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:

• 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

• 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

• It’s best to start small when it comes to PaaS execution. Begin with low-risk projects and choose spend categories that are mature