In a rapidly evolving business environment, procurement departments face unprecedented challenges. To stay competitive, they must navigate market volatility, cost pressures and disruptions, while also taking into account ESG and compliance.

Against that backdrop, operating models are changing as organisations turn to digital transformation to bridge the gap between cost, efficiency and resilience. That in turn has given rise to Business Process as a Service (BPaaS), a cloud-based solution that represents a paradigm shift in the way that companies approach their processes.

At the fundamental level, BPaaS is a means of outsourcing non-core competencies and like other forms of outsourcing it relies on third-party providers. It is now increasingly being used in a procurement setting, allowing organisation to use third-party tech and expertise to optimise their source-2-pay process and realise cost and efficiency benefits.

But isn’t this what SaaS does? Well not exactly. There are similarities between both models. Both rely on cloud and both can help to transform business processes. However, the fundamental difference between SaaS and BpaaS is that the former requires an upfront investment and further subscription costs for software, as well explicit costs for implementation and ongoing costs for admin and maintenance.

BPaaS doesn’t – in fact, it’s considerably cheaper. Now, for businesses with hefty budgets or that are in a position to make a large and ongoing investment, SaaS is undoubtedly a viable solution. It is a tried and tested solution that works wonders in the right setting.

However, for organisations operating on smaller budgets or for those that are looking to scale but aren’t there yet, BPaaS is a much more flexible option because it is a subscription-based model that doesn’t require any upfront investment or additional infrastructure – it’s literally plug & play.

Now we know that the current operating environment is a bit of a burning platform for procurement. We know that investments in tech do have to be made in order for organisations to remain competitive, but at the same time budgets are constrained and the aversion to risk remains high – which explains why BPaaS is growing in popularity.

BPaaS is low-risk. In fact, the risks are almost non-existent because there is no initial outlay, no need to pay for additional software and no administrative or maintenance costs. You pay for your subscription and you have access to the tools you need; the provider takes care of the rest for the lifetime of the agreement.

Crucially, it allows organisations to scale their use up or down (or cancel) according to their requirements. Against the current financial backdrop, that flexibility removes much of the risk associated with digital transformation, while equipping organisations with the tools, knowledge and expertise to source efficiently and effectively.

Moreover, because you only pay for what you use, the lifetime TCO of BPaaS is significantly lower than SaaS. Up front costs are minimal where they exists and are dependent on your current set up. Some providers may charge an integration fee that will involve migrating data and some initial training, though these aren’t common.
Some providers may charge for service level agreements (SLAs) that guarantee performance and support levels, while some may charge transition and exit fees if you switch provider – these are not common either.

As digital transformation become more important to businesses, BPaaS will play an increasingly significant role in shaping operations. It will enable organisations to unlock operational efficiency and achieve cost savings, and give them access to expertise that gives them a significant competitive advantage.


Explore how BPaaS technology can transform your Source-to-Pay processes with our excelerated Procurement Business Process as a Service solution and book a demo with us here: