The Procurement Services Market Landscape Report and Directory (Part 9) — Series finale

This final installment of our Spend Matters series — “Procurement Services Market Landscape Report and Directory” — will summarize the results of our research, which sheds light on an important sector that had not been explored much. To date, the study has included:

• Part 1 highlighted the study findings, how the market has six distinct groups and where 34 key providers fit into those segments (see our services vendor directory to learn more about the providers and view their PDF profiles).
• Part 2 detailed how procurement professionals can understand the market and the six market segments shown below and the providers in those groups.
• Parts 3-8 analyzed the six services groups: S2P consultancies, regional consultancies, managed service providers (MSPs), strategy consultancies, global consultancies and BPO providers.

The study started with the premise of procurement as a services firm, and more specifically, a high-impact professional services firm offering both transformational and operational services in spend/supply management. The enterprise’s need to manage external value chains and partners has never become more critical — especially given all of the changes to the business environment related to Covid, inflation (which impacts suppliers procurement and financing too), global supply chain issues, innovation, digital disruption, geo-political risk, talent shortages and increased competitive intensity that are all driving a need for more agility and resilience in the business.

Unfortunately, even with this backdrop for the need of procurement to be a strategic business partner to help the business navigate these choppy waters, too many of the crew are busy bailing water and plugging holes in a ship struggling to stay afloat and keep their heads above water. According to CAPS Research from its 2018 benchmark database, 65% of procurement resources are operational (non-strategic). Let’s face it, procurement needs help with its services business because its current service portfolio is clearly too tactical and the digital ship that the crew is operating is too creaky, and the old crew members are retiring and the best new crew members are jumping ship.

Luckily, the “captain” (CPO) has a lot of choices in a procurement services market that is actually larger than the S2P tech market! The services market is no longer about consultancies doing the latest projects du jour or BPO providers replacing your crew (and maybe you too) with lower-cost crew members to bail water more efficiently in a “lift-and-shift” model.

As we jumped into the water and did a deep dive on the vast ocean of procurement service providers, we discovered a rich ecosystem of emerging service models and capabilities that are outlined in the research. In fact, the guiding principle of “Don’t make assumptions about what a supply market can do for you (otherwise you’ll invariably destroy value)” is definitely in force here. CPOs are in the driver’s seat to construct a services ecosystem that is a virtual/augmented extension of any business function (including procurement) and business-unit process that touches third parties and is impacted meaningfully by inbound value chains.

But, the ecosystem has its dangers too.

For example, a large consultancy might recommend a new ship (S2P suite) that may not be an optimal choice even though it works great for that consulting firm’s S2P practice and not necessarily the client. This isn’t a criticism of the consulting firms, because they can’t be experts with all of the tech providers. This is why many procurement leaders engage us to use our TechMatch selection advisor, but also why some of the leading consultancies/BPO providers have integrated TechMatch on the back end of their procurement capability diagnostics so that their clients can get instant S2P tech vendor intelligence based on more than 100 digital capabilities that are built upon more than 500 functional/technical requirements that we use to bench-test nearly 80 of the leading tech vendors in the space. If you’re a procurement professional and want to see if your current/potential service provider has this pre-integration (or general access to our IP), please drop us a line.

In this last installment of our research series, we will summarize the results of our deep-dive market scan, offer up an “everything as a service” procurement services delivery model (and an integrated “transformation as a service” approach to the market), share insights from the study participants, and offer some practitioner recommendations.

Let’s dive in. And we promise: No more nautical metaphors ...