The BPO Category

Is the Tail Spend Problem Solved with Technology or with Managed Services?

Tail spend is a thorny problem — and an important one.

Tail spend is an amalgam of more granular spending: one time, low dollar, maverick, tactical by design. It doesn't even have a common definition understood by all, and it is generally a mess.

So, how to solve this problem? The design ideal is the concept of guided buying, where you start with the end customers (i.e., employees who need something) at the time of need and then guide them down to get what they need to accomplish their goals (but also within corporate policy). It’s an entryway to all procurement, not just the procure-to-pay (P2P), process, so you need to get it right and make the experience count.

But, who is the guide? Is it a tactical buying group in shared services or outsourced provider? Or is it a technology solution? Let’s discuss.

WNS Acquires Denali: Acquisition Summary and Market Analysis [PRO]

Tradeshift Baiwang

Earlier today, WNS announced it had acquired Denali Sourcing Services, a procurement solutions provider. Denali was one of the pioneers in procurement managed services. But more recently, the firm has expanded its broader practice in such areas as spend analytics, market intelligence and training. Not all of these capabilities will transition over to WNS — some will remain with the original Denali group, which will be rebranded in the coming months.

Denali brings a number of capabilities to WNS, including a center of excellence (COE)-driven managed services capability for spend analytics, strategic sourcing, category management and supplier management. In short: It adds many “baited hooks” to chum the waters for the broader business process outsourcing (BPO) and outsourcing nets WNS is casting in the market.

But perhaps most important from a market perspective, the transaction will put pressure on other offshore BPO firms, including Genpact, Infosys, HCL and Tech Mahindra, looking to accelerate penetration in North America and Europe through the addition of onshore expertise and capability. For this reason — among others — Spend Matters believes this deal is likely a harbinger of more acquisition activity to come in 2017. In the near term, however, Spend Matters believes the acquisition will do little to blunt the leadership positions of Accenture and GEP for procurement BPO and managed services.

This Spend Matters PRO First Take Analysis provides an overview of the capabilities Denali brings to WNS, key takeaways, an overview of procurement managed services and insight into select additional acquisition candidates that could contribute to further consolidation in this market.

Sponsored Article

Outsourced Services: The Next Big Challenge

Spend Matters welcomes this sponsored article from John Dreyer, CEO of The Shelby Group.

In the delivery of complex outsourced services, there is often a disconnect between the prices negotiated during the procurement phase and the actual costs of what is delivered over the term of the contract.

Selecting and Working With an MRO Service Provider: A Conversation with Michael Croasdale (Part 2)

MRO as a service

When it comes to managing maintenance, repair and operations (MRO), involving an MRO service provider can be key. But how should procurement organizations go about selecting an MRO service provider, and how does the organization show value in working with a third party? Michael Croasdale, senior project manager at Source One Management Services, LLC, a procurement service provider based in Pennsylvania, shares his insights on these questions.

How Procurement Can Tackle MRO Effectively: A Conversation with Michael Croasdale (Part 1)

MRO as a service

Maintenance, repair and operations (MRO) is a critical part of the supply chain. Unfortunately, it is also an often overlooked business function. To gain a better understanding of MRO, we reached out to one expert in the area: Michael Croasdale, senior project manager at Source One Management Services, LLC, a procurement service provider based in Pennsylvania. Croasdale, 26, was recently recognized among the winners of the Institute of Supply Management and ThomasNet 30 Under 30 Rising Supply Chain Stars Recognition Program.

Next-Generation Supply Chains Will be MRO-Powered: The Value of MRO as a Service (Part 4) [Plus+]

MRO as a service

Maintenance, repair and operation (MRO) is not just about managing parts to keep things working. It's about managing assets that have an impact on organizational performance. When you get down to it, the entire procurement function is about managing assets for organizational performance. Just replace the word “asset” with the word “resource” and consider a definition for supply management used by the Institute for Supply Management: the identification, acquisition, access, positioning and management of resources and related capabilities the organization needs in the attainment of its strategic objectives. Machines, spares, facilities, trucks, IT equipment and other items are clearly assets, but direct materials and purchased finished goods are also assets. Indirect materials, such as pencils, papers and laptops for the data crunchers, are assets. So are key employees and the IP they create. The bottom line is that as physical assets increasingly get wrapped with sensors and software, they can become much more valuable.

