IT Services

The State of Services Procurement Technology: A joint research study by SIG & Spend Matters

State of Services Procurement Technology research study
Organizations spend tens of trillions of dollars a year globally on services. It’s not surprising why: The world is shifting from a goods and manufacturing-based economy to one where outcomes are delivered “as a service” — whether that’s traditional labor, complex services (e.g., BPO, professional services) or even the outsourcing of goods production through contract manufacturers. On average, services account for around 50% of spending on third-party suppliers, ranging from 20% to 80%, depending on industry and specific organizations. 
 
Because of this vast overall expenditure and the distributed nature of services spending throughout the enterprise, there are potentially significant opportunities to reduce the cost of services. What’s more, in many organizations, services spend ownership is, in practice, distributed across the organizations’ functional units (e.g., legal, marketing, IT), and procurement involvement can be limited or even resisted. This creates opportunities to obtain savings and improve services outcomes by increasing visibility into and rationalizing and automating related sourcing and performance management processes.
 
Yet the question then becomes how to obtain these improved results. Over the past several years, procurement practitioners have told us repeatedly that processes and technology for the management of services are not as robust as those for goods and materials, meaning there is much more to do to gain better visibility, influence and control over services spend. Despite the tens of trillions of dollars, organizations spend on services each year, how organizations use technology to support their sourcing and management of services has not been analyzed to any meaningful extent.  
 

State of Services Procurement Technology Survey

 
Morgan Zombolas, Marketing Engagement Manager, Spend Matters

Developing a Clear and More Certain Path to Digital Transformation Success

Digital transformation success

SIG and Globality, the world’s only AI-powered Marketplace and Platform for B2B services, partnered to produce a study looking into why B2B services remains one of the greatest untapped opportunities to drive business value


Almost 70% of Globality and SIG survey respondents indicate that they are either proceeding as planned or are now accelerating their digitization initiatives.

However, bridging the gap between intent, action, and a positive outcome has never been an easy endeavor. In fact, and as pointed out in her latest book, Trade wars, pandemics, and chaos: How digital procurement enables business success in a disordered world, Dr. Elouise Epstein talks about how people are coming clean about the challenges with their existing or historical tech. In other words, organizations need more than just a desire to digitally transform the enterprise if they hope to avoid the same pitfalls that have undermined initiatives in the past.

The purpose of this article is to leverage the insights gained from the Globality and SIG survey to create a clear and more certain path to digital transformation success.

Clear Benefits

According to most survey respondents, there are several priorities when it comes to digitization in critical areas. These top priority areas include the rapid identification, selection, and engagement of suppliers, the ability to react with speed to market dynamics, and the capability to drive revenue through innovation.

While varying degrees of organizational maturity regarding procurement processes may result in some differences in the priority of identified objectives, there is generally no argument that the benefits of a progressive digital strategy are clear.

Geoff Talbot, Chief Growth Officer, SIG

Case Study: How Fossil Realized a 44% Cost-Savings Strategy

energy savings

Whether your company’s focus is to build smart applications or update mobile apps for end-users, to increase intelligence using advanced algorithms, or to look at opportunities to automate internal operations to drive high-value outcomes, there’s no denying that digital plays an increasing role in everyday operations of companies across all verticals and sizes.

As companies worldwide push to drive digital transformation, procurement leaders are being challenged to strategically influence spending, amidst a global climate full of talent scarcity and the need for immediate cost optimization.

Through a strategic partnership with Fossil, we helped the executive leadership team to increase quality, productivity and utilization as they moved from working with a 300-person offshore team to a 180 person Global Insourcing Center “GIC” team through our unique offshore model.

THE CUSTOMER

A US-based, vertically integrated global retail and manufacturing company that specializes in a diverse portfolio of lifestyle accessories. This industry powerhouse operates an extensive brand portfolio and a wholesale distribution network across 150 countries and 500 retail locations.

THE PROBLEM

The company had an extensive outsourcing presence in India for years but recently had been adversely affected by cost overruns, under-performing contractors, and poor resource management processes. All were creating a significant drag on productivity and profitability and distracting from the core focus of being a fashion trendsetter and market innovator.

The objectives established for the outsourcing operation were not in dispute. The culprit was the deteriorating execution. The company wanted to regain control in its approach to outsourcing.

THE SOLUTION

After extensive evaluation, the company partnered with SMC Squared to strategically “right-source” the execution.

Patricia Connolly, CEO and Co-Founder, SMC Squared