IT Professional Services | Market, Trends, Growth | Suppliers Analysis

Strategic Sourcing Guide to IT Professional Services Procurement

Overview

A changing ecosystem within the Technical Services market also affects the procurement process, cost dynamics and supplier attractiveness for the buyers of IT Professional Services. More and more buyers of IT Professional Services are looking to engage suppliers who adhere to lean principles of business operations in a bid to receive services and resources that are highly optimized and insulates in part from cost overruns.

Lack of skilled in-house manpower continues to be the largest factor for hiring of IT Professional Services.

Talent pools available to suppliers of IT Professional Services are gradually getting costlier, impacting their OPEX. Suppliers are compelled to change their pricing structure and pass on some of this cost increase to their customers.

IT Professional Services Procurement Best Practices

It has become imperative for category managers to remain as agile as possible in terms of their procurement practices. However, it is not always easy to quickly spot and implement alternative practices in a category like IT Professional Services. To help quick decision making, this report advises on several procurement best practices that have worked well for category managers.

For example, Cost saving opportunities may reduce exponentially in relation to the time left for current contract to expire or required timeline to start the engagement. Therefore sufficient interval should exist between initation of new procurement and expected start date of the new contract for IT Professional Services.

Adequate RFP response time should be built in for prospective suppliers to enable them understand the scope and performance requirements.

Investing in benchmarking studies help category managers improve their knowledge on market pricing or billing rates of suppliers by job role and function. This also allows them to save costs as well as negotiate better with service providers.

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Risks in IT Professional Services procurement

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

Service providers rely on complex information systems to deliver their services, some of which might be outsourced. These systems are susceptible to virus attacks and security breaches. In the case of a loss of proprietary information or confidential information of the client's firm, service providers can become liable to pay hefty penalties
Service providers are subject to E&O claims, due to the failure to correctly offer professional services as agreed in the contract. If such claims made by the client are found to be true, then they can result in financial penalties
Procurement without consulting the actual users of IT Professional Services may result in a mismatch in expectations of the buyer's internal stakeholders versus the actual contract executed

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Who should read this report

The report is intended to serve as a one-stop reference guide for IT Professional 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 “IT Professional Services: Procurement Report 101” as well as for category experts actively tracking the global IT Professional Services procurement market.

You may have just initiated your research to design a winning IT Professional 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 IT Professional 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 IT Professional 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 IT Professional Services market?
What is the correct price to pay for IT Professional Services? What are the key trends and factors that influence current and future pricing?
Which selection criteria are the most important for IT Professional Services Suppliers Market?
Who are the top IT Professional Services suppliers? What are their cost structures?
Which negotiation levers can reduce IT Professional Services procurement cost ?
What are supplier margins in IT Professional Services market?
What are the best practices for IT Professional 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!

IT Professional Services Category Insights: What is inside

The IT Professional 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 IT Professional 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 IT Professional 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 IT Professional 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 IT Professional 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 IT Professional 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.