IS Application Services | Market, Trends, Growth | Suppliers Analysis

Strategic Sourcing Guide to IS Application Services Procurement

Overview

Several macro changes in the dynamics of overall Specialist Software and Hardware as well as IS Application Services procurement trends are poised to change the business practices and procurement thumb rules. The cut-throat competition in the category is compelling suppliers to go aggressive on their pricing structure and increase their spend on sales and marketing activities. As a result, most suppliers are feeling a pressure on their margins and trying to offer higher margin value added services to have a better control on their profitability.

Rise in the cost of certain essential assets and supplies required to deliver IS Application Services is making a significant addition to the supplier's overall expenditure. This could have an inflationary impact on buyer's procurement expenditure in the IS Application Services market.

In a bid to differentiate themselves in an overcrowded technology space, suppliers are now focusing on creating industry-specific specialized products. Buyers see this trend as an opportunity to procure more targeted solutions and are developing internal capabilities to identify and leverage innovations in the supplier base.

Category managers need to take note of the potential of these developments and reassess the changes required in their procurement practices.

IS Application Services Procurement Best Practices

As market conditions become more dynamic and procurement practices get more sophisticated, category managers need to be cognizant of the best practices that work for their IS Application Services category procurement. The report offers a succinct analysis of IS Application Services procurement best practices.

For example, Buyers must clearly define clauses pertaining to the ownership of subcontracting services that are not a part of preferred suppliers' portfolios. Subcontractors should be bound by the same terms and conditions as the main contractor to ensure consistency in quality and manage any adverse event such as data breach.

Prior to the commencement of contract-related discussions, buyers must ensure that they have clearly identified and listed down potential levers, such as duration of contract, resources required, space limits if relevant, terms of payment, expected resolution time, delivery point.

Needs of buyers can vary depending on the industry where buyers operate. For instance, buyers from the financial services industry give high importance to regulatory compliance and data security, whereas buyers from the e-commerce industry prioritize high throughput, low response time, and high scalability. Hence, service providers with a strong knowledge of the security, compliance, and governance needs of buyers' industries and a proven track record of performance with respect to these aspects should be prioritized.

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Risks in IS Application Services procurement

IS Application Services procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for IS Application Services procurement. Some examples include:

An increase in the integration of IT systems is amplifying the risk of cyberattacks and theft of sensitive data
Natural disasters can sometimes impact the entire industry to a significant extent and disrupt supply chains. For example, during the floods that ravaged Thailand in 2011, many electronic manufacturing facilities were flooded and the prices of peripherals shot up by more than 100%
Contract-related risks where unfavorable credit terms may severly penalize buyers for delayed payments or entitle the supplier to demand pre-payments or shorten the payment terms are not very common in the category but they do exist in certain situations where buyers' liquidity or financial health is in question

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Who should read this report

The report is intended to serve as a one-stop reference guide for IS Application Services procurement strategy and offers a perfect blend of category basics with deep-dive category data and insights. Therefore, it is ideal for category beginners looking for “IS Application Services: Procurement Report 101” as well as for category experts actively tracking the global IS Application Services procurement market.

You may have just initiated your research to design a winning IS Application Services procurement strategy, or you may be a category expert looking for strategic insights and updated data.Either ways, the report has your requirements covered.

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Key questions on IS Application Services procurement answered by this report

Procurement decisions can prove to be costly in the absence of careful deliberation and evaluation of every available option. In fact, more than 90% of the decision makers we work with acknowledge that timely availability of up-to-date category intelligence can help them make better purchasing decisions. More than 80% of them believe that in-house category intelligence needs to be updated periodically to achieve full benefits. If you have read so far, we are quite sure you agree!!

The IS Application Services procurement report helps take more informed decisions by placing all the critical information and advice at the fingertips of a decision maker. It also specifically answers some of the key questions that we have been routinely asked during our industry outreach initiatives:

What is the spend potential in the IS Application Services market?
What is the correct price to pay for IS Application Services? What are the key trends and factors that influence current and future pricing?
Which selection criteria are the most important for IS Application Services Suppliers Market?
Who are the top IS Application Services suppliers? What are their cost structures?
Which negotiation levers can reduce IS Application Services procurement cost ?
What are supplier margins in IS Application Services market?
What are the best practices for IS Application Services procurement and what are the potential risks?

SpendEdge Insights has helped procurement professionals and sourcing teams manage multiple spend areas and achieve more than $2 billion in savings. Activate your free account today!

IS Application Services Category Insights: What is inside

The IS Application Services market report offers a complete picture of the supply market and analyzes the category from the perspective of both buyers and suppliers. Analysis of the category trends, procurement best practices, negotiation levers and overall category management strategy advisory are interspersed with in-depth data and commentary on spend outlook, pricing ecosystem and supplier landscape drilled down to a region-level coverage.

Data

A key highlight of this report is the in-depth outlook created on IS Application Services procurement spend and pricing trends. The report further delves deep into the aspects of cost structure, total cost of ownership and supplier margins for IS Application Services. A dedicated section to supplier profiles and evaluation helps decision makers cast a wider procurement net and identify gaps in existing relationships.

Insights

Along with specific category and supplier intelligence, the publication also includes curated insights on IS Application Services market trends, price influencers and inherent risks. These insights help the decision makers prepare for market shaping trends in advance and create alternative strategies for changes in the market conditions.

Advisory

Additionally, the report also advises on the best practices and strategies to manage the IS Application Services category efficiently. Negotiation levers and opportunities are explained in detail along with quantification of their potential. Benchmark KPIs for supplier and buyer performance management are also aggregated to better organize the category objectives. Other themes of advisory include ideal procurement organization structure, enablers to achieve KPIs or category objectives and ideal SLAs to have with suppliers.

Category Ecosystem

Buyer and supplier ecosystem
Competitiveness index
Buyer and supplier power
Threat of new entrants and substitutes

Global and Regional Sourcing Insights

Category spend
Spend growth
Dynamics
Opportunities

Pricing and Cost Analysis

Pricing outlook and data
Drivers of pricing
Cost structure and inputs cost
Total cost of ownership
Pricing models and margins

Cost Saving Opportunities & Negotiation Strategies

Buyer and supplier side levers
Quantified cost saving opportunities
Negotiation strategies and quantified outcome

Procurement Best Practices, Strategy and Enablers

Procurement excellence
Sustainability and innovation
KPIs and category enablers
Risk management and outsourcing

Vendor Analysis

RFx essentials and selection criteria
SLAs
Supplier evaluation metrics
Detailed supplier profiles

Our research is complex, but our reports are easy to digest. Quantitative analysis and exhaustive commentary is placed in an easy to read format that gives you an in-depth knowledge on the category without spending hours to figure out “what does it mean for my company?”

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Category Research Framework

SpendEdge presents a detailed picture of IS Application Services procurement solutions by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key category influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.