As fresh produce companies increasingly concentrate on their core business, procurement outsourcing (PO) across all sectors of industry is growing at 30 per cent a year, according to the Everest Research Institute. The institute assesses that PO offers the highest potential returns of any business process outsourcing. It accounts for almost 10 per cent of the total £1.76bn market for procurement transaction outsourcing and is tipped for greater growth in 2006.

Everest’s annual procurement outsourcing report suggests that the value of PO goes far beyond operational cost savings. The main value driver is the reduction of expenditures on indirect spend categories such as travel, office equipment and professional services which are typically 10-15 per cent. And companies that are buyers of PO services are increasingly focusing on strategic sourcing and compliance management.

The Capespan group outsourced IT systems to Digica 15 months ago. “If things we were doing were not directly related to marketing fruit, we realised we should be looking at outsourcing,” said Stef Rigotti, general manager information systems at Capespan (Pty) Ltd in South Africa. As well as reducing costs, outsourcing has improved service. Capespan’s IT infrastructure is more resilient with full disaster-recovery procedures in place and since the contract started Digica’s work has expanded to provide additional services in the UK to Capespan - bespoke application development and database monitoring. “Even if things are not strictly covered by service-level agreements,” said Rigotti, “Digica bends over backwards to ensure things work for Capespan.”

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