Contingent Workforce and Services (Part 3) – Automated, Outsourced Solutions: Is the Market Ready?

Following our posts last week on the changes in the contingent workforce and services market in 2018 and what we can expect to see in 2019 – from our US analyst here and from Comensura here – today we add some extra European flavour,  from Maistro, a UK-based online marketplace for businesses seeking vetted service providers.

Throughout the past year, industry analysts have been encouraging procurement professionals to take note of the explosion of activity transforming procurement, particularly due to new tech in the market. As Andrew Karpie, Spend Matters US-based analyst, suggests, a complete overhaul of the services procurement area is in the works as procurement vendors re-skin and enhance the technology behind their sourcing solutions to maintain market share and compete in an increasingly tech-driven market.

Consumer-based buying preferences are heavily influencing technology enhancements as AI efficiently replicates mundane decision-making in the business environment.  The potential benefits this advancement brings to services procurement (once considered the one area of spend that could not be automated) are, in fact, massive.  The optimisation of services spend, clearly an untapped area of unmanaged and often maverick corporate buying, puts the procurement of complex services directly under the microscope.

Agile procurement solutions underpinned by AI and global sourcing platforms like B2B Marketplaces are increasingly catching the attention of innovative procurement professionals who want to accelerate procurement processes across their organisation and reduce wasted time on sourcing, vetting and researching suppliers for business services.

So, is the market ready for automated, outsourced procurement solutions - especially those that would optimise services spend?  That’s a tricky one to answer.  The US appears to be ready and in fact, diving into the change taking place. However, in other markets, it seems that analysts’ words of encouragement to focus on procurement technology may be falling on deaf ears.  In the UK, adoption of outsourced procurement technology is slow. Remarkably slow. Perhaps this reluctance is clouded by overarching geopolitical concerns or driven by an underlying cultural palette that is not fond of the unfamiliar.

In the UK market, organisations may benefit from accelerating trials of new procurement solutions or outsourcing parts of their procurement functions at the same level of intensity or confidence as companies in other European countries.  In fact, in The Procurement Predicament, a recent pan-European study surveying over 500 CFOs and senior financial decision makers, we see companies in The Nordics actively using outsourced procurement and new technologies to specifically trial new initiatives in new markets. And in Switzerland, outsourced procurement solutions are recognised as a means to provide services that are not available in-house.  Whereas, in the UK, businesses cite a somewhat dated desire to meet cost-cutting targets as the primary driver for outsourcing procurement.

With this limited driver as a basis to implement outsourced procurement technology, UK businesses will likely always be a step or two behind the rest of organisations in other countries that are using technology as a modern, agile means to create immediate value in their business.

 

(To stay on top of developments in this area refer to Spend Matters Solution Map)

 

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