Spend Matters Premium Content:
Procurement Services

Top Challenges and Questions Facing Corporate Legal Departments [Plus +]

UpCounsel

The market landscape for legal services is much more dynamic than it may appear to most outside observers — and as a result we are seeing a number of meaningful trends in the market.

The provider landscape is rapidly changing. Firms are specializing in certain legal matter areas, and non-law firm providers are emerging as viable alternatives to perform certain types of legal work at lower cost and higher efficiency. And as in almost every industry and market, technology is playing a more transformational role in the legal services market, with implications for both buyers and suppliers.

In this article, we share some of the frequently asked questions we have received from GCs, and our responses and recommendations.

CRM for Procurement: Lessons from the Sell Side [Plus +]

In a world where everything is quickly becoming a service (XaaS), perhaps the single most important differentiator is being customer-focused and aligned in order to allow you to deliver value to them over the long run. It is a simple principle, but procurement is not so easy to implement. Everybody who spends money in the enterprise has the potential to get more value from their spend and is a potential “customer” for procurement to help. Given procurement’s limited resources, adopting and adapting CRM principles, practices, and tools can help. As we get started, note that CRM for “supply” and suppliers is not the buy-side of “SRM” or supplier management – it’s a much bigger, hairier, and more encompassing beast.

So who are the customers? And should they even be called customers?

Many procurement organizations do not like the term “customers.” Some use the term “clients,” and others use the term “stakeholders.” Still others use the term “internal partners.” It doesn't really matter as long as the organization defines the nomenclature that works best for them. That said, it is important to understand who all the various stakeholders are within the procurement process, so that they can be appropriately targeted to drive more value out of the process. In fact, if you think of the term "stakeholders," it means anyone who has a stake in the process and who consumes the outputs of that process: information, materials, services, cash, goodwill, etc.

So, to be a stakeholder in a procurement process means to be a customer of that process. This means that procurement needs to be explicit in defining and working with 10 key stakeholders – and reconciling which of these will get the most attention.

Let’s get to the list (and beyond that, 14 critical areas of CRM begging to be addressed).

Digital Service Providers: Do They Require Your Attention and Why? (Part 2) [PRO]

crowdsourcing

In Part 1 of this series, we described and unpacked the topic of digital platform-based service providers, which represent a modest but growing spend category far outside of the scope of contingent workforce and services (CW/S) procurement programs. While they are not on procurement’s radar, Spend Matters believes these providers will increasingly become a significant part of organizations’ services consumption and spend over the next 10 years.

In Part 2, we review what is arguably the most successful sub-segment of these digital service providers, as well as revisit the question of whether they require your attention and why.

Next-Generation Digital Service Providers: The Who, What and Why for Services Procurement [PRO]

An increasing number of digital, platform-based service providers are appearing today, and while they now represent a small category far outside the scope of most contingent workforce and services (CW/S) procurement programs, the spend they account for is growing.

Back around 2010, traditional BPO providers sought to introduce clients to digitally turbo-charged offerings. Though similar in concept, the providers appearing today represent a whole new generation of platform-based service providers, many of which were startups or didn’t exist in 2010. They did not arise with the scale and legacy of the BPO providers, nor did they occupy the category of major service providers of which procurement was aware and already oversaw.

Far from a passing fad, these next-generation digital service providers will become an increasingly significant segment of services consumption and spend over the next 10 years. We base our projections on solid, long-term trends evidenced in both the consumer and business sectors.

This Spend Matters PRO research brief defines this new generation of digital service providers and poses the entirely open question of whether they require the attention of procurement organizations tasked with managing services spend at this time.

Work Intermediation Platforms: Examples Within 3 Basic Categories [Plus +]

In a series last year, we set out to explore the digital evolution of the contingent workforce supply chain — a specific area of the services procurement world that, dare we say, has been getting hot.

We began tracing a line from the vendor management system (VMS)-dominated atmosphere starting over 15 years ago up to the more recent technology-enabled platforms such as Work Intermediation Platforms (WIPs).

Related: Join me and Jason Busch for a free webinar next week on 2017 Tech Trends and what they mean for contingent workforce practitioners.

But as we know, launching into heady discussions on the topic may be rough without laying down some simple definitions first. For that reason, we want to give services procurement practitioners a bit of a primer on three basic categories — marketplaces, service providers and private pools/networks — and examples of WIPs that fall into each (or more than one) of them.

Whoa, What’s a WIP Again? Here’s a Super Quick Review

First, let’s just quickly define WIPs. While well-known platforms such as Amazon, Uber and Airbnb have arisen in the retail, transportation and hospitality areas, tech-enabled platform businesses, functioning as new intermediaries between demand for and supply of work/services, have been proliferating. Spend Matters refers to these platforms as work intermediation platforms (WIPs).

These platforms have been able to engage workforce populations that have not  been previously accessible (e.g., talent in other countries). They have created new efficient ways of executing work arrangements (direct sourcing to electronic payment); performance and fulfillment of work/services (e.g., online end-to-end); and new models of engaging workers (e.g., crowdsourcing).

