Traditionally, services were bought by whoever was using the service. But, that was yesterday. Today, 96% of the services buy involves purchasing staff. Compared to 77% in 2003, this is a 20% increase, according to a recent PURCHASING buyers survey. The survey also found that about 70% of companies are including purchasing staff on their cross-functional teams.

Employee benefits ranks among the services seeing the biggest increase, with purchasing staff buying 20% more benefits packages than two years ago. The survey also found that purchasing's involvement in the security-services buy jumped 18%, and its involvement in the temporary-labor buy increased 11%.

But, purchasing's involvement in buying PC maintenance and PC help desk services fell about 5-10% since 2003, because most companies aren't outsourcing those services. (More on that later.) In addition, automating the procure-to-pay process through software is becoming more common in companies, allowing them to visualize and streamline the buy, but only 23% have adopted this strategy.

Michael Duquette, director of materials and procurement at American Science and Engineering (AS&E) of Billerica, Mass., says he knows why purchasing is more involved with buying services. "We're trained to look at the total cost and how it affects the metrics of the company in [connection to] shortages, inventory and cost."

"I know what the baseline is," says Duquette. "Say we're using half a dozen suppliers to get our MRO items and we're using a requisition process that's not good. The real savings is in re-engineering the process and then using e-procurement or e-commerce internet buying and consolidating from six suppliers down to three." That thought process does not reside in the finance or facilities group because they just look at numbers, he says.

Purchasing knows how to restructure requests for proposals by focusing on what it wants and how it wants the suppliers to respond, Duquette asserts. That allows buyers to pick multiple service providers and easily compare them. Purchasing is skilled in keeping the focus on the value proposition, or what is truly wanted, and then leaving it to the service provider to provide a proposal that matches the value proposition, says Duquette.

Of course, purchasing is not an island in the services buy any more than it is in the direct-materials buy. Instead, purchasing staff sit on cross-functional teams, which include representatives of the departments most affected by or most knowledgeable of the purchase. "Finance is always on the team because it tells [the team] whether [the plan] is going to improve the current financial situation or hurt ROI," says Duquette, who heads up cross-functional teams at AS&E.

The expertise that sourcing professionals offer is that they are trained in doing things in a systematic manner, which includes defining the criteria and requirements, then bidding them out to multiple suppliers using e-sourcing tools, and possibly auctions, says Marika Lindstrom, director of indirect sourcing for cell-phone maker Nokia. "From a purchasing perspective, they reduce cost and mitigate risk when being involved," she says.

Moreover, "it's critical to form cross-functional teams because having more people involved is the way to secure the buy-in," she says. By working with other departments, purchasing can collect knowledge about the business requirements, the current business situation and the business environment. "If we did it in sourcing only, we wouldn't be able to get all that information," Lindstrom says.

Of course, the more people on a team, the slower the decision-making process becomes. "But, I still feel that having a cross-functional team is the only way to get the buy-in and get things implemented. It's worth the extra time spent," says Lindstrom.

For example, she says, if purchasing teams up with the marketing department to buy printing services, the marketing department stands to get more for its money. Printing services makes up the majority of most company marketing costs. "If we get the same service with a lower cost, they [marketing] can use the money for something else," says Lindstrom.

One reason for the added value is that marketing's primary focus is not negotiating costs, but getting the best possible creative services. "If we concentrate on the costs and marketing professionals concentrate on the value and quality of the service, then that is a good combination in a cross-functional way," she says.

One service buy where purchasing's involvement has picked up is employee benefits. A few years ago, Hubbell, a manufacturer of electrical products based in Orange, Conn., created a joint program between corporate sourcing and its benefits group using [the former] Freemarkets, a third party vendor, to buy employee benefits, according to William Northup, director of sourcing for Hubbell.

Originally, benefits were bought by the benefits group, which had used seven or eight different vendors just for pharmacy benefits. Purchasing worked with the group and Freemarkets to put together a reverse auction for pharmacy benefits. Result: The company went with just one vendor and substantially saved money.

"I think we helped them [benefits group] analyze better so they could go out for a bid," says Northup. "We helped them pull all the pieces together."

Purchasing's exodus from the buying of PC maintenance and PC help desk services is due to the fact that many companies are performing those services internally, or finding the support elsewhere. Purchasing can help with buying these services, but to outsource is expensive and the market for IT services is competitive.

Duquette, of AS&E says, "We do that [PC maintenance] internally. We talk about outsourcing, but it's expensive. I would be an opponent of outsourcing IT, and I outsource just about anything."

Likewise, Marc Ensign director of strategic sourcing for Sonoco of Hartsville, S.C., uses local college students to support the company's internal PC help desk. He says, "I think supply management can help here as well. I think more IT groups are utilizing different methods of support here."

In addition to the increased involvement of purchasing staff in the services buy, the PURCHASING survey also found that about 23% of companies are using software to automate the procure-to-pay process to buy services. Purchasing professionals reported that it gives visibility to the spend. With that visibility, respondents say, they are able to better negotiate to achieve cost savings.

What's the future likely to hold? According to the survey, 90% of procurement professionals believe that purchasing's involvement with the services buy will grow over the next five years. If they're right, the savings should flow.