The state of services procurement technology (Part 2): The key process improvements and tools organizations are adopting to take their services category performance from good to great

A person is not a widget — and no matter how hard one tries to manage the two with the same technology, the effect will always feel like shoving a square peg in a round hole.

Such has been the underlying rationale of technologies like the vendor management system (VMS) since their creation and popularization over the past 30 years. Yet even with broad adoption of technologies like VMS among enterprise businesses today — research firm SIA estimates VMS adoption above 80% globally for firms with more than 1,000 employees — there is still an open question of whether the services mega category at large is fully addressed by technology.

In fact, as the scope and nature of services spending changes to include different kinds of work, workers and outcomes, the importance of expertly managing services spending is due to become a critical issue for procurement organizations. That is, if they can overcome the key initial obstacle of gaining enough stakeholder influence to touch the trillions of dollars of services spend distributed across the enterprise.

To answer these and other questions, SIG and Spend Matters conducted a survey of procurement practitioners to get a pulse-check on the state of service procurement and corresponding technologies.

In this Spend Matters PRO analysis, we examine a section of these survey results to better understand what technology solutions organizations are using to manage services.

While most standard procurement technology solutions on the market were not purpose-built for services procurement — with the main exception of VMS for staffing and for SOW-based services — S2P, CLM, P2P/e-Procurement solutions are nevertheless being used to process services spend in some way. In analyzing the survey results we ultimately aimed to understand the level of satisfaction with managing services procurement in general (what are the levels of satisfaction with different facets? and are organizations looking to improve?). From there we aimed to understand what technology is being used, how many solutions are being utilized, and see whether purpose-built solutions ranked higher in satisfaction than non-purpose built.

Our key takeaway: Procurement organizations are just beginning to scratch the surface of the services spend opportunity, and their application of a mixed toolset indicates there is still a major opportunity for both upstarts and established vendors to tackle this mega category in more effective ways.

To understand why, let’s dive into the survey results.