After 10 years, WIPs are still at a very early stage of development. However, such a rate of maturation and acceptance is not atypical for technology-driven innovation. In our view, many WIPs around today will evolve to be successful, and new WIPs will emerge with successful formulas and models right out of the gate.

So, WIP Category #1: Examples of Marketplaces



The above platforms basically fit the marketplace model (and Upwork would also fall into Private Pools/Networks), but there are variations. So let's dig into them, shall we?

Using DMAIC 2.0 to Blow Up the N-step Procurement Process [Plus +]

An n-step chevron process is a siloed procurement-centered sourcing methodology geared towards supplier rationalization. It’s a fine start for procurement hitting cost savings goals, but it’s not a great way to align to the broader organization as procurement evolves. So, we’re proposing DMAIC as an emerging, superior approach, but it’s far beyond the DMAIC that you usually think of. The n-step sourcing process has had a good run, but let’s not try to make it do unholy things. Read on to see how other companies have used DMAIC.

Pricing Trends: VMS and MSP Pricing and Trends for SOW Programs [PRO]

Tradeshift Baiwang

This fall, Spend Matters is conducting a survey of overall vendor management system (VMS) pricing trends in the market. But in the meantime, we thought it would be useful to share a joint perspective with an industry expert specifically around VMS and managed services provider (MSP) pricing and business model trends for supporting statement of work (SOW) programs. As SOWs become a larger percentage of typical services procurement expenditure in more mature procurement organizations — and as specialized technology and managed services offering continue to develop to support these programs on an end-to-end lifecycle basis — it is becoming increasingly important to think about managing these efforts in a dedicated manner. This Spend Matters PRO analysis provides insight into how procurement organizations can more effectively engage VMS and MSP providers in support of their requirements based on current pricing and business model trends,including supplier-funded models.

Realizing Savings in Your Contingent Workforce Program — People Are Not Widgets

Spend Matters welcomes this guest post from Kanita Brown, managing partner at KH Brown Solutions. One of the challenges for the contingent workforce management professional in demonstrating value from your program is having your cost savings recognized by your organization. As procurement, you know that it can’t be all about warm and fuzzy things like risk mitigation and compliance — ultimately you are measured by how much money you save.

Technology, Platforms, Disruption and the Transformation of the Consulting Industry [PRO]

consulting

Few would disagree that the professional services industry is mature — business and delivery models and the actual industry structure have remained practically unchanged for decades now. This industry is not only mature but also massive and complex.

A long state of industry maturity is almost always a predictor of an approaching period of significant change — disruptive, transformative and most often both. As in other industries, technology and online platforms are already making their mark — and will do so increasingly.

Online Work Intermediation Platforms: The Opportunities and Challenges in Mid-2016 [PRO]

social

If you are an enterprise contingent workforce or services procurement practitioner, it’s almost certain that you have some awareness of the increasing role of state-of-the-art technology platforms in intermediating contingent work arrangements. You know today (whether because of Uber, or Upwork, or others) that technology-based platforms are being used to engage contingent workers, get work done and most often pay the workers — all through a single digital platform. But this awareness was not always the case. When analyst coverage of this subject started over four years ago, the emergence of work intermediation platforms was (for all intents and purposes) off the radar of practitioners, who were absorbed with program expansion, vendor management system (VMS) adoption, staff-augmentation cost and risk management and the increasing need to manage SOWs. All of these remain top priorities now, but practitioner mindshare has opened up for several reasons, such as the need to access and engage skilled talent in a time of shortages and the expanding popular awareness of freelance, gig and on-demand.

DCR Workforce: Vendor Snapshot (Part 1) — Industry Context, Business Background and Solution Overview [PRO]

gig economy

This Spend Matters PRO vendor research series focuses on DCR Workforce (DCR), a provider of services management/procurement technology solutions. DCR Workforce is a difficult provider to paint into a box. On one level, DCR provides a next generation vendor management system (VMS) solution, more than capable of holding its own against some of the better known providers in the sector on a functional basis addressing basic contingent workforce requirements. But on another level, it delivers much more — a statement of work (SOW) capability that is fundamentally different than other VMS providers in approach and capability, a powerful analytics platform for managing broader services procurement activities and even a freelancer management system (FMS) and supplier network that offers new ways to manage freelancer and contractors. Part 1 of this series provides background and the business context surrounding DCR Workforce, including quick facts and a history of the provider, and an overview of the DCR business and solution set. Subsequent parts of the series will go deeper into the DCR solutions and what use cases they may best address.

The Shift from Labor to Services Procurement (Part 1): ‘The What’ [PRO]

Elemica

Services procurement, with the exception of contingent workforce management (CWM), has evolved imperceptibly over the past 15 years. However, there are reasons to believe that it is about to change — or in terms of what procurement does, will need to change. Those reasons include the pressure to reduce cost of services and the effects of accelerating digitization. Still, without senior management support, additional funding and organizational development, the need to change may not be addressed, leaving gaps in enterprise performance, which more proactive, competitive companies could exploit.

In this first part of this PRO series, we will cover “The What” of services procurement — where we’ve gotten to today and where we seem to be heading. In subsequent installments, we will focus on the role of digitization and what changes procurement will be addressing as consumption and buying of services in different forms increases across enterprise organizations.