1.
INTERNAL
Services Procurement
Insights 2019: The Big Reveal
Unlock more value from your invisible workforce
Research in
collaboration with

2.
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The drive to retain
market share and
break new ground in
the digital economy
has stoked companies’
appetite for talent and
new capabilities.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.

3.
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Organizations are increasingly turning to
the external workforce to get work done.
Meet the
modern
workforce
Internal workforce External workforce
Employees
Workers who are on the
company’s payroll, typically
receiving traditional
employment benefits.
Non-payroll workers
Also referred to as contingent
labor, these individuals are
engaged by an organization to do
work on its behalf, but not as
employees. They can be
contracted via staffing agencies,
through freelancer marketplaces,
or directly by the company.
Examples: Independent
contractors, freelancers and
temporary labor.
Services providers –
the invisible workforce
Companies contracted to get
work done, typically on a project
basis, via a Statement of Work
(SOW). They provide services
delivered by people.
Examples: Consultancies, IT
outsourcers, marketing agencies,
law firms, facilities management
companies, call-center operators
and accounting firms.
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

4.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
How important is the external
workforce in meeting the following
business goals?
“Important” and “Extremely important” responses
The external workforce is critical to
organization’s success.
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

5.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
The external workforce is essential for
organizations to thrive in the digital age.
of executives say the
external workforce
helps them compete
in a digital world
say it is important or
extremely important in
meeting business needs
for specialized new IT
and digital skills
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce
What’s more, the external workforce accounts for
42% of total workforce spend. Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

6.
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For us, the value of the external
workforce has never been cost. It’s
flexibility. It’s strategic.
JP Stadelmann
Head of Purchasing for the External Workforce, Swisscom
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

7.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Services providers such as strategy firms,
IT outsourcers and marketing agencies are a
significant portion of external workforce spend.
They play pivotal roles in getting work done
and operate at the heart of the enterprise.
The stakes are high as companies spend
billions on these services.
Narrowing the lens to focus on
services providers…
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8.
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Services providers are frequently under-managed.
They often operate as an invisible workforce.
Under-management prevents organizations from
reaping the full value of their services providers
and creates risk.
…but opportunities are being missed
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9.
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Illuminate your
invisible workforce
See your contribution
in a new light
Rise above
the silos
Manage
with rigor
We identified four key actions
to help organizations unlock more value
from their services providers.

10.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Illuminate your
invisible workforce

11.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
36%
39%
41%
44%
44%
48%
Who is doing the work
Where they are located
Contract terms
Responsibilities
(what they are doing)
Compliance with required
licenses and certifications
Access to systems and
confidential company information
Lack of visibility into services providers is a
serious problem for most companies.
How informed are you
personally about services
providers doing work for
your organization?
"Highly informed" responses
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

12.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Quality of work and progress against
milestones and/or deliverables are surprising
blind spots.
of executives are
highly informed
about the quality of
work at the supplier
level
are highly informed
about progress against
milestones and/or
deliverables
25%
27%
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

13.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
With such limited insight
into quality and progress,
it’s difficult for executives
to have confidence in
value delivered or know
whether they are
achieving a good return
on their investment.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.

14.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Manage with rigor

15.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Most companies do not apply sufficient rigor in managing
services providers. Security breaches, compliance issues
and maverick spend are worryingly widespread.
How often does your
organization experience
the following with regard
to its services providers?
“Sometimes,” “Frequently” and “Nearly
every engagement” responses
37%
39%
41%
43%
44%
Overcharges and
duplicate payments
Compliance issues
(e.g., certifications, workers
exceeding tenure, etc.)
Digital security breaches
(e.g., confidential data or information)
Unauthorized spend without
approval of Procurement
Rates that deviate from an agreed-to
rate card or master services agreement
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

16.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Management rigor drops off through the life of the
engagement.
How well does your
organization manage
services providers in
the following areas?
“Well” and “Very well” responses
64%
55% 54%
47%
30%
25%
Workforce
planning
Measuring
performance
against stated
goals
Sourcing Onboarding Offboarding
(cutting off
system and
facility access)
Re-engagement
given positive
experience
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

17.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Services providers play
pivotal roles in organizations’
strategy, digital and
technology initiatives,
customer experience,
branding and more. Lack of
effective management may
result in unsatisfactory
project outcomes and
missed opportunities.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.

