The global professional services market reached a value of over $5,000 billion in 2018 and is expected
to reach $8,000 billion by 2022. One of the factors driving this growth is the increasing number of businesses using statement of work engagements to get things done.
However, alongside this growth comes another issue: professional services spend that is poorly managed or not managed at all. Rogue professional services spend is troublesome as it creates hidden costs, and off-contract purchasing which are impossible to control.
However, modern, statement of work management software, designed from the ground up to manage the complete spectrum of professional services and consultancy spend, can turn rogue spend into a business opportunity.
Why does rogue professional services spend happen?
Rogue professional services spend happens for a number of reasons:
1. When a business' existing procurement system (which may be extremely effective at controlling spend in other categories) becomes incompatible, slow or cumbersome to work with.
2. Individuals believe they are saving money by hunting down better deals.
3. Individuals are not aware there is a process for sourcing a particular service.
The risk for a business is that as the category of professional services and consultancy spend increases, so does the frequency or value of spend falling into unseen, uncontrollable rogue spend.
How to eliminate rogue spend in professional services procurement
As mentioned in the opening, modern statement of work software, like Zivio, can provide a solution to rogue professional services and consultancy (PS&C) spend.
Create visibility of PS&C spend
The first step to overcoming any challenge is to first understand it. However, without an easy-to-use, centralise place for a business to manage all of its PS&C spend, it is difficult to get an idea of the size of the issue.
Ensure adoption of processes
The next step is to remove root causes. Modern SoW management software can:
- Provide an intuitive, straightforward interface for users, reducing the painful and slow experience that can cause people to go rogue.
- Give individuals visibility of the best suppliers and best rates for any given professional service, which reduces the need for rogue bargain-hunting
- Create centralised, standard platform that helps individuals understand the processes for procuring professional services and consultancy
- Create a compliant route for individuals to onboard new suppliers where a need arises
Keep PS&C suppliers engaged
The final step in eliminating rogue PS&C spend is measurement. Defining KPIs around supplier engagement, project delivery and compliance ensures that rogue spend is controlled.
Once a business understands the reasons why it may have an issue with rogue professional services and consultancy spend, it can implement a scalable software solution for managing and controlling it.