A Conversation on Procurement at LPGP Miami: 4 Big Takeaways
Priya Iyer, CEO of Concertiv, in Conversation with Sunil Rao and Amir Salari
At LPGP Miami, a distinguished panel featuring Priya Iyer, CEO of Concertiv, Sunil Rao, COO and SVP of Finance at Plum Alley Ventures, and Amir Salari, VP of Finance and CCO at Weatherford Capital Management, shared their extensive insights on the benefits, challenges, and critical considerations of outsourcing for mid-market financial firms.
This conversation was a key highlight for businesses in the mid-market financial sector, especially those exploring outsourcing and due diligence processes in vendor procurement. The discussion offered essential perspectives and strategic advice, highlighting the significance of these practices in today's business environment. Here are 4 big takeaways from that conversation:
Expertise: The Primary Driver for Outsourcing
The panel unanimously highlighted expertise as the foremost reason to outsource. Given the expanding depth of required work and associated costs, firms have realized that it's impractical to maintain in-house proficiency in every area of operation, especially in the back-office. Outsourcing to industry-leading vendors alleviates the need to develop extensive internal systems and often provides superior service at a competitive or lower cost.
Risk Considerations Often Outweigh Cost Concerns in Outsourcing
While cost is critical in outsourcing, it should not overshadow the potential risks involved. The panel emphasized the importance of assessing the implications of vendor failure on a company's operations. Questions about how such failures would disrupt the business and whether they can be effectively managed are crucial. This approach involves preparing for the worst-case scenario and ensuring it can be handled without dire consequences, underscoring the need for comprehensive risk assessment in outsourcing decisions.
Data Security: A Paramount Priority in Outsourcing
Securing your data is critical when outsourcing. Adding an external provider introduces significant security risks. It is vital to rigorously assess your vendors' cybersecurity measures and data backup protocols. Given the sensitivity of the data involved, the possibility of its compromise is a serious concern. Maintaining vigilance over data security is essential in any outsourcing decision. Continuous due diligence and regular vendor security policy updates are necessary to ensure your data remains secure.
Building Strong Relationships with Procurement Services as a Top Practice
Choosing to consolidate services under a single procurement provider can be advantageous. Each new vendor introduced adds layers of risk, administrative demands, and complexities in managing contracts, costs, and data security. Working with a well-established procurement service allows for a more efficient onboarding process—not only in terms of contract management but also in building trust. This approach also leverages the benefits of existing relationships: familiarity with the vendor’s expertise, confidence in their risk management practices, and trust in their data security measures. Opting for a single, reliable provider minimizes the risks of bringing multiple new vendors into your operations.
In summary, the conversation at LPGP Miami elucidated key strategies for mid-market financial firms considering outsourcing. The panel of experts underscored the importance of leveraging external expertise, meticulously evaluating potential risks, ensuring stringent data security, and fostering robust relationships with procurement services. These takeaways highlight the critical considerations in outsourcing decisions and offer a roadmap for firms to optimize their vendor management practices, ensuring efficiency and security in their operational frameworks. This guidance is invaluable as businesses navigate the complexities of a dynamic economic landscape, striving for growth while safeguarding their core operations.
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