The $3 Trillion Elephant in the Boardroom
One of the biggest levers leaders have on cost, risk and speed is also one of the least understood at board level.
Every executive team is judged on the same handful of things: protecting margin, controlling risk, and moving fast enough to stay ahead. One of the largest levers on all three sits in a part of the business that rarely reaches the boardroom is how an organisation buys, governs and manages the services it depends on.
The scale makes it hard to ignore. According to Staffing Industry Analysts, Statement of Work (SOW)-based services projects in the Americas were worth $3.33 trillion in 2024, accounting for 39% of all managed service provider spend, the highest share SIA has recorded. For organisations that rely heavily on external suppliers, especially those on tighter margins, services are among the largest controllable costs they hold, yet the least controlled.
That matters across the C-suite, not only in procurement. Managed poorly, it surfaces for the CFO as margin and spend leaking away, the COO as delivery risk, and technology and transformation leaders as programmes that overrun or consultancies still holding system access long after a project has closed. Each is a symptom of services bought and delivered without the visibility and control applied elsewhere.
Visibility Often Stops at the Purchase Order
Most organisations see when a purchase order is raised and an invoice paid, but everything in between is far less visible. Once a service engagement begins, scope, milestones, deliverables, supplier performance and commercial changes scatter across outdated tech, spreadsheets, inboxes and individual teams, leaving visibility into spend but not into delivery. Services are also frequently classified and tracked like goods or contingent labour, distorting the data leaders need to shape category strategy. Without a clear view of what was agreed, what changed and what was delivered, performance is hard to judge and realised value hard to prove.
Small Gaps Create Significant Cost
Services procurement processes rarely fail dramatically. Cost accumulates through smaller issues like poor scoping, project changes that go uncaptured, rogue spending outside proper process, and work awarded directly where competitive sourcing would have delivered better value. Individually, each looks manageable but, across hundreds of engagements, the impact compounds. The scale of that leakage is well documented by World Commerce & Contracting’s research, with Deloitte, attributing around 9% of contract value, up to 15% in complex sectors, to poor contract management, driven by exactly these factors.
Delivery Needs a Different Operating Model
What makes services different is what is being bought. Goods are received and contingent labour provides capacity the organisation directs, whereas a service is an outcome the supplier owns and delivers. Its value is set not at the point of purchase but across the engagement, in how clearly work is scoped, how suppliers are held accountable and how delivery is governed. This is also why workforce-centric tools can struggle. Vendor Management Systems (VMS) were built with a primary focus on managing worker populations, rates and labour-based processes. However, services procurement adds requirements around scope definition, supplier accountability, delivery governance and commercial oversight, which fall outside what these tools were designed to manage. Services Procurement Systems (SPS) are purpose-built around these supplier-led models, covering the full engagement lifecycle and reducing the manual effort that fragments oversight. VMS and SPS were built for different kinds of work delivery channels, which is why one cannot stand in for the other.
Turning Visibility Into Control
Treated with the same seriousness as any other major business cost, services procurement stops being an admin task and becomes a lever on pace and performance. Using the same controls applied elsewhere across sourcing, scope, commercial oversight and delivery helps protect margin, reduce risk and ensure services spend delivers value. Services will remain a major cost whether or not they are actively managed, and the real question is whether a leadership team chooses to manage them with the rigour every other strategic part of the business already gets.