What are Procurement Services?
Procurement services are services provided by third-party suppliers that support, transform, or outsource an organization’s procurement processes and activities. They can take many forms, and can help teams tackle a wide range of procurement challenges — from filling skills gaps and acquiring new digital capabilities to fundamentally reimagining their end-to-end procurement process from the ground up.
What are the key types of procurement services?
There are seven key types of procurement services:
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Procurement as a Service (PaaS)
PaaS is an outsourced procurement model where all of the skills, capabilities, platforms, and resources required to manage end-to-end procurement processes are provided as a service. Elements within PaaS offerings are tightly integrated, creating opportunities for organizations to rapidly transform every aspect of their procurement operations.
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End-to-end procurement services
End-to-end procurement services span the entire procurement cycle and look at them holistically. Where PaaS provides a prove, ready-to-deploy end-to-end solution, end-to-end procurement services are typically built around the organization and tailored to its unique goals and needs.
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Digital procurement services
Digital procurement services involve the delivery of procurement technology, such as Procure-to-Pay (P2P) platforms, analytics dashboards, intelligence delivery tools, and AI-powered capabilities.
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Procurement intelligence services
Procurement intelligence services provide procurement teams with the data, analytics, and reliable insights they need to make informed supplier and purchasing decisions at speed. These services augment the data and intelligence held within procurement organizations, and bring valuable new context to it to help procurement teams outperform their competitors and spot emerging trends at the earliest possible opportunity.
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Procurement Consulting Services
Procurement consulting services usually involve teams coming into a procurement organization, examining how it operates, and making recommendations to help improve those operations. Often, procurement consulting service providers will also conduct that transformation work themselves as part of their offering.
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Procurement Outsourcing Services
Procurement outsourcing services see organizations outsource one or more of their procurement processes or workflows to an external service provider. This provider acts as an extension of the organization’s procurement team, fulfilling defined responsibilities within their end-to-end procurement process.
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Procurement Managed Services
Procurement managed services are functionally identical to procurement outsourcing services. Both see specific procurement workflows or tasks outsourced to external partners.
What are the key benefits of using procurement services?
Procurement services have grown significantly in popularity in recent years thanks to their ability to help organizations:
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Rapidly scale their procurement operations
With disruptive events continuously threating procurement operations, supply chains, and supplier portfolios, procurement services enable teams to rapidly add procurement resources as and when they’re needed, then scale back when they’re not.
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Instantly bring in valuable new skills and perspectives
Ongoing talent shortages have made it difficult for procurement teams to consistently bring in the skills they need to succeed. Procurement services provide convenient access to those skills and enable teams to pay for exactly what they need, and nothing more.
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Source strong, reliable data
Data is the key to procurement success today, and procurement service providers can supply valuable curated data sets as part of their services, supporting stronger, faster procurement decision-making.
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Increase cost efficiency and productivity
Procurement services enable teams to rapidly adopt modern procurement best practices and technology, supporting digital transformation and providing a clear and simple path toward greater cost efficiency, productivity, and procurement automation.
How do you choose the right procurement service provider?
Every procurement service provider has a different offering and deliver unique benefits. Some provide simple, cost-effective solutions to specific procurement challenges, others offer bespoke consultation services that enable holistic procurement transformation. The right one for your business will ultimately depend on the resources you have available, and what you want to achieve.
However, there is an ongoing trend towards end-to-end procurement. The market is moving away from point solutions, towards holistic service offerings. So, in many cases, it’s worth partnering with a procurement service provider that can offer services and capabilities that span the entire procurement cycle and beyond. The broader and stronger your partner’s capabilities are, the better they’ll be able to support your business as your needs evolve.
How will procurement services evolve in the future?
The growth of Procurement as a Service (PaaS) offerings reflects the market’s shift towards holistic procurement services. The most valuable offerings today tightly integrate every one of their components together to increase end-to-end procurement efficiency and performance. The next evolution of these offerings will be driven by automation and AI.
Highly integrated offerings that incorporate proven AI-based capabilities will create a new era of efficiency and automation for procurement teams. Instead of needing to build their own capabilities in-house, those teams will simply be able to source them from their chosen procurement services provider.
However, technology alone doesn’t guarantee procurement success. Tomorrow’s most valuable procurement service portfolios will apply AI and human intelligence alongside one another, in ways that amplify the value and effectiveness of both.
Conclusion
Procurement services come in many forms. Today they’re a vital part of most organizations’ procurement ecosystems, and provide the simplest way to access the digital and human resources needed to drive cost savings, create business value, and ensure stable supply of essential goods during times of market turbulence.
To learn more about how WNS Procurement supports high P2P process performance, click here.