Smart PSPs monitor and refine processes and supplier performance, streamlining and automating and freeing up expensive resources to spend more time adding value to their client’s business and growing their own revenues.
It’s this desire to grow revenues that sets fast growing PSPs apart from their competitors, that’s according to cloud based spend management providers, Claritum.
Growth creates a positive momentum as scale helps companies to negotiate advantageous volume deals. More than this, though, is the focus on achieving efficiencies through automation.
“Manual processes kill growth. Having to shuffle paper based or email requests and manually communicate with multiple suppliers in order to fulfill a procurement requisition results in errors and inefficiencies and creates an ‘atmosphere of admin’, where expertise is wasted on chasing paper and completing spreadsheets,” according to Chris Haddock, Marketing at Claritum.
Success breeds success
Automation frees up management to focus on growing – something that clients like to see as it validates their choice and de-risks their decision.
Successful Procurement Service Providers focus on winning new clients on an ongoing, repeatable basis as opposed to slower growing PSPs
Among the key benefits of automaton for PSPs are:
- Enabling PSPs to make more informed decision making
- Allowing the PSP to broaden their offering quickly allowing them to provide broad category expertise and access to a wide range of qualified suppliers aligned to their clients’ markets
A reduction in maverick spend, improved spend compliance, reduced supplier risk, lower costs and a host of other demonstrable benefits can be achieved will assist in building positive momentum within the client organization.
This is in contrast to slow growth PSPs that throw people at problems
They employ people to do repetitive sourcing exercises or manual processing of orders.
Smart PSPs, are more strategic. They identify frequently ordered products and services, pre-negotiate deals with pre-approved vendors and provide tools to client’s to self-service. They monitor and refine processes and supplier performance.
“Having a spend management platform that automates the source-to-settle process for the entire supply chain demonstrates that you’re a serious player. Being able to show streamlined sourcing and procurement processes that adhere to best practice will set you apart from your competitors. Being a more efficient operator than your client will help justify your costs and give the client the confidence to place their business with you,” adds Haddock.
High performing PSPs build on the success of the initial engagement and broaden their offering quickly. They can not only provide broad category expertise, access to a wide range of qualified suppliers and can align to their clients’ markets, they think more strategically than their slow lane competitors.
Critical to growing spend under management is the ability to rapidly demonstrate success in the initial categories of expenditure before seeking to expand into other geographies or types of spend.
Again, the rapid deployment of a best in class spend management platform can quickly deliver results. Showing a reduction in maverick spend, improved spend compliance, reduced supplier risk, lower costs and a host of other demonstrable benefits can be achieved will assist in building positive momentum within the client organisation.
Slow growth PSPs throw people at problems. They employ people to do repetitive sourcing exercises or manual processing of orders.
Smart PSPs are more strategic. They identify frequently ordered products and services, pre-negotiate deals with pre-approved vendors and provide tools to client’s to self-service. They monitor and refine processes and supplier performance. They streamline. They automate. They free up their expensive resources to spend more time adding value to their client’s business and growing their own revenues.
Deliver More Value
Being able to prove savings and efficiencies based on real time transaction based data provides the visibility needed to make more informed business decisions.
Fast growth PSPs use ‘live’ transaction based data to drive better business decisions. The era of basing business decisions based on out-of-date, incomplete, inaccurate data or general benchmarks is gone.
Best of Breed PSPs analyze data, they spot trends, see opportunities and predict and model the future. They stay ahead of their clients and their competitors.
By automating sourcing and procurement processes, successful PSPs have also identified another secret to their success: supply chain integration. By spreading the reach of their spend management platform into client side ERP (enterprise resource planning), procurement or financials, PSPs can not only bring more efficiencies to their clients, they increase the cost of switching to another provider. Likewise, integrating systems into multiple strategic suppliers reduces processing costs, brings down errors and improves supply chain efficiencies. A fully automated end-to-end process maximises PSPs’ chance of retaining client’s over a longer period of time.
The common theme displayed by successful Procurement Service Providers is that they successfully separate the value and expertise of their people from the efficiencies and data provided by spend management platform of choice. Sure, some consulting firms will add value to their clients but don’t deliver the ongoing service. There are also pure play sourcing and procurement technologies available that enable clients to self-serve but, without the expertise to constantly improve, they struggle to maximise the potential.
Successful PSPs use spend management platforms to streamline their operations and release their team to focus on adding value to clients and their own business growth.
For further information contact Claritum for a discussion on how you can accelerate your growth as a PSP.