Let’s dive into the question, “What is Procurement Consulting?”
Have you ever wondered, “what is procurement consulting?”
In this blog, we’ll provide the answer.
Procurement is a complex process that can involve negotiating contracts, building relationships with suppliers, and keeping up to date with market trends. And with the advent of globalism, procurement has never been more integral to the economic health of markets.
So, what is procurement consulting?
To put it plainly, procurement consulting is when a company/individual, well-versed in procurement, provides expert advice to an organisation. This can lead to improved contracts with suppliers, upgraded procurement systems, and efficient cost-saving strategies. The end goal for Procurement Consultants is that their clients meet their business goals, whether that’s profitability, sustainability, etc.
Is procurement just about reducing costs?
Ask any business layman, and the first thing that comes to mind with procurement is cost-savings. This is simply a reductive view of procurement. There’s far more to it, for instance, helping organisations adhere to ethical and sustainable standards. Too many people confuse finance with procurement, and it shows. Ultimately, finance sets the spending limits, whereas procurement focuses on spending it in the most efficient/effective way. As you read below, you’ll begin to understand that procurement is far more than simply cost-saving.
Does procurement consulting have a visible effect on companies?
Without procurement, there would be a serious lack of awareness on multiple issues such as:
- Service Delivery
- Usage of resources
- Wastage
- Procurement innovation
- Decision making throughout the supply chain.
Through each of these components, procurement consulting provides an expert perspective on improving and streamlining their function in the company.
What are the benefits of procurement consulting?
When answering the question, “what is procurement consulting”, you’ve got to consider the benefits, such as…
- Reducing the complexity of your supply chains
- Improving supplier relationships
- Operational improvements
- Reductions in your expenditure
- Increased awareness of market trends, including price increases and shortages
- Improving the relations in your supply chains
- Providing customised procurement strategies
- Varied solutions for cost saving
- Reduced stress with suppliers
- Stabilise target liquidity levels.
All these benefits and more are open to you with procurement consulting.
Does procurement consulting change within the public and private sector?
Procurement consulting can vary significantly depending on the sector. Below, you’ll find the main differences between the two sectors.
Public procurement consulting
As the public sector isn’t profit-orientated, the budgets may not be as large. As well, restrictions due to legislation and regulatory obligations could affect the procurement process. Transparency and the need for publicly visible audit trails could also play a part in public procurement consulting. Parts of the procurement process might need to be adapted, such as:
- Pricing
- Contract opportunities
- Scheduling
- Accounts
- Contract awards.
As well, public procurement consulting needs to consider social value and sustainable procurement.
Private procurement consulting
Private procurement consulting has more flexibility and room to work with. The private sector will have more fluid transfers of capital. This is in stark contrast to the rigid nature of the public sector with its finance trails. On top of this, the agility of private sector procurement will also be considered. The budget may be larger to account for the prospective profit. This is ultimately down to the motivation of the private sector, as they wish to increase shareholder returns. As well, private companies usually answer to a board of directors/stakeholders, and this can have an effect on decisions.
In summary
By this point, we feel we’ve answered the question, “what is procurement consulting”, quite well. Due to us covering quite a lot of content, how about a recap?
- So, what is procurement consulting? – The practice of companies with expertise in procurement advising and supporting others without the resources in-house.
- Is procurement just about reducing costs? – A common myth is that procurement is just about cost savings. But procurement can cover supply chains, strategies and awareness of market trends.
- What are the benefits of procurement consulting?
- Simplified supply chains
- Improved supplier relations
- Operational improvements
- Reduced expenditure
- Increased awareness of market trends
- Customised procurement strategies
- Several solutions for cost-saving.
- Does procurement change within the public/private sector?
- Public procurement consulting – Public procurement consulting is more concerned with external factors such as social value, sustainability, and regulations. They have to disclose their financial trail due to the contracts being funded with taxpayers’ funds.
- Private procurement consulting – Private procurement consulting is freer in terms of transparency. Although they can answer to a board of directors, they’re appeasing private bodies and not public ones. Alongside this, budgets aren’t tied down like public procurement.
- Do procurement consultancy firms have a visible effect on companies? – Without procurement consulting, the following aspects of companies would suffer.
- Service Delivery
- Usage of resources
- Wastage
- Innovation
- Decision making throughout the supply chain.
How can Hudson Procure help you?
We know that the procurement and tendering process can seem like a minefield. That’s why we’ve created four services and one software that help you achieve your procurement goals. With 20 years of experience, we’re well equipped to deal with all of your procurement needs.
We provide project-based tender support and management in addition to offering any required procurement support on an ad-hoc basis. Our Procure Consult service includes mentoring, coaching and general advice. Ultimately, we have the capability and experience to support any operational or strategic procurement requirement.
Procure Health Check
Our Procure Health Check service is for companies that have some knowledge of procurement but need that bit of assistance. The service includes on-site interviews with stakeholders to understand current procurement processes, skills and understanding. Also included is a review of procurement systems, infrastructure and opportunities for development.
Procure Analyse
Our Procure Analyse service provides a high-level, vendor-led analysis of an organisation’s spending activity. This helps us to understand current purchasing behaviour and areas where procurement activity can be focused to deliver greater value. This service helps generate a structured, forward plan for procurement activity and improving purchasing operations.
Procure Outsourcing
Procure Outsourcing focuses on providing procurement solutions on an outsourced basis. This would mean that the procurement services can be tailored to your needs. This could mean:
- Supporting existing procurement resources as an extension of your team
- Multiple tender projects delivered as a package
- Full procurement function for an organisation.
Procure Post
Are you trying to find a supplier for your project? Post your tendering opportunity onto any of our 11 sector-specific portals for FREE with Procure Post!
Housed by our sister company, Hudson Discover, our portals host thousands of tendering opportunities for organisations of all sizes. We’ll help you identify your requirements and find the most suitable suppliers for your business.
For more information or for a free consultation, please get in touch.
Check out our other blogs for further Procurement Insights:
