Professional services now play a central role within organizations. They extend far beyond IT, covering areas such as consulting, marketing, engineering, and transformation. They directly impact business performance and an organization’s ability to adapt. As a result, professional services represent a distinct procurement category, built around human expertise and close collaboration with business teams, who are the primary requestors.
For Procurement departments, this translates into a large number of heterogeneous projects, driven by business teams with varying levels of maturity. Unlike other spend categories, professional services are less standardized, harder to compare, and more exposed to operational risk. Scopes evolve quickly, supplier bases expand, and overall visibility often remains partial.
Within this category, fixed-price engagements concentrate these challenges even further. While highly strategic, they remain difficult to structure and manage, with key issues around budget predictability, offer comparability, and performance management. For Procurement, the challenge is clear: regain control without slowing down projects.
Why fixed-price procurement remains a blind spot in Procurement management
A fixed-price purchase is not just a contract, it is a full-fledged project. With multiple deliverables, key milestones to meet, shared responsibilities, and strong dependency on the supplier, effective follow-up requires a well-structured organization.
Traditional Procurement processes, primarily designed for time-and-materials models, are often ill-suited to this type of engagement. Available tools are fragmented or incomplete, making oversight and coordination more complex.
The challenges are multiple:
Preserving business autonomy while ensuring the right supplier selection and proper project execution
Securing risks and controlling fixed-price spend, despite the inherent difficulty of comparing projects
Enabling shared monitoring and value capture between Procurement and business teams, while limiting contractual and financial risks
Fixed-price engagements therefore remain difficult to manage, not due to a lack of intent, but because their very structure makes them complex to govern and control.
Empowering business teams while ensuring a clear Procurement framework
Autonomy only delivers value when it is embedded in a clear framework defined from the very start of projects. The objective is to structure the process without slowing down initiatives, through a framework that is easy for business teams to understand and pragmatic in day-to-day operations. In practical terms, a VMS translates this framework into action: tracking projects from launch, standardizing best practices, and making guidelines visible and easy for teams to apply.
It is precisely this balance between business team autonomy and Procurement governance that determines the success of fixed-price projects, enabling both operational performance and control over Procurement challenges.
Structuring the source-to-pay cycle for fixed-price engagements
To regain control over fixed-price engagements without slowing down the business, Procurement teams must rely on a clear framework aligned with operational realities. The goal is not to over-standardize, but to provide a structured and coherent process, from initial need definition through to project tracking and performance management.
Capturing the business need from the very start
A fixed-price project starts on the business side, where the need takes shape, expectations are defined, and initial scope assumptions are built. For Procurement, the key challenge is to capture this expression of need as early as possible, through a single entry point, without creating friction. Formalization must remain simple and project-oriented, in order to drive business adoption and avoid process bypassing.
Ensuring compliance and budget oversight through workflows
Once the need is formalized, the sourcing workflow allows for efficient management of both time-and-materials and fixed-price engagements, often within the same project portfolio. Business teams retain autonomy to create and launch requests while relying on integrated approval processes that ensure adherence to procurement rules (panels, thresholds, approvals) without slowing down projects or multiplying informal exchanges.
Framing the project without locking it in
Once the need is captured and formalized, it is essential to define milestones and deliverables while maintaining the flexibility to split this definition between the client and the supplier. This approach fosters shared accountability, strengthens ownership of commitments by each party, and ensures the project remains agile throughout its lifecycle.
Securing the competitive process
Competition is a key performance lever, provided it is clearly structured. The rules of engagement must be explicit: participation criteria, expectations on deliverables, and response modalities. A well-managed supplier panel forms the foundation, while still allowing controlled access to non-approved suppliers if the project justifies it.
Compare, analyze, and manage projects
Finally, structuring the sourcing cycle only makes sense if projects can be compared, analyzed, and managed over time. Supplier responses should be presented uniformly, enabling a two-step review — commercial and technical — and facilitating objective comparison. The VMS supports this process by allowing visibility into market rates to benchmark offers, retaining the history of proposals received, and documenting selection justifications. This traceability reduces risks associated with tenders and strengthens the quality of decisions.
Towards mature management of Fixed-Price procurement
Achieving maturity in fixed-price procurement enables the centralization of all stakeholder actions on a single platform, clarifying roles, streamlining interactions, and relying on reliable data.
Mature management starts with clear, shared governance. Responsibilities are defined, rules are known and understood, and every stakeholder — Procurement, Business Units, and Suppliers — knows when and how to act. This clarity allows for transparent trade-offs between proposals.
It also relies on a consolidated view of projects and suppliers. Procurement teams gain a comprehensive perspective on the fixed-price portfolio, contractual commitments, and engaged partners. This cross-functional visibility is essential to monitor performance and anticipate risks.
Finally, maturity directly enhances the quality of interactions and supplier responses. A well-supported and informed supplier delivers more relevant and appropriately calibrated proposals, aligned with project expectations. Clear processes reduce unnecessary back-and-forth, while consistent selection criteria foster healthy and fair competition.
Fixed-Price procurement: from an exception to a strategic lever
Structuring and managing fixed-price procurement goes beyond risk reduction: it is a lever to secure projects, improve overall performance (notably through supplier competition), and strengthen collaboration between Procurement and Business Units.
Ultimately, mature management benefits the entire value chain:
Procurement gains visibility and control.
Business Units receive solutions tailored to their needs and delivered under optimal conditions.
Suppliers operate within a clear framework that supports their engagement and performance.
Contact our sales team to implement structured management of your fixed-price services.
