In light of recent reports indicating that the UK economy experienced zero growth between July and September 2024 (see the BBC UK Economy Zero Growth) , organisations are increasingly seeking strategies to enhance efficiency and maintain competitiveness. One such strategy gaining prominence is Managed Procurement Services (MPS).

Understanding Managed Procurement Services

Managed procurement involves partnering or, in some cases, outsourcing some of an organisation’s procurement functions to specialised third-party providers and use of Procurement Software. This could just be the ‘busy stuff’ that stops you focusing on the critical projects – projects under a spend threshold or large volumes of contract renewals.

“The combination of Procurement Practitioners (experts) and a Sourcing 2 Contract (S2C) software platform to handle tasks ranging from supplier selection and negotiation to contract management and risk assessment, allows your team to focus on their core operations.”

Benefits of Managed Procurement

1. Cost Savings and Efficiency: Specialised providers leverage their expertise and established supplier networks to secure goods and services at optimal prices, leading to significant cost reductions. Streamlined procurement processes also enhance operational efficiency. When the economy growth stagnates, this is a great way to find budget for critical investment.
2. Access to Expertise: Working with an MPS company is a great way to access procurement specialists with deep market knowledge and advanced tools, facilitating informed decision-making and strategic sourcing.
3. Risk Management: Effective MPS includes identifying and mitigating risks associated with supplier relationships, compliance, market volatility and contract management (including those deadly auto-renewals), thereby ensuring supply chain resilience. When you have tens, hundreds or thousands of suppliers and contracts, this is, arguably, the most critical value to your organisation.
4. Scalability: MPS can adapt to a company’s changing needs, providing flexibility to scale operations up or down in response to market conditions.
5. Enhanced Transparency: A well managed and governed procurement process offers improved visibility into spending patterns and supplier performance, promoting accountability and informed strategic planning.
6. Speed of Implementation: There is no faster way to access the savings and expertise than working with an MPS partner. They will, typically, have qualified and experienced experts ready to deploy to start positively impacting your organisation almost immediately. Normally, this means the returns from Procurement are recognised sooner than recruiting, deploying and building a larger internal procurement function.

Implementing Managed Procurement

To fully realise these benefits, businesses should select a Managed Procurement Provider that aligns with their specific needs and objectives. Key considerations include the provider’s industry experience, technological capabilities, and commitment to transparency and ethical practices.

Sourcing 2 Contract (S2C) Software

“You wouldn’t run finance without accounting software; so why would you run supply chain and procurement on a spreadsheet and emails?” – Anonymous CFO

The tricky part about managing supply chain is admitting just how big the task is and realising that managing hundreds or thousands of suppliers and their contracts is daunting and, frankly, impossible. There are some great experts out there doing the research for you, like James Meads with his Mid Market Tech Map.

As the UK economy faces challenges and an uncertain Q1 in 2025, crossing your fingers and hoping for a better economy is not a viable strategy; however, addressing a powerful procurement plan is the right strategy. Using procurement software and MPS offers a viable pathway for organisations to enhance efficiency, reduce costs, and build resilience, positioning them for sustained success in a competitive landscape.

Benefits of the Right S2C Procurement Software

1. Reduced Cost – the right S2C SaaS platform can significantly lower your costs for managing the supply chain from sourcing the right supplier to managing contracts. Do your research and you can find the right software for less than £20 per day.
2. Contract Management – all contracts in one place. Never lose a copy of a contract ever again and, critically, never get hit by an auto-renewal clause that over commits your organisation to unnecessary or exorbitant spend.
3. Contract Management – all contracts in one place. Never lose a copy of a contract ever again and, critically, never get hit by an auto-renewal clause that over commits your organisation to unnecessary or exorbitant spend.
4. Risk Mitigation – ensure compliance with regulation and help achieve ISO, Cyber Essentials and other accreditations by securely managing your suppliers and their contracts in one place.
5. Save Time – Pareto’s law stipulates that 80% of the outcomes come from 20% of the causes, or in this case: you will want to spend 80% of your time focussing on your top 20% of suppliers and other critical direct procurement. Let a software platform take the strain on the rest.
6. Stakeholder Management – from CXOs to budget & operational owners and your end clients, an effective S2C platform demonstrates control and clarity giving confidence that you are working with the right suppliers in the right way.

Action / ‘TO DO’ List:

• Review the ROI for Managed Procurement Services (usually 2 or 3 times greater return versus hiring a for a larger procurement department) + the reduced spend as a result of implementation.
• Review the market for MPS companies – avoid the gainshare providers who take their fee from the savings made on critical projects, it motivates the wrong behaviour and increases risk for your organisation.
• Investigate S2C SaaS Platforms – there is a large number of platforms on the market all covering a range of functions and levels of proactivity. Find one that is easy to implement so that you can deploy and maintain yourself if you don’t want to pay someone to help, has straightforward pricing (many are modular and can quickly add up) and can be used by procurement and non-procurement professionals. ProcurementSoftware.site is a great help.

Novo-K and Buyingstation

Novo-K’s Managed Procurement Services and our BuyingStation platform should be part of your consideration. Our S2C platform is £649 per month for up to 50 users and gives you access to all the modules – no hidden costs. Our team of expert procurement professionals are delivering projects daily for clients measured against the outcomes we deliver. If you would like help with your existing procurement function or have no idea where to begin please get in touch, we can quickly assess and give you options to transform or support your procurement aspiration and initiatives.