Is services procurement the next “hidden gem” for cost savings?

Services now represent the largest component of indirect expenditures—as opposed to direct material procurement—according to Tempe, Ariz.-based Center for Advanced Purchasing Studies. Procured services can reduce costs, but realizing cost savings can be challenging given the complexity of managing contracts, not the least of which includes ensuring terms compliance on the part of providers, and that of remote corporate sites working with specified suppliers rather than with their own locally favored vendors—called maverick spends.

“We needed temporary workers to show up in less than 24 hours,” says Betty Stewart, a project manager for a leading global apparel company. There she managed implementation of IQNavigator's procured services management system. “There are a lot of challenges when workers don't show up, or they need to be replaced. To keep track of it all is complex from a data-integrity standpoint.”

IQNavigator manages the full life cycle of services procurement, from processing requests for proposals to negotiation, requisition, approval, monitoring, assessment, and payment—ensuring that proper rates are adhered to.

Mickey North Rizza, a director with Boston-based AMR Research, says the procured services market has many unique requirements for system functionality. “IQNavigator captured market share because no one was really paying attention to services when IQNavigator entered the market. And they've grown the market because they offer a robust product that helps companies effectively control, rationalize, compress, and optimize services spend across the enterprise. They're also very strong with process analytics.”

Says Kieran Brady, senior VP of international markets for IQNavigator, “Many companies negotiate aggressively with service suppliers, but it's hard to push compliance out to the field to ensure that they don't do maverick spend with favored local suppliers. We manage all aspects of procurement management on a single platform—one that lends total visibility both locally and globally.

Where services are rendered in the field but paid centrally from headquarters, “Companies can be confident that the right rate is being applied,” Brady says. “We track this information all along the way so we can measure performance.”

IQNavigator delivers its solution as hosted software-as-a-service, eliminating the need for the customer to manage the code, upgrades, and maintenance. “Users don't get left behind on orphan releases, and can quickly leverage new functionality,” concludes Brady.