When it comes to Services Procurement, organizations today face a number of problems in the marketplace. Over the last several years, our product management team, including myself, has done extensive research in the area of Services Procurement.
This research includes input from our customers, the market, industry analysts and our partners. The top five questions that organizations need to ask themselves around the topic of Services Procurement are:
Do you have visibility into your Statement of Work initiatives?
Are you effectively managing this spend category?
Is a competitive bid process used to generate the best cost and outcome?
Do you have the data you need to trend project costs and analyze quality?
Does your organization have insight into the budget and scope of all projects?
Organizations that are not effectively managing their flexible workforce spend often are unable to answer these questions due to their lack of visibility into the category spend. The inability to answer these questions poses significant risks. For example, if engagements are being sole-sourced without a bidding process it reduces an organization’s ability to receive the best solution at the best cost, impacting potential cost savings and an organization’s ability to be innovative in the marketplace.
I do bring some good news though. The marketplace is evolving and now demands the same level of visibility and control over Services Procurement spend that has been realized over the Contingent Staffing workforce. As a matter of fact, 95% of new prospects that come through our door inquire into how they can gain better control over this spend category at some point in the buying process. Additionally, the majority of RFPs that we have received over the last couple of years contain some element of Services Procurement requirements.
So, what’s the big deal? Aberdeen Group reported that 60% of companies profess that SOW-based projects and services received the most organizational attention over the past year, yet a mere 14% of companies actually have high visibility into their SOW-based spend. So you can see why organizations are trying to gain better visibility and control into this spend, especially since these engagements are more complex and costly than your typical Contingent Staffing engagement. We are talking about millions, if not, billions of dollars here.
Hopefully today’s blog has helped to highlight a handful of the most pervasive market problems organizations face today when trying to better manage this category of spend. As we continue along our Services Procurement blogging journey, we will begin to discuss how a Services Procurement solution can help organizations gain the visibility and control they need.