Expense Management Outsourcing

Many companies are using expense strategy consultants to help them reduce waste, tighten procurement procedures and save their companies millions of dollars. Some of these companies are more successful than others at incorporating the change to bring about best results. Here are some ideas on how to improve your company’s chances of success.

 

The decision to outsource the expense management function is one that involves many factors for consideration. Some factors to be taken into account are the level of acceptable cost savings, procedure implementation by staff, change management implications, the expertise of the expense strategy company and stability of outcomes.

 

The initial decision on whether to engage an expense strategy consultant should begin with the company examining what it hopes to achieve by doing so. On the surface most companies engage in this process because they want to outsource a process they don't have the time, the expertise or the resources to accomplish in-house.

 

Cost savings can sometimes be the overriding factor, but beyond this, outsourced experts, if they are proficient at what they do, can provide improved procedures and benchmark studies to ensure continuation of ongoing cost efficiencies, vendor service and long-term performance.

 

The lure of saving money and improving efficiencies in any recognized expense area can be very strong. However, the decision to engage the services of a recognized expense strategies team is not one that should be taken solely at the highest executive level.

 

It is important to your company and to the company you hire that you are able to provide a clear picture of your current situation, your service level and product quality expectations as well as past history with previous and current vendors in that category. Many times, supply managers and the personnel using the product or service on a daily basis are in the best position to make these assessments.

 

If proper consideration is given to the change management process and the involvement of supply managers and users before the process begins, most likely the outcomes will be more acceptable both to the executive, (Corporate Outcomes) and to the managers/users (User Outcomes). Supply managers and users must be recognized as employees whose knowledge, experience and expertise is valued at the executive level.

 

There are several advantages to using this type of market intelligence to help arrive at the "best" decision.

• By being part of the process managers and users feel their contribution gives them ownership in any new process.

• When system changes are implemented, employees who have assisted with the decision are more readily able to accept new processes.

• This method tends to lead to better working relationships between chosen vendors, (whether current or new) and users both in the short and the long term.

 

It is important to find an expense strategy company that will provide implementation services, change management guidance and benchmarking analyses for at least the first year of the process to help personnel adjust to the new systems and monitor costs, service levels, end user participation and other metrics. Many consultants do no more than prepare a weighty proposal leaving the client the task of implementation.

 

All in all, with the trend to outsourcing on the rise, it is inevitable that most companies chasing that elusive competitive edge will seek the guidance of expense strategists. These consultants can provide the market knowledge and high-level expertise to assist companies in reaching their corporate and fiscal goals.

 

Monies saved through expense strategies positively impact the bottom line. Streamlined procedures, frees staff time for more critical job functions.

 

As you consider cost saving outsourcing, care must be taken on how best to determine what company you should engage and what your expectations should be. Be sure you are dealing with a seasoned, experienced company with professional procurement specialists who posses in-depth knowledge in their categories of expertise.

 

Well planned and carefully executed, the rewards can be both immediate and long term. Without consideration and input of managers and users results can often be less than anticipated.

 

RFQ Strategies Inc. www.rfqstrategies.com

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