Procurement-as-a-Service

Trend Definition 

What is the essence of this trend? What is its impact? 

• Essence: Procurement-as-a-Service (PaaS) describes a shift in procurement management, where businesses outsource parts of or the entire procurement to specialised service providers, for instance, supplier sourcing and contract management
• Impact: PaaS helps companies to overcome knowledge gaps or to focus their capacity on procuring specialised goods while more general sourcing activities are outsourced to the PaaS provider

Trend Drivers 

Why is this trend emerging now? What’s changing? 

• As-a-Service Trend: As-a-Service solutions become more popular across multiple industries and functions due to increased levels of complexity and uncertainty
• Focus on Core Competencies: Businesses are increasingly focusing on their core competencies, choosing to outsource non-core functions, which is in line with a global trend of specialisation
• Increased Need for Agility: The dynamic nature of modern markets requires businesses to be agile and to respond to changing environments quickly

Use Cases 

How to apply this trend? 

• Transferring the entire Procurement Process: Outsourcing direct and indirect procurement
  Example: In order to save costs, Unilever partnered with Accenture and outsourced its direct and indirect procurement, the service firm also implemented changes to streamline procurement activities 

Procurement Relevance & Response Strategies 

How should Procurement adapt its Processes, Organisation, and Strategy?

• Feasibility Assessment: Assess which parts of the procurement can be cost-efficiently done by a service provider and which ones need to stay in-house. Moreover, identify categories that are especially exposed to supply shortages to set up measures
• Service Provider Selection: Following the needs assessment, procurement departments should get into contact with PaaS providers to find scalable and reliable solutions