Enabling professional services procurement to innovate as well as control cost

Undoubtedly, cost control is one of the most important functions procurement provides to a business where professional services are concerned. However, in today's fast-paced, dynamic business environment, professional services procurement also has another vitally important role: enabling innovation.

Cost control will remain a priority in the short-term

Creating and optimising a business' commercial relationship with its suppliers will remain the primary responsibility of the professional services procurement teams and category managers. 
 
In the new business environment, especially in tough economic conditions, there will be extra pressure on controlling costs and maximising the value of professional services and consultancy spend – getting visibility of spend, eliminating rogue spend and managing outcome related milestones.
 
But at the same time, these new business environments will also demand innovation.

Enabling Innovation for long term growth is just as important

The changes to market conditions and customer behaviours will create new challenges (and opportunities) for every business. They will need to find solutions to new commercial and operational challenges. 
 
As businesses look for these solutions, professional services procurement teams need to be able to enable and encourage innovation but, at the same time, defend against rogue spend. 
 
In other words, professional services procurement must support and facilitate an increasingly diverse range of engagements with both new and existing suppliers, instead of being seen as red-tape or something to be 'worked around'.

The Digital Solution

Existing professional services purchases for many businesses, especially tail spend purchases, will be shoe-horned into an existing procurement tool or no-tech solution (spreadsheets) that's not quite fit for purpose. 
 
Of course, this mismatch leads to decentralised, uncompliant, rogue spend behaviour as the business' need to get things done rapidly overrides the slow, cumbersome ill-fitting solution.
 
For professional services procurement teams to effectively support and enable innovation, alongside their primary cost control responsibilities, a dedicated, scalable software solution is essential. 
 
The digital solution must work in complete unity with a dynamic, agile process of innovation -providing automation, enhancing visibility and improving end to end control, for example:
 
Leveraging existing longtail service providers' potential
As the business' requirements for professional services and consultancy change and adapt, it's reasonable to assume there will be a correlating increase in the need to work with broader network of service providers – with more projects being undertaken by suppliers in the longtail.
 
Of course, centralising its professional services supply chain into an intuitive, searchable online platform where users can collaborate, and rate/review supplier performance, is a great way for a business to understand and leverage the capability of its existing longtail of professional services providers.
 
Enabling the business to engage new services providers within a compliant framework
In addition to a business needing to engage its long tail of existing service providers, it is also reasonable to assume there will be a need to seek out and engage new service providers.
 
Without easy-to-use, compliant software to manage and automate this process, it is difficult for a central professional services procurement team to stay in control of the onboarding of new service providers, which leads to inconsistent rates, contracts and commercial terms.
 
Managing the potential increase in tail spend activity
Another practical consideration is as the volume of outcome-based work is being done by service providers, so does the need to manage performance - against contractual terms as well as for specific project-related milestones.
 
Statement of work management software, like Zivio, enables professional service procurement teams to work alongside their stakeholders to control outcomes, quality of deliverable and performance against milestones. 

Summary

In the short-term, controlling cost will continue to be a critical focus for professional services procurement teams. But innovation is also key for long-term growth, and arguably survival, for every business. For professional services procurement teams to manage both responsibilities effectively, they have to enlist the help of modern, intuitive software solutions. 

Useful resources

AI Powering Professional Services Procurement Insights

Unlock strategic business value through procurement with AI-powered real time, end to end reporting.

Improving Long Tail SoW Supplier Performance Management

Learn about the significant benefits of applying supply chain best practices to managing the performance of your long tail of SoW suppliers

Milestones

Learn about milestones and how to use them to manage statement of work contracts.