What Procurement Can Learn from IBM (Part 1)


Many people have different opinions of IBM. Most tend to view it as a sprawling technology and services powerhouse that is too big to fail, but it also seems to constantly be fighting every technological shift that many predict will bring it down. But IBM is also an extremely innovative firm and is actually the world’s top generator of patents. I’m personally very excited to see what they’ve been cooking up lately when Dan Carrell comes to our upcoming procurement technology conference in March to share some of IBM’s developments.

Sponsored Article

Peer Learning: Overcoming the Biggest Procurement Challenges in Grocery, Retail

Spend Matters welcomes this sponsored guest post from Brian Miller, vice president of services at Intesource, a PROACTIS Company.

The grocery and retail markets are highly dynamic and exceptionally competitive. Facing historically tight margins due to the extensive resources it takes to keep product quality high, procurement teams in these sectors need to be on top of their game in order to compete and remain financially viable. Business today isn’t easy, but in the face of all these pressures, many grocers and retailers are thriving. What’s their secret? Incorporating a sophisticated, strategic approach to sourcing as part of their overall procurement strategy.

Why Services Firms are Finally Developing Successful Procurement Technology Applications — and Why You Should Sometimes Consider Them [PRO]

big data

For well over a decade, consultancies, business process outsourcing (BPO) firms, managed services providers (MSPs) and other services firms in the procurement ecosystem have tried to develop procurement technology solutions that can stand on their own. Just about all of these early efforts were either failures or just never could be properly sustained and supported as standalone software products (i.e., something beyond a captive internal tool like spend analysis used as part of service engagements or pre-sales diagnostics). Examples include AT Kearney, FreeMarkets, Mitchell Madison and Silver Oak Services Partners. It was easy to recognize the inherent conflict between the billable hour (and solution objectivity) and the investment and expertise to run a software business. But the times have changed for services firms. Not only are some firms developing solutions that can compete on the basic feature and function software level, but the solutions now don’t necessarily walk out the door when the consultants wrap up an engagement. Rather, they are retained in areas such as sourcing, analytics, services procurement, supplier management and even procure to pay (P2P). This two-part Spend Matters PRO research brief explores what has changed to enable this, where and how services-centered firms are building applications (and in certain cases, managed services that involve software) and some of the challenges that firms still face in commercializing their technology efforts — and tips for overcoming them. It also highlights three examples of services providers that developed innovative procurement technology solutions in different areas, either within their current structure or inside new organizations run or owned by the same principals.

Has Your Company Considered Outsourcing Your HR Business Processes?

Spend Matters welcomes this guest article by Ana Gomez of GEP.

In the last few years, the enterprise’s investments on business process services is increasing annually mainly because of the need to reduce costs and improve efficiency, improve customer services, enhance employee productivity and optimize business processes. Human resources will be one of the major areas for firms to spend on. We can understand business process outsourcing (BPO) as the concept of assigning manpower and specialized entities to perform specific tasks within the organization while ensuring quality levels of service, increasing administrative functions' productivity and reducing costs. The BPO market is growing in different areas, and the human resources BPO industry has gone through a lot of change over the last decade and is consolidating as one of the functions that can increase the market value for the companies.

Andrew Karpie: Adding a New Services Procurement Voice to Spend Matters

If looked at from an outsider perspective, Spend Matters has done a fair job covering the services procurement solutions landscape to date. But from my own vantage point, we’ve missed the boat on going deep on so many areas, due simply to team bandwidth constraints and the breadth of what we cover within procurement. Granted, while we’ve ramped our research efforts considerably this year, I believe there’s so much more we could be doing in studying and expanding in the contingent workforce topic and beyond. That's where our newest Spend Matters analyst comes in. We welcome Andrew Karpie to the Spend Matters team.

Spikes Cavell Goes to Xchanging: Product Summary and Analysis [PRO]

Last week, Xchanging announced it is acquiring Spikes Cavell, perhaps the largest global public sector spend analytics provider (measured by customer count), albeit still very small. This deal is about far more than blurring of the lines between BPO and SaaS applications within procurement. Along with truly booming customer growth and substantial organic product development within the MM4 sourcing suite – MM4 was the fastest growing sourcing vendor in 2014 by our count – we are seeing a combination of events that should be a wake-up call to Xchanging's competitors, customers and prospects. This multi-part Spend Matters PRO analysis, authored by the Spend Matters research team, starts with a product analysis of Spikes Cavell and a summary analysis of MM4 – and the likely synergies between the solutions. Our analysis will continue later in the month with competitive analysis and customer recommendations.