UK Government must change attitude to strategic sourcing

Date Posted: 02/10/2019 Category:
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UK Government must change attitude to strategic sourcing

Date Posted: 02/10/2019 Category:

The chief executive of a prominent industry association for strategic sourcing professionals has criticised the British government for a destructive attitude to outsourcing.

Writing in Raconteur, Kerry Hallard, chief executive of the Global Sourcing Association (GSA), charges the UK Government with being “both an unintelligent customer of traditional outsourcing and … a political blame merchant seemingly hell bent on irreparably damaging the reputation of outsourcing in the UK.”

Observing that the UK was once the global leader but now languishes just inside the top 20 performing countries, Ms Hallard says that a significant proportion of the decline can be attributed to government failure to understand and adopt contemporary strategic sourcing.

All businesses, she writes: “need to partner with best-of-breed players to survive, let alone thrive.”

Research from the GSA shows that all the best-performing companies have a recognised strategic sourcing function: teams of exceptionally skilled professionals who cross the fences of traditionally siloed functions such as business, operations, finance, technology, and procurement.

These practitioners, Hallard explains, use cutting-edge technologies to develop optimal sourcing arrangements for their firms, from artificial intelligence to spend analytics to blockchain to automation, fostering enhanced trust between new outsourced partners in the business enterprise through greater transparency while achieving significant cost reductions through greater efficiencies.

Yet, she continues, the UK government’s suspicious and benighted attitude to strategic sourcing of this kind has resulted in a serious shortage of talent in Britain to drive badly-needed programmes of change.

By contrast, after their worldwide market position fell from fifth to ninth, the global pharma giant, GSK, transformed their fortunes by establishing a cross-functional strategic sourcing team who proceeded to slash requests for proposal processes to a quarter, radically cut payment terms, and build a culture based on trust, transparency, and co-investment which attracted the most dynamic firms.

The result was that GSK won the GSA’s Innovation Award in 2018.

Businesses can embrace innovation. But, as Hallard asks, can the UK government?

source: https://www.raconteur.net/business-innovation/strategic-sourcing-business

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