Capturing Services Spend to Maximize ROI

When discussing spend and ROI, it’s all too easy to get caught up in the outgoings which result directly from the products or services an organization provides to its customers.

However, it’s just as important – if not more so – to devote attention to all the indirect spending which is done to keep the wheels of your particular corner of industry turning. The cost of ancillary services and products can add up to significant amounts and keeping a handle on these outgoings can mean the difference between soaring profits and crippling losses.

These periphery expenditures include field service, stationary, software subscriptions, insurance, rent, energy bills, business rates, and, relevant to our area of interest here, contingent staffing costs – and capturing spend on these services will be the focus of this article.

Capturing Service Spend

In order to get an idea of the scale of service spend, our first port of call must be the source of it – the supplier.

In the case of contingent staff procurement, the supplier will likely be a temporary staffing agency or a similar company. While these agencies can be excellent for acquiring contingent staff at short notice and provide a large pool of varied talent to choose from, they also require you to put a lot of faith in an outside organization which, at the end of the day, will have its own profits in mind – not yours.

This can often mean outside suppliers will push products or services – or even just apply them as part of a standard package without your expressed consent – which you don’t really need – and will almost certainly charge a premium for them. These additional charges can really start to add up – especially when spread across multiple services – and can have a significant impact on your organization’s ability to turn a profit.

Whereas suppliers should tailor packages to meet the individual needs of their customers, it is often the case that unnecessary and expensive products are slipped in under the radar.

For a famous example unrelated to contingent staffing, cast your mind back to the payment protection insurance scandal which saw many financial customers spending years paying for a product they neither asked for or consented to. Like the PPI scandal, these services are often provided with nary a concern to the customer’s wants or needs and at a price which in no way reflects their value.

Therefore, when trying to capture service spend, organizations need to go back through their service contracts and see exactly what they are paying for and what they are getting in return for their investment. Transparency is the key to capturing service spend and that means shining the harsh light of day on every corner of it.

It can also often be more beneficial to source contingent staff from individual freelancers. It may take a bit more effort to track them down, but the lack of a mediator between your organization and its contingent staff can mean substantial savings further down the line – especially if the work the freelancer is required for can be carried out remotely.

Technology

Before we wrap up this article, we would be remiss if we didn’t touch on some of the digital technology out there which can help organizations better capture their service spend.

Naturally, big data and artificial business intelligence has a significant role to play in this. With AI platforms harvesting data from throughout an organization it can alert procurement officers to areas where spend is rising above pre-set budgetary restrictions.

These platforms can also help discover how much contingent staffing is required to fill vacancies, and when annual leave or maternity leave is coming up for full time staff, so temporary employees can be arranged in suitable time – and therefore reduce the additional costs which often accompany last minute procurement.

We already know the many ways powerful AI automation and data collection can help the front end of a business better meet the needs of customers, but there are also plenty of applications for the technology which can help behind the scenes as well – such as assisting in capturing the spend associated with ancillary services such as contingent staffing.

Final Thoughts

Contingent staffing costs can start to rapidly mount up and businesses need to make sure they are focusing on every detail to make sure they don’t spiral out of control. Insist on transparency from suppliers and considering the benefits of freelancers are just a couple of ways to achieve this, while advanced business intelligence technology can make sure you are kept informed every step of the way.

Capturing services spend is set to be part of the conversation at ProcureCon Contingent Staffing 2022, taking place in March at the Renaissance Phoenix Downtown, AZ.

Download the agenda today for more information and insights.