Spend Matters today begins a PRO series meant to shed light on an often-overlooked part of digital procurement transformations — namely the services needed to formulate and execute the actual transformation strategy itself! Our series — “Procurement Services Market Landscape Report and Directory” — will profile 34 vendors in six industry categories. Spend Matters analysts gave the rationale for this research as helping “the Global 2000 make more holistic solution decisions that are increasingly incorporating a diverse set of strategy, operations, technology and BPO partners.”

But first let’s consider the current state of procurement. Most procurement organizations are pushing hard to improve their stakeholder alignment and business impact. They are trying to extricate themselves from low-value activities in order to expand their portfolio of spend/supply services and capture more value from the supply ecosystem, where nearly everything is now available as a service (i.e., “XaaS”).That’s good news because procurement needs help transforming its diverse “service portfolio,” which is simply all the things that it does to reduce spend, improve supplier value, impact innovation and top-line growth, improve supply chain resiliency, demonstrate environmental/social leadership, and other objectives. However, buyers must approach the procurement services market with a holistic mindset, a disciplined approach and an understanding of the trade-offs involved with different service strategies as well as service provider types.

In this initial report that focuses on the end-to-end procurement services market rather than just the business process outsourcing (BPO) market or the procurement consulting market, we will focus on procurement itself as a service provider to the business before turning the lens to the vendors in the supply market. The supply market dynamics are not just driven by legacy service provider segments, but also the disruptive effect of digital on these segments and service providers such that they can cross over more easily into other segments directly or via partnerships. The procurement services market is evolving into an ecosystem that can be harvested for value if buyers know what to look for.

As such, in this series, we analyzed nearly three dozen representative procurement service providers in the market to learn from them who they are, the value they deliver and their capabilities across more than two dozen individual competencies. We also investigate how they go to market in these evolving service segments and how evolving digital capabilities are helping them add new value streams beyond traditional ones. See some background on the initial 34 providers here in the provider directory that we’ve created just for this research. We’ll add detailed provider profiles to the directory when we discuss the respective market segment that the providers serve. These are the six provider categories, shown with an explanation of the group’s value propositions:

• Source-to-pay technology specialists — These purpose-built consultancies will help rapidly and effectively implement and optimize the leading S2P applications and suites — and some other tools as well.
• Global consultancies — These firms, including the Big 5 firms, have worldwide reach and support across a spectrum of services, even beyond S2P.
• Strategy consultancies — The C-suite at buyer organizations are undoubtedly using one of these firms, and most of these consultancies are developing formidable capabilities.
• Regional firms — Use these consultants for local presence, cultural fit and specialization (and maybe even lower rates).Global BPOs — Clients of these firms get one-stop shopping for large-scale digital transformation and global operations.
• MSPs — These firms occupy the “long tail” of the market and offer niche enablement by category, process, resource, benefit, commercial model, etc.

Now, let’s get into the deeper details about the services that procurement delivers to its stakeholders across a business, challenges that procurement faces and how to engage with the types of service providers that we’re profiling in the directory.