What You Need to Know about Services Procurement and Total Talent Solutions

Chelsea Finn
What You Need to Know about Services Procurement and Total Talent Solutions

Procurement, sourcing, statement of work, purchasing - these are all probably terms that you've heard mentioned in the same sentence at some point. You may have also heard some of these words used interchangeably as well. But are they actually interchangeable?

Let's break down exactly what procurement is and what the benefits are in a Total Talent Solution.  

What is Procurement?

Procurement is the process of sourcing goods and services for an organization. This process involves a lot of different steps from start to finish including finding suppliers, negotiating terms, and the acquisition of the goods or services. Another key responsibility of procurement is recording and documenting all of the steps in the process.

There are several different types of procurement,

  • Direct Procurement - A good or service that is required to make an end-product. This include machinery, resale items, and raw materials.
  • Indirect Procurement - Non-production related items such as utilities and marketing services. 
  • Goods Procurement - Goods that are physically held in inventory, these can be for direct or indirect procurement.
  • Services Procurement - People-based services such as individual contractors, contingent labor, law firms, and security personnel. 

The type of procurement that we'll be focusing on in relation to Total Talent Solutions is Services Procurement which is where staffing services would fall. 

Procurement Versus Sourcing, Statement of Work and Purchasing

If Services Procurement is considered people-based services, why have you heard the terms sourcing, statement of work and purchasing used in conjunction? Let's define how these terms relate to procurement below.

Sourcing: Sourcing is an early part of the overall procurement process and includes activities such as identifying possible suppliers, reviewing and negotiating terms, and choosing which vendors fit the organization's needs the most.

Purchasing: Purchasing in another part of the procurement process, which comes after sourcing but before the payment stage. Purchasing will typically include final negotiations and creating the orders. 

Statement of Work: SOW (Statement of Work) identifies and defines the goals of a project as well as the specific tasks and responsibilities that the contractor(s) will be doing in their role. Many companies that offer Services Procurement Management will also offer SOW Management since SOW is what comes directly after Services Procurement.  

The 7 Stages of Procurement

The amount of stages within your procurement process will depend on the size of your organization but there are 7 key steps that should take place in almost every procurement process. 

Step 1: Identify the Services Needed for Your Organization

Step 2: Start the Sourcing Process and Consider Potential Suppliers

Step 3: Negotiate Contract Terms

Step 4: Finalize the Contract 

Step 5: Receive Invoice and Process Payment

Step 6: Audit Services 

Step 7: Maintain Invoice Records

While managing these 7 steps, you should also start considering what Key Performance Indicators (KPIs) you want to track during your Procurement Services process.

Important Procurement KPIs

The KPIs you choose to keep track of is going to be dependent on the needs of your organization but there are a few that are used consistently. 

  • Cost Savings/Cost Avoidance
  • Contract Spend
  • Lead Time
  • Cycle Time
  • Compliance
  • Total ROI

Once again, every procurement KPI list is going to look different depending on your organization's goals. If you're unsure where to start when it comes to Services Procurement it may be a good idea to partner with a Total Talent expert who can help you figure out what your KPIs should be and assist with managing the overall process. 

The Benefits Of Services Procurement Management In A Total Talent Solution

+ Visibility - Quickly and easily identify services procurement spend alongside staff augmentation.

+ Consistency and Compliance - Ensuring the entire contingent labor process is consistent and compliant with how you want to engage services and temporary labor across your business.

+ Change Management - Business stakeholders will get the best talent they need to meet critical business objectives in a timely manner, while their key suppliers are managed and engaged effectively.

+ Tracking and Cost Management – Examine SOW spend breakdown by business unit and engagement and sourcing rules, while tracking supplier spend, deliverables and performance management.

+ Risk Management – A total talent solution focused on managing and eliminating risks that could negatively impact your organization.

+ Reporting & Analytics – An integrated technology platform and our experienced teams provide holistic data reports and analytics to help organizations improve strategic decisions related to services procurement and temporary labor.


Services Procurement/Statement of Work (SOW) management services are part of DZConneX's (DZX) Total Talent Solutions programs. DZX not only develops but also manages an integrated process in order to ensure clients that SOW engagements are appropriately classified, agreements are accurately written, vendors are properly engaged and services are efficiently delivered. In fact, DZX was recognized as a major contender in Everest Group's 2022 PEAK Matrix® Assessments for Contingent Workforce Management / MSP and Services Procurement / SOW. 

You can learn more about DZConneX's Services Procurement and Statement Of Work Management Services here


DZX Procurement Focus

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