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Business Management Review | Wednesday, February 09, 2022
Procurement organizations are only skimming the surface of the services spend opportunity. Their use of a mixed toolkit implies that there is still a significant opportunity for both upstarts and established suppliers to handle this mega sector better.
FREMONT, CA: A person is not a widget, and attempting to manage the two with the same technology will always result in the effect of shoving a square peg into a round hole. This has been the fundamental logic since the invention and popularization of technology like the vendor management system (VMS) during the last 30 years. Even with the widespread adoption of technologies like VMS among enterprise businesses today — according to research firm SIA, VMS adoption is above 80 percent globally for companies with more than 1,000 employees — the question of whether the mega services category as a whole is fully addressed by technology remains unanswered. In reality, as the scope and character of services expenditure evolves to cover a variety of tasks, personnel, and outcomes, the need to skillfully manage services spending will become a significant issue for procurement groups. That is, assuming they can overcome the crucial first hurdle of garnering enough stakeholder clout to affect the trillions of dollars spent on services across the organization.
Although most typical procurement technology solutions on the market were not designed specifically for services procurement — except for VMS for staffing and SOW-based services — S2P, CLM, and P2P/e-Procurement solutions are being utilized to process services spend in some fashion. It is intended to assess the degree of satisfaction with managing services procurement in general by evaluating the survey findings. From there, what technology was being used, how many solutions were being used, and whether purpose-built solutions outperformed non-purpose-built solutions in terms of satisfaction were the aspects taken into account.
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Procurement organizations are only skimming the surface of the services spend opportunity. Their use of a mixed toolkit implies that there is still a significant opportunity for both upstarts and established suppliers to better handle this mega sector. Due to human errors, delays, and late payments, organizations that conduct the procurement process manually are more likely to spend more. By eliminating manual data entry and associated inefficiencies, procurement software like Kissflow Procurement Cloud improves staff productivity and lowers errors.
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