Services Spend Management

                             Industry Trends, Best Practices, and Going Global




            ...
Jobless U.S. Market…Reading the Tea Leaves

  Full-time Employment




                                                   ...
Jobless U.S. Market…Reading the Tea Leaves

 Economic recovery begins with Contingent Labor…




                         ...
Simplified Industry Terms*

 Master / Prime Vendor Model
     Single staffing vendor
     Supplies and manages all conti...
Definitions: Simplified Categories




                           1                     2                             3
  ...
Value

 Why consider a services spend management program?

  Strategic Positioning
      Enables organizations to re-focu...
Assessing Global Services Spend Management

                                        Headcount, location, category, and sp...
High Level Vision: Optimal Model

 The integrated service and technology solution builds internal and external strategic
 ...
Timeline: Global Program

                                           Assess current state
Business Case / Approvals      ...
Critical Program Attributes


     Program Engagement – Conduct engagement meetings with high touch executives
      and ...
Critical Program Attributes (Cont’d)




     Reporting – Communicate inventory of standard reports during training sessi...
Program Challenges


    “Tip of the Spear” – Workforce Planning

    Supplier-funded vs. Buyer-funded Model

    Conso...
The Future is Taking Shape Now

The “Req-to-Check” process and support technology is similar across all three categories

...
Services Spend Management
                             Industry Trends, Best Practices, and Going Global




             ...
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Crescendo Services Spend Management

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Services Spend Management: Industry Trends, Best Practices, and Going Global – Thomas F. Kaminsky, Managing Director

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Crescendo Services Spend Management