18.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Rise above
the silos

19.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Collaboration is beneficial to achieving optimal
business outcomes.
How effective is cross-functional
collaboration (between
Procurement, HR, IT and lines of
business) with regard to your
services providers?
“Effective” and “Highly effective” responses
72% 69% 66% 65%
59%
Workforce
planning
Spend
management
Performance
management
Governance Sourcing
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

20.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Companies that manage
services providers holistically
will have a competitive
advantage over those who
are working in silos.
David Swift
Head of Global Corporate Procurement, Novartis
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

21.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
See your contribution
in a new light

22.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
There is room for improvement in terms of
services providers meeting goals and objectives.
Approximately what
percentage of services
providers at your
organization meet their
stated goals and
objectives?
12% 12%
16%
19%
41%
Less than 60% 61-70% 71-80% 81-90% 91-100%
% of services providers
%ofrespondents
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

23.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
There is ample opportunity to
increase return on investments in
projects involving services providers.
Organizations spend billions on
consultancies, law firms, marketing
agencies and other services
categories every year.
Wouldn’t you like to
spend better?
© 2019 SAP SE or an SAP affiliate company. All rights reserved.

24.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Services providers are vitally
important to an organization’s
future success.
Yet, in most organizations,
management is confined to
Procurement, and the focus
is on the financial aspects
of the work.
Not just “a Procurement thing”
© 2019 SAP SE or an SAP affiliate company. All rights reserved.

25.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
However, Procurement doesn’t have
visibility into operational aspects
such as who is doing the work,
quality and milestones. Seldom is
there a closed loop to feed this
performance back to inform the
master contract.
This is an opportunity for the
business to contribute and
add more strategic value.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.

26.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Learn from the Pacesetters
who are leading the pack.
Around 11% of companies in our
research outshine the rest. These
“Pacesetters” have much more rigorous
approaches to managing and extracting
value from their services providers.
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

27.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Pacesetters are charting the way
forward in this still-evolving field.
They stand out in three important ways:
Visibility
of services providers
Effective management
of services providers
Competitiveness
in a digital world
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

28.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Pacesetters have superior visibility.
How informed are you
personally about the following
details of services providers
doing work for your
organization?
"Highly informed" responses
Pacesetters Others
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

29.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Pacesetters manage services providers with more rigor
and realize dramatically different results, except in the
case of digital security breaches.
How often does your
organization experience the
following with regard to its
services providers?
“Sometimes,” “Frequently,” and “Nearly every
engagement” responses
Pacesetters Others
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

30.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Pacesetters collaborate better across functions on
various aspects of managing services providers.
How effective is cross-functional
collaboration (between
Procurement, HR, IT and lines of
business) with regard to your
services providers?
“Effective” and “Highly effective” responses
Pacesetters Others
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

31.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Pacesetters report substantially better performance
regarding their services providers.
Pacesetters Others 2% 1%
15%
82%
26%
18% 20%
36%
70% or less 71-80% 81-90% 90-100%
Approximately what
percentage of services
providers at your
organization meet their
stated goals and
objectives?
% of services providers
%ofrespondents
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

32.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Management rigor pays off.
Pacesetters’ services
providers are more likely to
meet goals and objectives
and complete projects on
time and on budget.
Greater visibility,
particularly into quality of
work and progress
against milestones, will
help executives ensure
they obtain good ROI.
Companies must view
and manage services
providers as an extension
of their workforce.
What can we learn from the Pacesetters?
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

33.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.© 2019 SAP SE or an SAP affiliate company. All rights reserved.
Here’s how to capture more value from your
services providers:
Reframe how you view services providers. Recognize they help
you get work done, so treat them like a workforce.
Identify the skills you will need to succeed in the digital era, and
build a strategy to ensure you can access them.
Gain visibility into quality of work and progress against milestones
to gain confidence in assessing ROI.
Improve cross-function collaboration between Procurement, HR, IT
and the lines of business.
Ensure your leadership – including the C-suite – has visibility into
the scope, impact and spend on services providers.
To manage services providers at an operational level, you will need
a program with effective management, strong governance and
executive sponsorship.
Services Procurement Insights 2019: The Big Reveal
Unlock more value from your invisible workforce

34.
© 2019 SAP SE or an SAP affiliate company. All rights reserved.
SAP Fieldglass collaborated with Oxford Economics to conduct an in-depth telephone
survey with 1,050 senior executives about their use and management of the external
workforce, with a focus on services providers. Respondents were from mid-sized to
large companies in 24 industries across 21 countries in five regions. Oxford Economics
also conducted qualitative interviews with multiple executives in the field, to take a
deep dive into services procurement and to hear reactions to the survey findings.
Get our full report at:
https://www.fieldglass.com/services-procurement-insights-2019
Find out if you are a Pacesetter.
About our research