Companies Turn to Services Providers to Source Specialized Skills Required to Compete in the Digital Economy, But Few Manage This Growing Workforce Well

Services providers account for nearly half of the world’s workforce
spend, global study reveals

BARCELONA, Spain–(BUSINESS WIRE)–#SAPAribaLiveSAP Ariba Live – The way work gets done is changing. To tap into
specialized talent, organizations increasingly rely on the external
workforce, which includes contingent workers such as freelancers and
independent contractors, and services providers such as IT consultancies
and marketing agencies. In fact, according to new research conducted by SAP
Fieldglass
in collaboration with Oxford Economics, some 42% of
workforce spend is on the external workforce. Yet, the study also found
that many companies are not managing the external workforce effectively.
Management of services providers is particularly weak. Detailed findings
from the global study, Services
Procurement Insights 2019: The Big Reveal
, will be shared
today at SAP
Ariba Live
and the SAP
Fieldglass Summit
, two events taking place in Barcelona, Spain.

According to the study, nearly half (48%) of executives say their
company would be unable to conduct business as usual without an external
workforce, and 59% state that the external workforce helps them compete
in a digital world. Many executives believe the external workforce is
important or extremely important for achieving business goals such as
increasing speed to market (61%) and improving the customer
experience/client satisfaction (67%).

The Invisible Workforce

The research reveals that services providers perform vital work across
the enterprise. In particular, they are a valuable source of the
specialized skills companies need to compete in today’s digital economy,
such as artificial intelligence, machine learning, blockchain, data
science, robotics and the Internet of Things.

And yet, while many organizations excel in managing the financial side
of their contracts with services providers, they fall short when it
comes to managing the “people” aspects of these engagements. These
include who is doing the work, their certifications and training, their
access to systems and facilities, the quality of their work, their
progress against milestones and deliverables, and more.

The core issue is that many organizations do not view services providers
as a workforce. Under-management of this “invisible workforce” can lead
to unsatisfactory project outcomes and creates risk. The study reveals
many staggering statistics, including:

  • One in four projects by services providers is not completed on time or
    on budget.
  • 44% of respondents experience digital security breaches with services
    providers sometimes, frequently or nearly every engagement.
  • Only 27% of executives are highly informed about services providers’
    progress against milestones and/or deliverables, and 25% are highly
    informed about the quality of work at the supplier level. This limited
    visibility makes it difficult to determine return on investment.

“Pacesetters” reveal best practices

Approximately 11% of respondents take much more rigorous approaches to
managing and extracting value from their services providers. These
Pacesetters outshine others in three ways: they have greater visibility
of services providers; they apply more management rigor to these
engagements; and their services providers help them compete in a digital
world. Molly Spatara, Global Vice President of Brand Experience
at SAP Ariba & SAP Fieldglass, explains, “Pacesetters’ qualities help
them thrive in today’s fast-paced economy. Given the high stakes and
potential gains in services procurement, every company should strive to
emulate or surpass the Pacesetters and manage services providers as
effectively as possible.”

Four key actions

The research presents four key actions organizations can take to improve
management of services providers, unlock greater value, boost return on
investment and mitigate risk. These actions empower organizations to
manage services providers with the same rigor used to manage employees,
enabling them to reap far greater rewards from this workforce.

In the study, more than 1,000 senior executives in 24 industries across
21 countries were surveyed to understand the role of services providers
in getting work done, how they are managed and their impact on business
performance. To download a copy of the research and see the four key
actions organizations should take to improve their management of
services providers, please visit: www.fieldglass.com/services-procurement-insights-2019.

About SAP Ariba & SAP Fieldglass

SAP Ariba & SAP Fieldglass is how companies connect to get business done
and spend better. With SAP Ariba & SAP Fieldglass, businesses can manage
the buying process across all categories of spend – from direct and
indirect goods and services to external workforce. On Ariba
Network
, buyers and suppliers from more than 4.1 million companies
and 190 countries discover new opportunities, collaborate on
transactions, grow strong relationships, and build healthy supply
chains. It’s where more than $2.8 trillion in commerce gets done every
year. SAP Fieldglass is used by organizations in more than 180 countries
to find, engage and manage flexible workforces that include non-payroll
workers and service providers. With SAP Ariba & SAP Fieldglass,
companies are transforming how they manage all categories of spend with
improved operational efficiency and compliance, increased agility and
accelerated business outcomes. To learn more visit www.ariba.com
and www.fieldglass.com.

About SAP

As the cloud company powered by SAP HANA®, SAP is the market leader in
enterprise application software, helping companies of all sizes and in
all industries run at their best: 77% of the world’s transaction revenue
touches an SAP® system. Our machine learning, Internet of Things (IoT),
and advanced analytics technologies help turn customers’ businesses into
intelligent enterprises. SAP helps give people and organizations deep
business insight and fosters collaboration that helps them stay ahead of
their competition. We simplify technology for companies so they can
consume our software the way they want – without disruption. Our
end-to-end suite of applications and services enable more than 413,000
business and public customers to operate profitably, adapt continuously,
and make a difference. With a global network of customers, partners,
employees, and thought leaders, SAP helps the world run better and
improve people’s lives. For more information, visit www.sap.com.

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Contacts

Kelly Murray
SAP Ariba
+1 978 708-6821
kelly.murray@sap.com

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