  1. 1. Services Spend Management Industry Trends, Best Practices, and Going Global Thomas F. Kaminsky, Managing Director Crescendo Consulting Solutions March 9 – 11, 2010 ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com
  2. 2. Jobless U.S. Market…Reading the Tea Leaves Full-time Employment   Difficult times continue… –  9.3M permanent job losses as of Jan 31, 2010 –  Since Dec 2007, construction employment has decreased by 1.9M jobs   However, there is hope… January 2010 positive indicators –  Healthcare employment increased 15k –  Federal employment increased 33k including 9k temporaries for census ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com *Source: BLS Report for January 2010 2
  3. 3. Jobless U.S. Market…Reading the Tea Leaves Economic recovery begins with Contingent Labor…   … buried on Pages 3 & 20 of the BLS report … –  Temporary help services added 52k jobs in Jan 2010 –  Since Oct 2009, 247k temporary help services jobs have been added. How will this shift impact your organization? What are the risks and opportunities? How does this impact other initiatives within Procurement and Human Capital? ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com *Source: BLS Report for January 2010 3
  4. 4. Simplified Industry Terms* Master / Prime Vendor Model   Single staffing vendor   Supplies and manages all contingent labor needs Managed Service Provider (MSP)   Vendor-neutral   Facilitates end-to-end lifecycle (e.g., requisition through payment)   Single point-of-contact Vendor Management System (VMS)   Automated system for tracking supplier data (e.g., candidates, rates, spend, performance metrics, etc.).   Expedites requisition-to-pay process across categories (IT, administrative, manual labor, consulting, manufacturing, finance, etc.)   Integrates with client legacy IT platform (e.g., Oracle Financials, PeopleSoft, etc.) Independent Contractor Engagement Specialists (ICES)   Minimize the risk of co-employment or federal audits   Provide electronic compliance surveys   Payroll services ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com *based on research by Aberdeen Group, 2009 4
  5. 5. Definitions: Simplified Categories 1 2 3 Services Direct Hire Contingent Procurement / Labor Other Services •  Full-time or Part- •  Temporary Help •  Specialized labor time Employees •  Clerical / •  Professional Administrative Services Support •  “Statement of Work” •  “Time & Materials” •  Fixed fees / contract •  Hourly rate rate •  Staffing firms •  Independent Contractors / 1099 •  Off-shore suppliers ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com 5
  6. 6. Value Why consider a services spend management program? Strategic Positioning   Enables organizations to re-focus on core businesses and shift non-core functions to highly skilled, lower-cost suppliers. Cost Containment and Savings Potential   Shifts business planning and expense from a standard, fixed model to a more flexible, scalable, “pay as you go” model. Talent Management & Workforce Planning   Provides companies across all industries access to specialized talent and skills without losing productivity. Based on continuing market analysis and client work, it is our view that a proactive services spend management program supported with the right tools and processes will be a competitive advantage for forward thinking companies. ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com 6
  7. 7. Assessing Global Services Spend Management  Headcount, location, category, and spend  High volume end-users  Top suppliers Visibility  Specialized requirements  Right-size your workforce  Processes to up or down skill in times of change Scalability  Speed to access specialized talent  Sustain productivity  Co-employment & Tenure risk  Proper screening Risk  On & off-boarding Management  Financials  Normalized job titles, skill levels, and job definitions  Accurate classification of contingent workforce Program  Highest quality workers at the lowest possible rate Savings  ROI / Sustainable savings ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com 7
  8. 8. High Level Vision: Optimal Model The integrated service and technology solution builds internal and external strategic business partnerships and provides labor, supplier, and spend expertise supporting an organization's business goals and cost reduction objectives in compliance with applicable legal and regulatory requirements. Optimize Sourcing & Achieve Savings Establish a global, centralized Program 1 Management (PM) model overseeing the all services spend categories Managed Change Service Management Provider (CM) Strengthen Preferred Provider Programs (PPP) (MSP) 2 seeking highly qualified, cost-effective suppliers Program (IT & Non-IT Temp, IT Consulting, Mgt Consulting, etc.) Management (PM) Outsource implementation and administrative 3 Program Mgt Office (PMO) services to a Managed Service Provider (MSP) Preferred Provider Vendor Management Program Solution Implement a Vendor Management Solution (PPP) (VMS) 4 (VMS) that improves data management, spend visibility and reporting Continue comprehensive Change Management 5 (CM) effort to root new policies, procedures and practices across the organization ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com 8
  9. 9. Timeline: Global Program   Assess current state Business Case / Approvals   Define future state vision & requirements 2-3 Months   Complete financial model & budget   Create governance & secure executive sponsorship   Gather market intelligence VMS & MSP Selection   Identify suppliers 3-6 Months   Complete RFI / RFP process   Negotiate Terms & Conditions Strategic Global Phased Implementation 6-18 Months   Complete program planning   Complete system & end-user configuration   Define Regional / Global strategy   Ensure technology integration   Gather business requirements   Conduct supplier & end-user training   Complete Fit/Gap   Distribute knowledge management   Facilitate change management   Enable service delivery model   Deliver program communications   Launch operations and optimize SOPs   Gather market intelligence Preferred Provider   Identify suppliers Program   Complete RFI / RFP process 3-6 Months   Negotiate Terms & Conditions 12-24 Month Duration ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com 9
  10. 10. Critical Program Attributes   Program Engagement – Conduct engagement meetings with high touch executives and high volume suppliers. Define program success, responsibilities and expectations ensuring program success.   Program Planning – Engage key stakeholders and high volume users early in the process gaining their participation, input and ownership of the business process.   Implementation – For global implementation, ensure data privacy and local regulatory issues are addressed.   Supplier Management – Establish a single point-of-contact to manage the supply base from start to finish.   Integration – Engage cross-functional business and technical resources during discovery sessions to gain a complete understanding of data requirements, approvals, payment requirements, etc. ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com 10
  11. 11. Critical Program Attributes (Cont’d)   Reporting – Communicate inventory of standard reports during training sessions. Conduct follow-up sessions to gather ad hoc / customized reporting requests. Define a plan for delivering customized reports.   Communications – Ensure business communications have a clear message. Disseminate information through a formal top-down and bottom-up approach.   Training – Provide hands-on, integrated training sessions on changing business process and new technology with follow-up conference calls / in-person debrief sessions. Ensure all job aids and training collateral are available to participants prior to each session.   Services – Launch services team at least 30 Days prior to Go Live ensuring time to establish services capability and delivery to hiring managers and suppliers. ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com 11
  12. 12. Program Challenges   “Tip of the Spear” – Workforce Planning   Supplier-funded vs. Buyer-funded Model   Consolidation of IT Temporary & IT Consulting Job Titles   “Global Localization”   Professional Services program engagement (e.g., Mgt Consulting, Legal, Audit, Tax)   Risk Management –  1099 Independent Contractors –  Off-shore suppliers –  Status Quo ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com 12
  13. 13. The Future is Taking Shape Now The “Req-to-Check” process and support technology is similar across all three categories 1 2 3 Services Direct Hire Contingent Procurement / Labor Other Services Consolidation and investing across Services and Technology suppliers continues in order to gain competitive advantage and capture multiple categories of spend. 1 2 3 Services Direct Hire Contingent Procurement / Labor Other Services ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com 13
  14. 14. Services Spend Management Industry Trends, Best Practices, and Going Global Blog - www.crescendoconsult.com/ @crescendocnsult crescendo-voice ©2010 Crescendo Consulting Solutions www.CrescendoConsult.com

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