“Companies are still overlooking their main opportunity to streamline further without impacting headcount”, says Guy Stafford, client director at procurement specialists BuyingTeam. If that hasn’t got your attention, then you’re probably in the minority that are comfortable with their services procurement spend.

In a recent analysis piece on services spend, which you can find here, Procurement Leaders looks at how poorly-managed budget heading employee labour costs can become a sink-hole of services spend. Recovery or not, those selection of words can’t bode well for spend management.  

On the flip-side, the potential for savings are impressive.

A recent conversation with Seth Wolins, General Manager of Emptoris’ Services Procurement yielded similar claims. “70% - 75% of companies in North America,” he claimed, “don’t have services procurement solutions or strategies in place and are missing out on potentially huge savings.”  

So, why hasn’t more notice been taken?

“Education is a real barrier. Because it is hard to track, there’s a huge disconnect between how effective procurement outsourcing can be and companies’ response to it,” says Wolins.

Frank Thewihsen, vice president at A.T. Kearney, takes the view that part of the problem lies in not having a well-specified product. “Instead you have lots of different stakeholders and it can be too much complexity for procurement to deal with”, he says.

Of course, some will say, they would say that. But something is stopping firms having the right processes in place to manage services spend.

BuyingTeam reckons it can save 8-12% on service costs - similarly Emptoris and A.T. Kearney make bold claims. What is clear from this analysis is that it merits some consideration to see if the claims are true.

If business isn't prepared to consider that there are ways of managing its services spend and continues to hide behind the resistance to spend in order to save, it seems it has plenty to lose.

As with many things, part of the solution is in recognising the problem in the first place.