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Unpacking the Complexities of Services Procurement

By September 5, 2023No Comments

Art of Procurement recently polled our community to identify the most complex challenge procurement must overcome when managing a services procurement program. The responses weren’t even close… the main pain point by far was “varied stakeholder expectations,” which received over 50 percent of the vote. 

And none of us were surprised.

Kelly Barner and I then had an opportunity to discuss the findings in an AOP Live session with Guidant Global’s Chief Operating Officer Brian Salkowski and Marie France, their SVP of Client Relationships and a Procurement Operations Expert. We all agreed that these survey results affirm that understanding and acting on stakeholder expectations for services can be highly complex.  

Why are services such a source of complexity, and what can procurement do to manage these categories efficiently and in alignment with those varied stakeholder expectations?

Brian and Marie pointed out that services procurement touches every part of the business, so there is always going to be a wide array of stakeholders who need different types of services. As Brian said, “It is wide, it is varied, and – as you would expect – the stakeholder expectations are different (and should be) given the nature of services and external resources that they are engaging.” 

To add to that complexity, every business line or function has a different view of what success looks like for services procurement. Procurement needs a birds-eye-view on all of the applicable success metrics to meet stakeholder expectations while staying aligned with the overall trajectory of the business. This is made even more difficult when stakeholder expectations are different from the documented specifications and requirements for the service itself, which of course happens a lot. 

No wonder this pain point  received 53 percent of the vote…

Maria summed it up nicely: “There is a lot of push and pull that is occurring within the space right now, so it makes sense that it’s very difficult and very complex to pull it all together and get everyone aligned around what [success] looks like.” 

When stakeholders have consideration not just for their function or goals but also for the expectations or requirements of other stakeholders across the business, it can be easier for procurement to align everyone and have a firm grasp of the bigger picture. Maria pointed out that procurement can help facilitate that by asking questions like, 

  • Are we getting the ROI we want out of supplier relationships?
  • Is the supplier infusing innovation into the organization?
  • Do we have to direct them to achieve our goals, or are they proactively creating value for us?

“It’s a journey,” she said, “but I think that more organizations are having those tough conversations around talent and projects, as well as downstream financial benefits.” 

Click here to watch the session on demand.

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