Successful sourcing transformation, including digital upgrade projects and source-to-pay technology implementations, is no small feat, and not done in isolation.
Most procurement organizations on the path to digital transformation engage an ecosystem of service partners throughout the process to help define strategy, target operating models, create project portfolios, build capacity and plan the implementation – then partners execute them and maybe even activate new processes through various forms of outsourcing and managed services.
This is a tall order, especially how these vary depending on different areas of spending and the ability of stakeholders and organizations to fund and manage change. Large-scale improvement in purchasing value and agile “operating models” appear to be a priority for many sales managers, but achieving it is elusive.
New digital capabilities are certainly part of this conversation.
At Spend Matters, out of the hundreds of vendors we cover in the S2P space, we thoroughly assess over 70 of them in our SolutionMap benchmark, where our analysts score over 500 RFI requirements on S2P.
And while this gives us unparalleled insight in terms of technology, we don’t have such in-depth information about the hundreds of service providers in the ecosystem. Nobody either. We watched.
There are a few good outsourcing consultancies that look at BPO mega-companies and one that looks at large operations consultancies. But there is no single source that scours the ecosystem of management consultants, S2P technology implementation companies, BPOs, and the “long tail” of Managed Service Providers (MSPs).
Thus, recognizing the importance of key procurement services partners, Spend Matters is launching a formal procurement services market coverage and will release a 2021 “Procurement Services Market Landscape” Report Series and Supplier Directory associate.
This is an initiative led by Spend Matters analysts Pierre Mitchell and Xavier Olivera to help procurement understand the distinct capabilities of leading procurement transformation service providers and the broader ecosystem in which they operate, including understanding trends within and across market segments. (Spoiler alert: New digital capabilities are a game-changer, and some vendors that haven’t invested are being left behind.)
The research results will be detailed in a Spend Matters PRO series starting tomorrow.
“Leading consulting and service companies are combining purchasing results with digital delivery models,” said Jason Busch, founder of Spend Matters. “Professional services companies – from strategy and operations consulting to Big 5s to BPOs and ISs to MSPs and stores – are carving out white space in the market. I am very pleased that Spend Matters is officially initiating coverage of this market to help Global 2000 make more holistic solutions decisions that increasingly integrate a diverse set of strategic, operational, technology and BPO partners.
The series and continuing coverage won’t focus on ranking service providers by generating a single quadrant, especially since buyers and use cases are so diverse. And as most of our readers know, we’re not big fans of such a blunt averaging instrument approach, even though we have the data like in our procurement technology SolutionsMaps. Instead, our approach will focus on describing the different service segments and the characteristics of those segments to help identify the best suited strategies and potential partners. We are delighted to have the trust and support of so many well known brands and companies that should be better known in the market.
The report features over 30 vendors of all shapes and sizes. And we’ve organized them into six types of procurement services (and their value propositions):
- Source-to-pay technology specialists – These specialist consulting firms will help to quickly and efficiently implement and optimize key S2P applications and suites, as well as other tools.
- Global Councils – These companies, including the Big 5, have global reach and support across a range of services, even beyond S2P.
- Strategy advice – The C suite of buyer organizations definitely uses one of these companies, and most of these consultants are developing tremendous capabilities.
- Regional companies – Use these consultants for local presence, cultural fit and specialization (and maybe even lower rates).
- Global BPOs – Customers of these companies benefit from a one-stop shop for large-scale digital transformation and global operations.
- MSP – These companies occupy the “long tail” of the market and offer niche activation by category, process, resource, advantage, business model, etc.
In several PRO subscription posts over the coming weeks, our analysts will provide insight into each of these categories, segment vendors, and detail each company’s capabilities in the Procurement Services Directory. Each of the Procurement Services Partner Profiles includes:
- Company demographics and range of services by geographic region
- Overview of services and capabilities and assessment of differentiators
- Category specialties
- Business models by type of project
- List of frequent competitors actually seen in the field
- Summary supplier analysis with highlights of differentiation
Profiles are provided as PDFs of each company and also feature vendor self-rated ratings on over 25 capabilities where they feel they compete (or don’t), differentiate, or truly are best in class. . If they claim to be the best, we ask for details and case studies / references, and we downgrade those who are not the best (versus providers who can warrant their self-assessment). We also use alumni and customers of these vendors to help us provide additional validation.
Capabilities generally break down into transformational (procurement strategy, digital strategy, diagnostics, benchmarking, talent / organization, project / program management, training, etc.), S2P core (spend / procurement analysis, category management, execution sourcing, final expenses, direct expenses, CLM, SRM, P2P, etc.), “extended” areas (supply chain, working capital, shared services, risk / compliance, IT sourcing), and a deepening of certain skills ” digital ”.
While this is only our initial analysis of this overview of the Integrated Procurement Services market, we hope to provide updates to improve understanding of the market and add more players to our coverage. over the coming year. We hope the new series will fill a few gaps for procurement managers, service buyers, service providers, and technology providers looking to forge strategic partnerships or influence the market. We will also be collecting feedback from ecosystem participants to guide us on future directions for this ongoing coverage.
The study authors recognized the need for this information and understood the value that a market snapshot could have for executives who are planning digital updates for their business but are unfamiliar with all the players and options.
“The idea of procurement as a service is intuitive for CPOs to fuel the evolution of procurement, and the procurement services market is becoming a critical accelerator on this journey,” said lead author. Pierre Mitchell. “Unfortunately, the market is fragmented and still burdened with legacy models, but there is hope as we see digital disruption starting to occur to the benefit of buyers, if they know how to sift through the complexity. We hope this new Spend Matters area of coverage will help deliver that order out of the chaos. “
Analyst Xavier Olivera sees the study as a vital piece of the puzzle for businesses.
“This new procurement services report and directory naturally complements Spend Matters’ SolutionMap vendor ranking and TechMatch’s ability to match a business’s needs with a vendor’s capabilities,” Olivera said. “The research and directory give our readers and customers a more complete view of the strategy and transformation when it comes to S2P solutions and their adjacent processes, covering the missing link in creating value for an S2P solution.”