Summary
For companies operating in an Everything-as-a-Service (XaaS) paradigm, leveraging managed services — also known as Procurement-as-a-Service (PaaS) — as a part of their spend management strategy makes sound business sense. Companies are increasingly engaging with PaaS providers to manage strategic spends that enable measurable cost-savings. This partnership allows companies to channelize their efforts toward managing core spends and competencies to maximize their strategic value-add.
Companies looking to employ the PaaS model should be aware of the following nuances:
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PaaS should not be equated with traditional outsourcing characterized by the ‘lift and shift’ approach. PaaS enables achieving nearly instant scale without procurement ceding spend management control to third-party providers
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Judicious selection of the spend that will be managed via PaaS is critical. Determining the target spend for PaaS helps companies to define their own spend management priorities
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It’s best to start small when it comes to PaaS execution. Begin with low-risk projects and choose spend categories that are mature