieve this integrated goal. 

Outsourcing supports more efficient resource allocation: Specialisation cannot be achieved swiftly. This is a fact but it is also a disadvantage when it comes to time-sensitive goals, especially those relating to the climate crisis. Through procurement outsourcing, a company benefits from the specialisation of an external organisation. This leads to more efficient resource allocation and better cost margins, finished products, internal operations, and a more positive impact on the environment—simultaneously. 

Outsourcing shortens the supply chain: Outsourcing allows a business to move lower value-added routine tasks out of its purview. This creates a shorter supply chain that improves transparency and lowers the risk of procurement fraud. 

Outsourcing increases value addition: Outsourcing makes room in your business for higher value-added activities. It also lowers running costs. The resources that contribute to your finished product or service are utilised to their fullest extent, which lowers wastage. 

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Navigating the climate crisis and social responsibility as a modern business seems full of contradictions. 

It seems as though there is no way to run a business in a way that has little to no impact on the environment, or at the very least, balances out possible harm.

While it is true that businesses do not have a straightforward path to ensure that they sustain the most environmentally conscious operations, this is not impossible. Making the effort to develop eco-friendly operations is, in fact, the only way forward for any company that wishes to remain future-focused.

The double-edged element of certain industries is evident in examples like agriculture. Agriculture is a critical industry that both contributes to and is affected by climate change. The EU faces mounting pressure to reduce greenhouse gas emissions and lay down robust frameworks to adapt their wide-scale food production systems to respond better to climate change. 

This is not the only pressure on agriculture. With resource competition growing alongside skyrocketing global demand, the EU’s production and consumption needs must be integrated into the broader context, linking food security to agriculture and energy

This codependence, and reliance, of so many factors on one industry, is a common problem in the modern business landscape and supply chain.

We all bore witness to this reliance during the COVID-19 outbreak. A rise in cases in one specific area or link in the supply chain led to wide-scale breakdowns all over the world. This is the result of globalisation and the increased search for cheap resources and labour. 

This unsustainability in our current procurement methods was revealed during the crisis and it falls on organisations to rethink their futures in line with these lessons. While businesses continue the long recovery post-vaccine rollout and restrictions, the focus must shift to the long term. 

As we move forward into the new normal and the future of modern business, strengthening the sustainability of supply chains and facilitating the efficient use of resources emerge as priorities.

Procurement BPO or Procurement Business Process Outsourcing plays a key role in helping businesses navigate more eco-conscious operations that can be implemented despite the challenges of the crisis. 

Here is how procurement outsourcing provides the right solutions. 

Procurement BPO supports more efficient resource allocation

It is impossible for a business to achieve specialisation overnight. Even if your company is moving steadily towards a goal of eco-conscious practices, it could take years to eliminate unsustainable processes. 

Procurement outsourcing gives companies the unique opportunity to benefit from the specialisation of an external organisation. 

This means that your company can focus more on the unique operations you have developed and improve your model continuously while ensuring that your processes are completed by skilled external parties.

Due to the specialisation of these external organisations, your business operations will likely be completed on a shorter timeline and with more skilled use of the resources at their disposal. 

What this means is that you benefit from more efficient resource allocation, which, in turn, affects your cost margins, your finished products, your internal operations, and the environment—simultaneously. 

Procurement BPO shortens the supply chain 

Procurement processes that are generally outsourced by any business are lower value-added, routine tasks. This means that while your supply chain may be losing some steps in the process, it is not losing value at any point.

A shorter supply chain also means swifter results and greater responsiveness both internally and externally. This improves the transparency of your procurement operations and lowers the risk of procurement fraud. 

This efficiency may not create a positive impact on the environment directly, but it lowers the pressure on each step in the supply chain and allows for shared responsibility and the shared benefit of specialisation.  

Procurement BPO increases value addition

Outsourcing not only increases the value of your finished product through higher efficiency and expertise, but it also makes room in your business for higher value-added activities. 

On top of these advantages, it also lowers running costs. This means that your company benefits from a higher quality output without having to cut costs where it matters the most, such as your investment in people development and CSR initiatives. 

This ultimately means that the resources that contribute to your finished product or service are used to their full potential and wastage is eliminated. In a world where resources are scarce and the environment bears the impact of rising demand—creating the need for unsustainable resource creation—this is an advantage to any business. 

Benefit from procurement outsourcing today 

Procurement outsourcing comes in all shapes and forms. Whether you outsource spend analysis, category management, tail-spend management, sourcing, transaction management, or compliance processes the benefits of BPO are clear.
Leverage higher value addition through outsourcing today for swifter crisis recovery and a more resilient procurement arm.

Download our free eBook to learn more about the value of procurement outsourcing and how it can add greater value to your business operations

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