Manage the Transactional Lifecycle – 10 Services Procurement Secrets (No. 1)

One of the challenges of the services procurement ecosystem is that there is too much “group- think” from those that have focused on the area – either as practitioners or providers – for their entire careers without spending time in other parts of the business. But by looking outside of services procurement and learning from the direct (and even indirect) materials supply chain, there is a tremendous amount we can gain that can translate to better contingent workforce activities.

In a 10-part series exploring lessons learned from the direct supply chain, Spend Matters will share a number of secrets from the supply chain trenches. We begin today with our first tip: emphasizing the importance of managing the transactional lifecycle. In this regard, it is important to have an efficient and effective execution process for buying, receiving, approving and paying for services spend.

Spend Matters research and advisory work suggests that compared to direct procurement, indirect purchase-to-pay (P2P) activities are generally less challenging, although they are clearly not at the level they need to be in many organizations. Services procurement is certainly a key tool, and the use of a VMS is the most preferred approach, and many practitioners like the flexibility of being able to get this from 
a managed services provider (MSP).

But the biggest issue lies with the MSPs themselves and getting them to manage the contingent workforce services network holistically – and not merely meet relatively artificial key performance indicators (KPIs) defined in a service level agreement (SLA). Garbage in equals garbage out – organizations must encourage MSPs (and the technologies they either bring or help select) to manage the end to end transactional lifecycle.

This analysis is based on the Spend Matters research study, Applying Supply Chain Rigor to Contingent Workforce Management, which is available for limited period of time for free download, via the previous link, in the Spend Matters research library.

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