Optimizing Spend: How Sourcing Professionals Can Leverage Performance Data for Year-Over-Year Savings
When you need to hire a service provider at one of your locations, it’s natural to focus on your contractors’ hourly rates and trip charges. But this pure cost-based evaluation can have unintended consequences. A low hourly rate might translate into low-skilled providers who take twice as long or deliver sub-par work. You may wind up paying more in total repair cost than if you had chosen a higher-priced, more experienced provider.
While a crystal ball would be helpful, ServiceChannel Analytics is an even better solution. It converts your data into dynamic insights that you can use to make smarter, more strategic sourcing decisions.
“Sourcing professionals are taking a more holistic approach, considering not just the labor rate but the opportunity cost of not having things fixed properly,” says Michael Sutherland, vice president of product management for ServiceChannel. “Property owners can lose revenue and their customers may become dissatisfied and defect to a competitor when equipment is not in service and they’re not able to purchase the product they wanted.”
Maximize Your Facilities Performance
ServiceChannel Analytics includes financial, operational, and strategic dashboards that flag key trends, hotspots, and outliers. For example, you can track work order history by spend or volume, work order aging, and invoice averages by trade or category. You can analyze store manager feedback, invoice spend by region and location, and repair versus replace conditions.
“Sourcing with provider performance data allows you to not only look at the cost of services, but the total cost of ownership,” says Sutherland. “Manually compiling performance history could be a big investment, especially with many providers, trades, and locations. But you can grow a portfolio without adding additional people to manage by using a technology partner like ServiceChannel.”
Performance data aggregates details on every asset, work order, location, and provider. Sourcing professionals can spot trends to make strategic improvements to support capital asset planning and annual budget development. And they can get help selecting the best providers by using objective performance data to measure price, engagement, quality, and speed.
Reduce Year-Over-Year Spending
All companies want to boost the bottom line, and one way to do that is to minimize expenses. “Procurement professionals are incentivized to reduce year-over-year cost. They typically don’t look at nonfinancial metrics like the recall rate or multiple visits from providers who didn’t resolve problems on the first visit,” says Sutherland. “Having 20% of work requiring a second visit will significantly increase a portfolio’s facilities spend.”
One of the challenges facilities professionals face is a lack of equivalent benchmarks. Companies are limited to their own expenditure data and cannot access information about what other organizations are spending on similar services. This lack of comparative insight can hinder companies from optimizing their spend and achieving greater cost efficiency. ServiceChannel can provide that visibility because it creates cost and performance benchmarks from millions of transactions performed by more than 70,000 providers ranked by results.
“Provider performance data can inform and support your negotiations,” says Sutherland. “Our benchmarks can set standards for an RFP and offer independent measures of evaluation. Also, ServiceChannel’s Search tool can identify high performing providers benchmarked against their peers on an as needed basis. Companies can deliver bottom line results via consistent marginal improvements to cost and performance. By using performance data in a buying decision, they can deliver favorable operational revenue results by simply ensuring their facilities are clean, and their revenue-generating equipment is up and running.”
The benefits are clear. By tapping into data, procurement leaders can deliver measurable results and a better customer experience that allow them to achieve a greater return on their investments.
How ServiceChannel Can Help
Performance data is a powerful tool to understand and track how different components of your business are doing so you can make informed decisions to reduce spend and inefficiency. Leaders can minimize liability, reduce risk, and indirectly contribute to revenue growth. Visit our Marketplace page to learn how ServiceChannel can help you make smarter, more strategic sourcing decisions and reduce your YOY spend.