Making proactive professional services tailspend management a reality

As market shifts and changing consumer expectations increase a business' need to innovate, adapt and evolve, so too does the need to engage a wider, broader range of suppliers and service providers – pushing more professional services and consultancy spend into the long tail.
 
How do lean procurement teams turn this into an opportunity without adding more workload?

A challenge considering lean procurement principles

Lean procurement means a service provider has one point of contact across the entire buying organisation, with one contract and commercial agreement in place.  In practical terms, this involves a service provider being able to work with a single procurement or category manager.
 
Of course, as more spend goes into the longtail, this increases the number of service providers and consultancies a category manager has to manage a relationship with.
 
It is natural and understandable that the category manager's time and attention is focused on the short head of service providers with the largest number (or value) of engagements.
 
For those contracts or service providers in the longtail, they only warrant attention when there is a critical need – usually when a contract needs renewing. And often, in the pressure to get things done, the business finds a way to work around these little inconveniences, leading to rogue spend.

Proactive Tailspend management can be a reality - with huge benefits

The tailspend is where important work gets done. It's those where innovation happens, where new ground is broken and where new strategic supplier relationships are forged.
 
So how does a lean professional services procurement team make proactive tailspend management a reality? The answer is smart software.
 
Using smart software to automate and augment the efforts of the professional services category manager(s) enables a business to:
 
Deeper understand the tail service providers
Simply consolidating, classifying and tagging service providers into an single online platform enables the procurement teams to quickly search, find and browse all the capabilities in their professional services supply chain. This helps support the business when new requirements arise and defends against rogue spend or uncompliant onboarding
 
Standardising engagements
The visibility of the entire professional services supply chain means it is then possible to standardise contracts, commercial terms and like-for-like rates. This helps the business ensure they are getting the services they need at the best possible rates, without the need for manually reviewing hundreds of different contracts.
 
Automation of day-to-day tasks
Chasing signatures, checking documents and setting reminders for renewals all takes time. Smart software with e-signatures, document approvals and automated reminders and notifications save the average lean procurement team a significant amount of time every day.
 
Flagging opportunities for better outcomes or terms
A professional services category manager's role is much more than sourcing suppliers and doing deals but knowing when there is an opportunity to work closer or more efficiently with a service provider is key. Having visibility of milestone delivery, performance against SLAs and levels of spend with interactive dashboards can create massive opportunities for cost savings.

Summary

As innovation pushes more projects into the longtail, professional services procurement teams are presented with a great opportunity to control costs, ensure compliance and deliver great outcomes but smart software is the key to making proactive tailspend management a reality.

Useful resources

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