PROCUREMENT SERVICES

Procurement services firms come in a variety of shapes and sizes. Most commonly though, providers of end to end procurement services are broadly sorted into two categories; the large generalists or “multi-tower” firms, and the more niche “best-of-breed” providers. Each have their own set of competitive advantages; multi-tower providers, typically larger enterprises, have powerful brands and deliver services across multiple business processes, while the much smaller-sized specialists tend to be nimble domain experts.

When businesses look to outsource procurement, multi-tower firms usually get the nod simply by virtue of being globally recognized corporations. But when it comes to strategic procurement engagements, is bigger always better? Does scale really matter? And can brand equity deliver better performance?

Improve Your Procurement Team’s Reach & Impact

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GEP has consistently been a leading service provider in the move to procurement as-a-service. With a strong vision for the future of procurement, paired with deep procurement knowledge and capabilities, and a comprehensive procurement software platform, GEP delivers transformational procurement value to clients across the world.
– HfS Research

Theoretical vs. Actual Outcomes With Multi-Tower Procurement Services Firms

Perceived Value Proposition

Actual Impact Based on Market Experiences

Business consolidation with a single partner results in a lower rate card

Because procurement services engagements require limited staffing, rate card economies of scale tend to be less than expected — making specialist providers competitive even when compared with large aggregated deals

A single point of contact bearing responsibility for all services leads to more streamlined vendor management and better governance

Different reporting structures for multiple service lines — each with varying goals and few significant incentives to collaborate — leave account reps navigating the politics of numerous chains of command, negatively impacting their responsiveness

Leveraging the large volume of spend under management through the service provider

On most occasions, expertise and client intimacy tend to eclipse any supposed market-mover advantage

Global support owing to the presence of local talent, market knowledge and language capability even in small countries

Ground resources in smaller countries seldom make the team as their cost doesn’t justify the spend at those locations

Process synergies across procurement, finance and IT drive greater efficiency and optimization

Cross-functional process synergies often fail to materialize significantly due to varying reporting structures and disparate objectives

The Best-of-Breed Edge

Smaller procurement services companies may not boast iconic names. But what they lack in terms of branding, they more than make up for in pertinent experience, specialized skillsets, and the very top echelon of available procurement talent.

eProcurement Services — How to Find the Right Software Partner?

Finding the right procurement software for your enterprise is just as important as identifying the right partner. The rise of Procurement-as-a-Service has enhanced the way procurement professionals work by aligning and optimizing all department activities across people, processes and technologies.

Integration with a unified, cloud-native procurement platform (like SMART by GEP) can streamline and automate almost every function of procurement, and is an essential upgrade for enterprises looking to stay competitive in today’s markets. Find out more about SMART by GEP eProcurement software.

Core procurement expertise is better understood and highly valued at a best-of-breed procurement services provider, making it an appealing destination for the industry’s top professionals. In addition, shorter reporting structures — with closer attention and greater involvement of executive management — mean better responsiveness, quicker execution, unmatched client intimacy, and a real likelihood of higher output.

For these reasons, a best-of-breed firm can often achieve a far greater level of strategic alignment with their clientele than a generalist.

Choosing Wisely — What to Really Look For

Plainly put, finding the best fit procurement services partner for your organization should be the primary objective; whether they are modestly staffed specialists or generalists with a global workforce numbering in the thousands is a secondary matter. What’s really critical is understanding the individual capabilities of each vendor, the delivery options they offer, and most importantly, the talent that they will bring to your operation.

 

 

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