We need services – services procurement, that is. Services procurement is an adolescent, waiting to break free from its authoritarian staffing parents (the kind that maintained rigid order because it was all they knew). It’s the 1950s nuclear family about to hit the 1960s, 1970s and 1980s all together with a vengeance. Free love, good music, capitalism and coke (the soft-drink that is …) all at once.
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In other words, watch out as the services industry explodes with new models, talent markets and ultimately, much better value delivery than the orderly staffing and MSP market has been able to deliver to date.
In the indirect procurement segment, services procurement will continue to be a hot area, and not just within a narrow P2P focus on rate-based services. The macro trend toward contingent labor can’t be denied, and a broader and more integrated focus on services from both upstream HR-focused workforce management processes and from procurement-led focus on more holistic services procurement (e.g., including all SOW based spend for contractors, consultants, BPOs/MSPs, etc.) will fuel this sector.
There are some great macro trends supporting the need for better managing and provisioning external services, not the least of which is corporate virtualization (see Proxima’s great report on this). But even more than this, companies are wising up to the fact that services spend represents low hanging savings and total cost fruit – in a procurement world where much of the easiest to grab fruit has already been plucked.
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