The Biggest Gaps and Opportunities in Services Procurement

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Spend Matters and the Institute for Supply Management have been hard at work surveying members and readers – along with the Society for Human Resource Management community – on the disconnect between the management of direct material supply chains and services supply chains, primarily centered on contingent labor. Today I’ll highlight some of the qualitative responses received from more than 450 participants, who offered their opinions on the biggest gaps and opportunities they perceived in managing services procurement today.

You can find other posts in this series below, including response data suggesting best-of-breed vendor management system (VMS) and managed services provider (MSP) penetration is not as robust as many believe it is.

But back to the subject at hand. When asked the question, “What are the biggest gaps/opportunities that you see in managing services spending and the extended workforce?” participants offered some of the following qualitative responses:

  • Uncertainty regarding regulatory compliance and such as the Affordable Care Act, co-employment and misclassification
  • Biggest gap: the organization’s unwillingness to take control of this huge expense and better manage it from all perspectives – cost, risk, worker classification, on/off boarding
  • “We have a robust application tracking and managing all supply-side spend. We are focused on line-of-business needs and compliance to program as a means to optimize demand side cost.”
  • Spend analysis, forecasting and demand planning is poor in case of services.
  • Obtaining alignment with internal customers and buy-in from stakeholders
  • “The biggest opportunity for us lies in using an MSP-VMS solution.”
  • Reporting and tracking contingent workforce and benchmarking of rates for labor

One of the central themes on both sides of the improvement and opportunities coin appears to be the effective use of quantitative information, including spend and supplier data. Of course the irony of this is all the top VMS providers – Fieldglass, IQNavigator, Beeline – offer analytics and integrated rate and related guidance as part of their solutions.

But are companies using it effectively, let alone adopting these capabilities at the level they should? (The study found that only 22% of respondents uses a best of breed VMS solution.)

What do you think? Feel free to chime in below!

First Voice

  1. Brian Hoffmeyer:

    Interesting commentary. It’s astounding to me how difficult it is to get companies to capture all of their services spend in a VMS when the benefits are so incredibly clear.

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