Procurement as a Service: A Smarter Way to Handle Your Indirect Spend??

Procurement—it’s the beating heart of any business, ensuring you have the right stuff, at the right time, for the right price. But let’s be honest, not all procurement is created equal.

Buying raw materials for your core product? Critical. Negotiating your office stationery contract? Less so.

That’s where Procurement as a Service (PaaS) comes in. Specifically for indirect, non-core spending—the stuff that keeps the lights on but doesn’t necessarily excite your leadership team.

Direct vs Indirect Procurement: What’s the Difference?

Think of direct procurement as the main event—the strategic buying of goods and services that directly contribute to what you sell. If you’re a drinks manufacturer, your direct spend is your ingredients, packaging, and production machinery.

Indirect procurement, on the other hand, is everything else—IT services, office supplies, utilities, cleaning contracts, travel expenses. Necessary? Absolutely. Business-critical? Not exactly.

Yet, despite its supporting role, indirect procurement is often a cash-guzzling, efficiency-draining black hole that businesses fail to get a grip on.

The Problem with Indirect Procurement

Here’s the reality: most companies don’t manage indirect spend well. It’s fragmented, decentralised, and full of inefficiencies. Procurement teams focus on the big-ticket items, while indirect spending is left to individual departments, leading to:

• Multiple suppliers for the same service (each negotiated by someone who’s “pretty sure” they got a good deal).
• Bloated costs because small-scale purchases lack bulk-buying power.
• No visibility into where the money’s actually going.

It’s like letting everyone in your office expense their own coffee machine—before you know it, you’ve got a warehouse full of Nespresso pods, and no one’s sure who’s paying for what.

Enter: Procurement as a Service (PaaS)

This is where PaaS for indirect procurement makes all the difference. Rather than trying (and failing) to manage everything in-house, you outsource the complexity to experts who specialise in optimising non-core spend.

The benefits? Glad you asked.

1. Instant Expertise, No Overheads

Building an internal procurement function with the depth of knowledge needed to optimise indirect costs is expensive. With PaaS, you get instant access to a team of specialists without the headcount costs.

2. Serious Cost Savings

Indirect spend, when properly managed, can see savings of 10-30%—simply by consolidating suppliers, leveraging bulk-buying discounts, and eliminating waste. That’s real, bankable savings.

3. Better Deals, Faster

Good procurement teams know the market. They’ve negotiated hundreds of contracts, know where suppliers hide the margins, and can quickly secure better pricing and terms than an in-house team juggling 50 other tasks.

4. Scalability Without the Headaches

Business growing? Need to manage new categories of spend? PaaS flexes with your needs—unlike an internal team, where scaling up means hiring, training, and praying they can keep up.

5. Improved Compliance & Risk Management

Ever signed a contract on a supplier’s T&Cs, only to realise it’s a one-way ticket to cost overruns? PaaS providers know the pitfalls and ensure contracts work in your favour, not the supplier’s.

The Commercial Benefits of PaaS Engagement

PaaS typically operates on a results-driven commercial model, meaning you don’t just pay for a service—you pay for outcomes. There are usually three main approaches:

1. Gainshare Model – The provider takes a percentage of the savings they generate. No savings? No cost. (They’re literally putting their money where their mouth is.)
2. Fixed-Fee Model – A structured cost for the service, perfect for businesses that want predictable spending.
3. Hybrid Model – A mix of both, ensuring a balance of risk and reward.

Whichever approach you take, the goal is simple: spend less, waste less, and get more value from every pound spent.

Final Thought: Stop Ignoring Indirect Spend

While indirect procurement might not seem exciting, it’s a silent profit killer when left unmanaged. Procurement as a Service takes the hassle away, cuts costs, and ensures your business only pays for what it truly needs—without endless supplier negotiations draining your team’s will to live.

If you’re ready to stop overpaying for office supplies, IT contracts, and everything in between, maybe it’s time to leverage external expertise?

Feel free to reach out to discuss whether this could align with your procurement and business objectives.

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