Procurement-as-a-Service: One Approach to Meet the New Expectations of Stakeholders

Procurement today needs to show it adds significant value to the business as a whole: be that private sector, public authority or third sector. And it is not just alignment with internal stakeholders that is critical, but giving serious consideration to alignment with the overall organisational mission, goals and success. We are hearing a lot about this at the moment – but for good reason.

Procurement as a function has evolved over the years from a sharp focus on cost reduction and governance through to managing some of the controls around how the organisation spends its money, which can be significant amounts, and even helping to raise the organisation’s profile or safeguard its reputation. Buying services has also become more prevalent for procurement, and this has brought its own complexities. It is harder to compare suppliers and prices for things like legal advice or temporary workforce, for example, than for traditional goods.

Contingent labour has become a highly strategic spend category for many organisations. Management of contingent labour has developed in sophistication over the years, and better management of that category reflects the wider trend as procurement (and managed service providers) focus more on strategic objectives and outcomes rather than just cost on reduction.

For the procurement of the future, a “Procurement-as-a-Service” (PaaS) approach has been talked about in many quarters, an approach that builds on “Software as a Service” – but what might this actually mean?

In our latest briefing paper, The Evolution of Procurement – and What it Means for Contingent Labour, we look at where procurement is headed in this world of “everything as a service.” We also look at how procurement is addressing the complex spend category to meet the changing expectations of stakeholders. And we show, through small case studies, how leading practitioners are striving to position procurement as contributing to wider organisational goals.

Here is a glimpse of the considerations we cite for PaaS:

“PaaS providers (internal or external) would need to be clear about their service and its value. It would need to be packaged in a manner that allows buyers of that procurement service to see clearly what they are getting for their fees, and it would have to be available on some sort of ‘pay for what you want’ basis, which is central to the ‘as-a-service’ philosophy.

The service would also need to be capable of rapid implementation, and would need to be delivered on a well defined basis. It seems likely that in order to fulfil these criteria, it would need to be supported by strong technology. Finally, the service would need to be updated regularly to capture good practice and continuous improvement in procurement.

This approach could work well for smaller organisations that cannot afford a fully featured procurement function. But there are some issues …”

The paper is free to download here – and in our recent webinar we discuss some of the issues raised in the paper with Jon Milton of Comensura, the leading managed services provider that buys and streamlines the supply of temporary, interim and contractor labour into large businesses in all sectors. “The Evolution of Procurement – Alignment, Flexibility and Procurement-as-a-Service” is still available to watch and listen on demand if you missed it - you can  catch up with that here.

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