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Analyzing the Rise of Procurement Staff Augmentation Services: 2011 Update

At Spend Matters, we track many aspects of the procurement and operations world. And in most of the areas we analyze, it’s possible to see an evolutionary approach to the market adoption of new types of products and services. But procurement staff augmentation services are different. In what feels like a compressed period of time, procurement staff augmentation has exploded into an entirely new market niche that was barely on the radar screen before its ascent. And since the publication of this original paper in 2008, the increase in adoption of staff augmentation services within procurement groups has continued to boom.

In reviewing this original paper from 2008, much of what we said at the time – which is largely intact in the text, albeit with a number of additions – has proved accurate and we hope helpful as companies explore staff augmentation options. As we looked to update this material for 2011, what has changed the most in our observation is the introduction of a more mature marketplace of both decision makers and providers.

What do staff augmentation services look like and what are some of the benefits (and pitfalls) to be aware of? In this Spend Matters Perspective, we will answer the following types of questions:

  • What do procurement staff augmentation services look like?
  • Why (and how) can it ever make sense to bring in contingent labor that is above the cost of the internal fully burdened rate?
  • How can companies get the most out of contingent labor within procurement?
  • What types of projects and areas are best suited to contingent labor?
  • When does it make the most sense to bring in contingent labor versus hiring a consulting team (or building out an internal organization)?

In this updated version, we also consider, among other new additions:

  • Overall updated observations (e.g., rate increases since 2008)
  • The rise of domain/category specific skills (e.g. the category skill-sets that are in demand and whether companies really need highly specific contingent sourcing expertise — or not)
  • Decision criteria and sustainability of programs (e.g., who is the decision maker and who has budget authority for procurement staff augmentation)

If you’re looking for a primer on the benefits of procurement staff augmentation services, this Spend Matters Perspective compresses a significant amount of information on the subject into a succinct analysis.