Hidden iceberg

Hidden services spend

How Life Science Companies Can Uncover Hidden Services Spend and Drive Cost Savings

In the complex world of Life Sciences—where precision, compliance, and speed are everything—services spend can often go unnoticed and unmanaged across multiple business units. This hidden spend, if left unchecked, can cost organisations millions each year. Whether it’s for clinical development consultants, regulatory compliance support, or technology services, fragmented services spend limits visibility, reduces negotiating power, and increases risk.

For Life Science companies operating in the US, UK, or Europe, the solution lies in conducting a comprehensive services spend analysis, supported by vendor management systems (VMS) and often delivered through an experienced Managed Service Provider (MSP). Below are expert tips on how to uncover and control hidden services spend while improving compliance, speed, and overall workforce quality.

  1. Start With a Full Services Spend Audit

A comprehensive spend audit is the foundation of gaining control. This involves reviewing all vendor contracts, invoices, and purchase orders across the business—not just those managed through procurement.

What to look for:

  • Duplicate or overlapping vendors
  • Off-contract or “rogue” spend
  • Unstructured payments to consultants or freelancers
  • Service categories that aren’t centrally monitored (e.g. HR support, IT integrations, QA consultants)

By mapping out your actual services spend landscape, you can identify gaps, reduce duplication, and create a strategic sourcing plan.

  1. Engage Stakeholders Across All Functions

Much of the contingent labour and services spend happens at the departmental level. Business leaders in R&D, Regulatory, Commercial, and IT often hire vendors directly. Engage these stakeholders to:

  • Verify current suppliers and use cases
  • Understand pain points and needs
  • Identify shadow procurement processes

Cross-functional collaboration not only brings visibility, it also builds internal buy-in to support a more centralised, cost-efficient procurement strategy.

  1. Review HCM and IT Systems to Identify Vendor Access

Hidden spend can often be found by auditing HCM systems, time-tracking platforms, and IT logins. Vendors may have retained access to key systems long after their engagement ends—or be using systems outside the agreed scope.

What to audit:

  • System access linked to contractors or consultants
  • Ongoing license fees not tied to performance
  • Unmonitored third-party integrations

By aligning system access with vendor status, companies can reduce waste, tighten security, and improve compliance.

  1. Compare SOW Deliverables vs. Actual Outputs

A common cause of unforecasted spend in Life Sciences projects—especially in R&D and clinical operations—is scope creep within Statements of Work (SOWs). Many organisations fail to regularly review whether a vendor’s contracted deliverables match what is actually being delivered.

Key steps:

  • Audit current SOWs vs. real-world project milestones
  • Assess vendor performance objectively against agreed outputs
  • Identify projects that have drifted beyond initial scope

This can reveal where unbudgeted time or resource increases have slipped through unnoticed, leading to cost overruns. Embedding this review process within your MSP oversight can significantly reduce contract leakage.

  1. Use Market Data to Benchmark Costs

Understanding whether you’re paying fair market rates is essential. A benchmarking analysis using life sciences-specific compensation data can:

  • Reveal inflated day rates or unnecessary markups
  • Highlight opportunities to consolidate vendors
  • Support cost-saving renegotiations

This is especially useful for high-demand talent in biostatistics, regulatory affairs, and data science, where niche expertise often commands a premium.

  1. Leverage MSP and VMS Tools for Real-Time Visibility

Once services spend is wrapped into a Managed Service Provider (MSP) model supported by a Vendor Management System (VMS), you gain full visibility and control over your external workforce. MSPs act as a central point for:

  • Supplier management and rationalisation
  • Rate standardisation
  • Compliance and IR35 classification (UK) or 1099 oversight (US)
  • Real-time analytics and dashboards
  • Governance and operational consistency

With VMS tools, organisations can monitor spend by category, project, business unit, and supplier, while also tracking contract compliance and service quality.

Why This Matters for Life Sciences

In today’s environment—where speed to market, innovation, and regulatory compliance are paramount—hidden services spend is a silent obstacle. For pharmaceutical, biotech, and medtech companies, unmonitored spend can:

  • Delay clinical trials
  • Increase compliance risk
  • Limit investment in innovation

By uncovering and managing services spend through a strategic workforce solutions partner, life sciences organisations can ensure they bring in the right talent at the right time, without overspending or compromising on quality.

Hidden services spend is a challenge—but also an opportunity. Life Sciences companies that invest in strategic MSP partnerships, modern VMS platforms, and cross-functional spend analysis will gain measurable savings, stronger compliance, and faster access to top talent.

Ready to uncover hidden spend and unlock savings? Contact us to explore how a tailored MSP model can help your organisation scale smarter.

By Hodan Barltrop, Programme Director, Skills Alliance Enterprise

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