During my client presentation and meetings it’s a balancing act between implementing quick indirect procurement wins for upper management while updating internal systems that allow the in-house team to work more effectively in order to be more proactive going forward. In other words, working to satisfy the needs of the:
Seems like different companies have different objectives when it comes to performing a contract compliance audit. Some want to get a better sense of potential risk —their goal is to uncover what is working well and what is not within their current process (and utilize the results of the audit as an improvement checklist). Some want to narrowly focus on finding cost-savings within the most costly area of their procurement activity —and utilize the results as a prioritized checklist to help bring the company necessary operation cost reductions.
While traveling I have been trying to catch up on my reading and an article, published on Procurement Executive this month, citing research conducted on Fortune 1000 company executives caught my attention. Some of the article’s main statistics (and my thoughts in italics):
A procurement executive’s ability to bring in the right supplier base under the best terms is critical in order to increase quality and efficiency across the organization in the leanest way possible. However, once these supply bases are in place, being able to manage them is another critical component —for both the company executive counting on VMS (Vendor Management Systems) for operational purposes and the procurement practice leader looking at the day-to-day streamlining these programs bring.
I am working on a series of articles about the most common challenges we come across when helping companies get control of indirect spend –covering everything from strategic cost analysis and visibility to more tactical classification and process implementation. Are there any specific challenges that you come across most often that you’d like to see included/are top of mind? Thank you in advance for your input here, via direct message or via LinkedIn
We recently conducted a webinar with HRO Today called “Best Practices in Managing and Analyzing Services Procurement Spend.” During the webinar (link) we asked our audience about their Statement of Work (SOW) Management.
| What’s keeping you from putting a strategic process in place for management of your SOWs? | |
| Little/no value to me or my organization |
5.26% |
| Change management too difficult |
26.32% |
| Don’t know where to begin |
63.16% |
| Have tried before and not been successful |
5.26% |
Current economic conditions and strong competition are forcing companies to seek new ways to reduce costs and enhance profitability and cash flow, with businesses feeling the pressure to improve procurement effectiveness.
The last part of the year means one thing for most of us –a microscope has been placed on all 2011 expenses, and a mandate for a leaner more efficient use of resources/spend management strategy has been placed for 2012. And as a member of the procurement team, all eyes are on you for answers and leadership on this matter. Sound familiar? You are not alone.
Auditing and implementing MSP best practices can help uncover hidden cost saving opportunities throughout the organization. One of the key areas of savings that is always overlooked is SOWs and workforce classification –especially when it comes to consultants versus contractors.
Welcome to the services procurement community blog where we are hoping to educate and learn people’s thoughts and opinions on the management of the services procurement space, particularly those that are resource or milestone based engagements. We choose the name “Services Procurement Community” because we encourage interaction and discussion around, what we are working hard to make, industry-relevant content. Thank you for visiting us and becoming part of the movement!
As stated by Procurement Leaders, services procurement encompasses the strategic management and purchase of complex category services such as contract labor, consulting services, marketing, print, travel and legal services. Services spend represents a tremendous expense and there have been estimates that nearly 50 percent of corporate procurement spending is for services. However, few organizations have the visibility into these services like they do for goods and materials.
Attend any conference or read any research discussing the people side of indirect spend and most likely you’ll quickly relate to the pain points. Subsequently, leading organizations are seeking methods to manage this critical commodity from both a process and a cost standpoint. Managing the traditional contingent labor commodity has matured over the past several decades, however the remaining categories of contingent labor; independent contractors, Statement -of-Work, outsourced, off-shore and all those other services, remain highly unsupervised. In Aberdeen Group’s 2011 Contingent Labor Survey only 14% of organizations currently have high visibility into SOW-based projects and services. So what are the must do’s to manage the “people” side of indirect spend?
