For many organizations, statement-of-work (SOW)-based spend is an area lacking true clarity and process consistency across the enterprise. Formal structure and centralized control increase operational efficiencies, lower compliance risk, and most notably, drive significant cost savings; however, the idea of bringing this area of spend under strategic management can seem daunting. Through Corporate United’s partnership with TAPFIN Process Solutions, member companies now have access to an industry-leading Services Procurement Management (SPM) solution to meet these specific needs related to SOW-based spend.

TAPFIN’s SPM solution implements best practices and smart business rules derived from client experience and industry thought leadership to deliver automation and improved processes for how a company procures and manages outsourced services. This approach results almost immediately in increased visibility that enables spend optimization and tighter controls. In turn, this visibility leads to valuable hard- and soft-dollar savings, largely through cost avoidance and demand management. The more specific benefits will vary based on an organization’s current procurement processes and capabilities.

Less mature organizations will find significant opportunities in bringing simple structure to what is often an unruly process. More mature organizations will find significant improvement and savings opportunities by optimizing their process and taking full advantage of technology and business intelligence as key components of their project procurement process. Inefficient processes can drastically slow down productivity, place an inordinate burden on company employees and vendors and can even result in selecting the "wrong" vendor – all of which create unnecessary costs and cause missed business objectives and timelines. Improving these processes and automating the workflow can dramatically enhance the entire procedure. In addition, SPM provides a vehicle for ensuring compliance with company and regulatory policies and best practices.

• RFx Process: The MSP provides subject matter expertise in the creation and evaluation portions of the RFx process. The MSP also provides the vendor profiles and performance data needed to make informed decisions for vendor selection, understanding that companies know their vendors best and can do the best job of selecting who should receive an RFx and be awarded the business.

• Vendor Relationship: The MSP assists in vendor interactions and acts as the client’s agent in discussions and negotiations. This allows the client to focus on growing and maintaining a productive relationship with the vendors that are critical to the organization.

• Invoicing and Payment: The MSP takes on the administrative burden of the process so client resources can focus on ensuring the work quality and appropriateness. The client approves all invoices once work is satisfactorily completed, while the MSP takes care of payment. This is the least risky approach and ensures the highest quality of vendor deliverables.

• Vendor Performance Management: The MSP collects and provides the information and reporting needed to make an informed vendor decision, including key data around delivery, performance and market trends. The MSP also analyzes vendor performance and makes recommendations to ensure continuous process improvements in subsequent vendor selection efforts.

Organizations Best Suited for SPM
The best candidates for SPM are those companies with a significant amount of SOW-based activity and little or no visibility into their procurement lifecycle. Organizations that have deployed vendor management services have already benefited from the value provided by this sort of program and are likely to recognize the benefits that SPM can provide. Organizations with a centralized procurement function will have an easier time implementing SPM than those organizations that have scattered procurement processes. Either type of organization can succeed, but there is significantly more work in store for one that has not yet centralized procurement.

Next Steps
Once the decision has been made to proceed with an SPM program, the next step for any company is to develop an appropriate implementation plan. This plan should identify the process improvements to be made, roll-out activities (communication, training, support, tool launch) and support to be provided (help desk, job aids, training materials). While some organizations elect to roll out an entirely new process in a "big bang" mode, many organizations choose a phased-in approach, initially identifying areas that deliver the greatest impact to the existing process.

SPM Readiness Assessment
To learn more about potential benefits and savings based on specific company needs, TAPFIN invites Corporate United member companies to receive its SPM Readiness Assessment (www.tapfin.com/invitations/spm/index.html). By taking 15 minutes to answer some basic questions about SOW-based spending, companies are equipped with a clear picture of how the solution can work for them and what level of ROI they could expect for implementing an SPM program. In particular, the Readiness Assessment focuses on the impact of the program on the key areas of compliance, risk management, process efficiency and, of course, cost savings.

For more information on TAPFIN and SPM, please contact your member development representative at 440.895.0938.