Services make up a significant proportion of indirect spend, but they are often overlooked when organisations look to tackle and control spend.
This is not due to unwillingness to control services spend, but due to the fact that it can be one of the hardest categories to control due to its complex nature of service orders and the associated pricing that goes with it – including variables such as time, time and materials, and deliverables.
Throw into the mix, ad-hoc requests for prices being made off contract, maverick spend being made with non-contracted suppliers at a premium and resources being wasted on lengthy manual processes – leads you to think ‘Surely there has to be a better way?’
How do you currently rate your services spend management within your organisation?
On a recent webinar, we asked our attendees this question, with the following results:
- 50% stated that there is still room for improvement and that they still spend a great deal of manual time and costs to process services spend.
- 30% stated that they would currently rate their process as good, with most of the services spend in order.
- 20% stated that their service spend management is poor, with limited visibility and control of all service spend.
With 70% responding that they could manage their services spend better, it appears that this is a common problem which needs addressing.
Customer Drivers to Controlling Services Spend
In terms of looking at these challenges from a Buyers and Suppliers viewpoint, we are able to see that both sides experience similar challenges with regards to controlling services spend.
- Wasted spend can be made on incorrect orders because a defined ordering process is not followed, so services might be ordered which are not fit for purpose.
- Maverick spend can take place outside of service contracts with suppliers due to the complex nature that services can encompass – it is not as simple as one solution fits all.
- Ad-hoc pricing is generated almost on a case by case basis, as the service will differ on each occasion that it is required – it can be difficult to fix a set price.
- Limited spend visibility – unlike an eMarketplace where all spend can be captured and reported upon, service spend can be difficult to keep track of if there are many different buyers working directly with many different suppliers.
- A great deal of manual time can be expended on processing orders manually, as opposed to having these service orders streamlined through an eMarketplace.
- Order errors can occur due to the complex nature of services, especially if the process needs to be accepted manually and then copied across into another solution.
- Invoicing and tracking can be further complicated against orders, as there will not a single record to compare against, there may be multiple records which relate to a single service order.
- Longer invoice payment cycles can become a reality as there is more manual intervention which needs to take place with services spend if it is not automated.
At Science Warehouse, we are here to help you take on the challenge and get control of your services spend.
We offer an eServices solution, which takes your current eMarketplace and extend this to also include service spend so you can ensure you retain full control, all on a single platform.
By Jhoyed Ali, Pre-Sales Consultant at Science Warehouse.