Adapting Supply Chain and Direct Procurement Lessons to Services Procurement

Spend Matters research suggests that the opportunity for Global 2000 companies to translate and adapt processes, lessons learned, skills and expertise from the direct and indirect materials supply chain into services is highly material. The data and observations should also serve as a wake-up call to the services procurement provider ecosystem (managed services providers, vendor management system technologies, industry analysts and consultants) that an immense opportunity remains to drive even basic efficiencies, control and continuous improvement within services supply chains.

From a relative sophistication perspective, it is safe to observe anecdotally, based on our findings, that the management of services procurement and supply chains is at least 20 years behind direct materials processes and a decade or greater behind indirect materials. Perhaps most important, Spend Matters research suggests that for companies looking for any remaining proverbial “low-hanging” procurement fruit within their overall spend and supply chain portfolio should put services at the very top of the list to drive total cost savings and management, compliance, risk reduction and overall business improvement compared with other areas of spend.

Of course, this begs the question: Is the opportunity a reflection of the relative immaturity of services procurement compared to other categories within companies? The answer is not as simple as it seems. Managing talent of all sorts is not as easy as managing materials, parts, components and finished products as they flow through the supply chain. But there are significant lessons we can apply from direct procurement to the contingent workforce as we “up our game” in the area.

We encourage you to download our full report on the topic before it becomes PRO subscriber-only content. Applying Supply Chain Rigor to Contingent Workforce Management available for limited period of time, via the previous link, in the Spend Matters research library. We also encourage subscribers and the broader services procurement ecosystem to reach out to our team to discuss the findings and how procurement organizations can adapt supply chain best practices to services procurement. This post is based on content from the broader study and paper.

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