Enabling Effective Services

Procurement Through Technology

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 Challenges of Managing Services Procurement

Source &
Engage Manage Pay
Contract

Review
Create Select Create Onboard Submit Approve
Supplier
Requisition Supplier SOW Contractors Deliverables Deliverables
Responses

Challenges:
• Measuring quality of service delivered
• Control of supplier employees with
access to systems and facilities
• Central visibility into suppliers activities
• Vague statements of work
• Complex commercial arrangements
• Fragmented, redundant supply base
• Enforcing use of preferred providers and
pricing
• Unique and dynamic end user needs

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Active Management

When evaluating technology capabilities, it is necessary to determine which system

is a best fit for each of the service-based categories. Which means you may need
multiple systems.

Simple services, such as those that utilize catalogs or general rate cards, may be
done in a P2P system if it is determined to be the best fit.

Organisations are starting to see the benefit of “Actively Managing” their

selected categories through more robust collaboration, compliance and relevant
functionality.

Decision Engagem
Contract Sourcing Delivery Invoicing Payment
Support ent
“Active Management” is the
differentiator
Active Category Management

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Services Procurement Opportunity

Historical client focus on e-sourcing, contract management and e-invoicing

Opportunity for deeper category management of Services spend

Specific technology targets un-realised Services Management opportunities:

Improved visibility into post-contract process
Procurement guidance and active management
Sophisticated process management controls, beyond spend and invoice automation

Decision
Contract Sourcing Engagement Delivery Invoicing Payment
Support

O P P O RT U N I T Y F O C U S

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Opportunity Focus

Budgetary Controls Enforceable top down to SOW line item / deliverable level; manage
CAPEX vs. OPEX
Cost Accounting Enforceable top down to SOW line item / deliverable level; dynamic
allocation, increased accuracy in accruals, speed to pay
Competitive Bidding Bidding events at the project event / SOW level, not solely top level
Contracts; clearer definition of scope
Supplier Guidance Tactically source agreements across preferred suppliers based on
performance metrics; actively manage tail spend
Supplier Collaboration Back/forth negotiation, collaboration on terms, align
characteristics/deliverables back to scope, redlining within tool
Characteristic & Commercial Support of endless usage scenarios and deliverable types (fixed price,
Variability recurring fees, unit-based pricing, SLA/KPI’s, forecasting vs.
consumption, retainers, holdbacks, T&M, etc.)
Chain of Custody Audit, traceability on who is touching project, PII, access, NDAs, ITAR,
etc.
Consultant On/Off Boarding Compliance, Security, ID Management
Consultant T/M Time Sheet / Expense tracking against project budget

Revision Management Granularity in Active Management within SOW revisions

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Just tell me what categories go where?? …

Contingent Workforce Consulting/SOW Categories that meet the “Active Management” criteria

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The Technology Eco-System

Existing IT environments may all have a role

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The Technology Eco-System - Considerations

Customers Collaboration Cloud

- The business units and users - Engaging vendors as well as - Available anytime, anywhere
served by Procurement internal users

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 Evaluating Procurement Categories

YES MAYBE NO

Category
Facilities Management
Information Systems
General Business Services
Research
Engineering & Construction L1 Capital Projects
Professional Services
Financial Services
Human Resources
Resources to be
tracked or Preferred Vendors Collaborative & Chain of Custody
Sub-Category ONB/OFB enforced tactical sourcing important
Building Operations
Hospitality Services
FM - Security Services
Outsourced Infrastructure Services
IT Services, Direct
Conference/External Speakers
GBS – Translation Services
Primary Market Research/Analytics
R&D Regulatory Services
Project Control
Consulting, IT Strategy
FS – Tax/Financial Services BPO
Talent/Learning

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Janitorial Services Example
Why it might be a fit for either solution?

P2P Specific Services

Procurement Technology

Simple compliance to a rate card Active Management of the category

 “I just need an invoice at the end of the month that  I need to know who is on-site and when they are on-
complies with the negotiated rate for the service” site
 Everyone on-site needs a badge
 I need to ensure that people on-site have been vetted,
regardless of the work they are performing
Sourcing Contract
Invoicing &
Payment
 I want to ensure that no one that is part of the team is
on our “do not hire” list

Decision Engageme
Contract Sourcing Delivery Invoicing Payment
Support nt

Active Category Management

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Today’s Challenge: Active Management Across the
Evolving Landscape

High Staff Statements of Work Outline Capital

Augmentation Agreements Projects

Construction
ERP/System Implementers
BPO
PRICE

Partnership Agreements
Strategic Consulting
Outsourcing Agreements
Services Agreements

Operational Consulting

Project Work
Professional/IT

Staff Augmentation
Low
Simple SERVICE TYPE Complex

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 Cost Savings and Operational Efficiencies

Key Drivers Est. % of savings over two years

Rate rationalization 3-6%

Competitive bidding 3-5%

Supplier rationalization 1-3%

Service type classification 2-4%

Discounts 2-4%

Spend visibility 1-2%

Payment process efficiencies 1-3%

Program office efficiencies Many soft savings opportunities

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Recommended Approach

• Perform standard spend analysis

Analyse • Review breakdown with customer

• Review active management criteria with customer

Evaluate • Review steps needed to enable active management

Plan • Develop category wave plan across your technologies

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