The As-a-Service Model: What it is and What it Will Mean For Procurement In 2016


The procurement world may be hearing a about a new acronym in the new year: a-a-S. It stands for “as-a-service,” and it’s a new, outcomes-focused business model for sourcing. According to Accenture, which Spend Matters recently spoke with about this new model, the a-a-S model is agile, dynamic and offers plug-and-play services that allow a procurement organization to access a broader-than-ever set of information and analytics to make smarter decisions in less time.

Mike McDaniel, senior managing director of Accenture Procurement-as-a-Service offering, said clients were continuously moving toward cloud-based offerings and demanding access to data on a single platform that would enable them to scale operations. These clients also wanted information in areas that they were not necessarily experts in themselves, say, a certain commodity. Accenture saw an opportunity to build a business around bringing data analytics and expert insight in specific areas to its clients, Mike said. The reaction from clients has been “phenomenal,” with organizations implementing a-a-S models experiencing benefits within the first month of implementation. Accenture’s 2013 acquisition of Procurian was the starting point for Accenture to build this cloud offering, something Mike also noted.

This a-a-S model will become increasingly important in 2016 and beyond, Mike said. Procurement organizations will continue to look for faster and more effective ways to source materials, goods and services. What once was the traditional seven-step sourcing process that took weeks is now a one-to-two-step process done in a matter of days, thanks to analytics and automation. For example, when clients source a specific commodity or service, the technology-based a-a-S model allows them to see which vendors are offering the best price and service, Mike said, bringing automation and improved efficiency to the sourcing process.

One industry where the a-a-S business model can be useful is mineral extraction, Mike said. With the rapid decline in oil prices this year, for example, mineral extraction companies have had to change how they think and operate, he said. Another area where the a-a-S model is being adopted is human resources and specifically with talent recruitment and administration. With the a-a-S model, HR organizations are better able to scale hiring based on business growth or contraction and business spending.

This is more true than ever in the case of contingent workforce. Companies are able to bid on the work they want, finding independent workers, contractors and freelancers to fulfil that work. This scalability and flexibility — bringing on employees for certain projects when needed — is made available within an a-a-S model, Mike said.

There is some resistance to the a-a-S model among larger corporations that have made long-term legacy technology investments and for which any change in the solution would be a “real mindset shift.” This can be a tough change for larger organizations, despite the possible benefits.

“When you move to an as-a-service model, you have to rotate your thinking and only take key services that are important and put that into a cloud offering,” Mike said.

Mike sees more organizations making this a-a-S model shift in 2016 and beyond, however. Organizations will increasingly look for analytics to lead sourcing decisions and demand automation services within sourcing technology solutions, he said. The use of mobile will also grow next year, he said, giving organizations “24-by-7 access” to what is happening within certain processes.

Beyond 2016, say in two or three years, Mike also pointed to sourcing technologies offering zero-step sourcing with “cognitive ability,” which automatically sends users information on the best product or vendor to fulfil their needs.

“We are not there today, but that is where it’s going,” Mike said.

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