What’s keeping you up at night? CPOs today are under continued pressure to reduce costs and find new sources of value – and of course, manage risk.
At the same time, CPOs want to become more strategic advisors to the business. We’ve found the perfect opportunity to help you achieve those goals and more.
As a CPO, you probably manage millions of dollars’ worth of spend on services. Think of all the money your company spends on consultancies, IT services providers, marketing agencies, law firms, accounting firms, facilities management companies and more. These services providers operate across the enterprise, perform vital work and deliver enormous value.
You manage the contracts and rates for these services, but beyond that, how much attention do you pay to that spend? Do you know whether these services providers are delivering high-quality work? Do they hit deadlines? Is your business getting good value for money?
Most of us are guilty of under-managing services providers. That’s one of the key findings from a groundbreaking new research study published by SAP Fieldglass in collaboration with Oxford Economics, titled Services Procurement Insights 2019: The Big Reveal.
Risks Associated with Under-Managing Services Providers
The study shows that under-managing services providers can lead to delays and overspend. For example, the research reveals that one in four projects done by services providers is not completed on time or on budget. Quality is another surprising blind spot, as only one in four executives is highly informed about suppliers’ quality of work.
There are other risks, too. Many services providers have access to clients’ confidential systems and data, which can pose a security risk. The study found that 23% of organizations experience digital security breaches with services providers frequently or nearly every engagement. Take a moment to let that sink in.
There’s also the threat of maverick spend, which causes a real headache for CPOs yet remains commonplace. Our research found that 22% of organizations experience maverick spend with services providers frequently or nearly every engagement.
You also need to keep compliance in check. If you work in a regulated industry, you are responsible for ensuring that your suppliers have the appropriate certifications and training to complete their work safely. If you take a hands-off approach, you run the risk of compliance issues.
There is a golden opportunity here to deliver greater value to your organization. The research presents four key actions companies can take to improve management of services providers, helping them maximize the value of these engagements, improve ROI and mitigate risk. The SAP Fieldglass study is packed full of valuable insights for CPOs and it’s well worth a few minutes of your time. Happy reading!
To take a deeper dive into services procurement, SIG members can access the on-demand webinar with SAP Fieldglass to learn how workforce leaders can realize more value from service providers.
Molly Spatara is the Global Vice President of Brand Experience for SAP Ariba and SAP Fieldglass. She has extensive BtoB and BtoC marketing and product development experience across multiple industries as well as a strong track record of designing and accelerating digital-first, data-driven capabilities yielding robust business outcomes. Previously, Molly transformed global marketing and communications for SAP Fieldglass, helped build and scale Accenture Digital, created Accenture’s digital marketing capability across global market units, and led marketing for Accenture Analytics.
Molly inspires her teams and others to develop creative, omni-channel programs that drive measurable awareness, engagement, and preference across audiences, underpinned by compelling thought leadership. A strategist and business operator at heart, Molly has a passion for incubating and scaling new capabilities, developing her teams, leading large-scale change, forging consensus across stakeholders with oftentimes competing priorities, and simplifying complexity. She is curious and believes challenges more often represent untapped opportunities.