Elevate Services Procurement Practices with Fieldglass [New York]
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Today, as much as 30-50% of an organization’s workforce is considered external. Manufacturing companies use contingent labor and services to quickly meet demand, technology companies to find workers for positions with unique skill sets, and oil and gas companies to combat labor shortages. Behind the scenes, they need total visibility in order to optimize all areas of services procurement including complex spend, workforce quality, regulatory compliance and labor program efficiencies. Fieldglass' Vendor Management System (VMS) can help companies achieve this and more, all while easily integrating with other internal systems to enable a holistic view of both talent and spend.
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Elevate Services Procurement Practices with Fieldglass [New York]
- 1. 1 Jorge Chamot October 13, 2015 Elevate Services Procurement Practices with Fieldglass
- 2. 2 Services Providers are Displacing the Direct Workforce © 2015 Fieldglass, Inc. All rights reserved. Proprietary and Confidential. Direct Employees Services Spend 2%-10% of Total Revenue spent on services Service Providers Independent Contractors Temporary/Agency Workers
- 3. 3 Services Spend is Growing Fast © 2015 Fieldglass, Inc. All rights reserved. Proprietary and Confidential. of external labor is unaccounted for spent annually on services $3.3T 55% increase in external workforce spend in past five years 41% more contractors hired than the previous year 67%
- 4. 4 Challenges of Managing Services Procurement © 2015 Fieldglass, Inc. All rights reserved. Proprietary and Confidential. Challenges: - Measuring quality of service delivered - Control of supplier employees with access to systems and facilities - Central visibility into suppliers activities - Vague statements of work - Complex commercial arrangements - Fragmented, redundant supply base - Enforcing use of preferred providers and pricing - Unique and dynamic end user needs Source & Contract PayManageEngage Create Requisition Review Supplier Responses Select Supplier Create SOW Onboard Contractors Submit Deliverables Approve Deliverables
- 5. 5 - Fieldglass’ market-leading cloud Vendor Management System (VMS) automates the complete services procurement lifecycle - Recognized leader for managing all categories of services - Provides visibility and management of service utilization strategies being initiated - Allows for setting engagement structures and classification categories to support corporate policies and local regulations Unified Platform for All External Services © 2015 Fieldglass, Inc. All rights reserved. Proprietary and Confidential.
- 6. 6 Serving Customers Across Industry Verticals © 2015 Fieldglass, Inc. All rights reserved. Proprietary and Confidential. Consumer & Retail Energy/Power/Resources Financial Services Healthcare/Pharma Business Services Technology & Telecom Manufacturing Others
- 7. 7 Designed to Support Multiple Procurement Patterns © 2015 Fieldglass, Inc. All rights reserved. Proprietary and Confidential. Project-Based Services Offshore Services Equipment Tracking Pick & Choose ICs and Freelancers
- 8. 8 VISIBILITY EFFICIENCY QUALITY COSTCOMPLIANCE Benefits of Using Fieldglass © 2015 Fieldglass, Inc. All rights reserved. Proprietary and Confidential.
- 9. 9 Opportunity for 7% - 12% Cost Savings © 2015 Fieldglass, Inc. All rights reserved. Proprietary and Confidential. Levers Description Est. Savings Rate rationalization - Contracted rates for each assignment role - Enforce rate cards 3-6% Competitive bidding - Competitively bidding transactional engagements among preferred suppliers 3-5% Supplier rationalization - Rationalize number of suppliers based on performance - Negotiate lower rates based on higher volume - Reduce supplier management effort 1-3% Service type classification - Decision matrix to correctly classify spend 2-4% Discounts - Volume discounts - Early payment discounts 2-4% Spend visibility - Cost controls through financial authority based approval cycles - Compliance to spend policy - Spend trends and anomalies 1-2% Payment process efficiencies - Payment cycle time efficiency - Accruals management/Cash flow control - Reduction in manual processing 1-3% Program office efficiencies - Reduction in operational effort - Improved compliance to policy - Effectively drive change management Higher efficiency; difficult to measure hard savings.
- 10. 10 © 2015 Fieldglass, Inc. All rights reserved. Proprietary and Confidential. CUSTOMER SUCCESSES in cost savings, due to competitively bidding SOWs and identifying commoditized SOWs $33M+ achieved by tracking SOW revisions, enforcing approvals and limits, and avoidance savings SOFT SAVINGS of Fieldglass data to Cisco’s business intelligence tool for reporting SECURE TRANSFER Rate reporting for all managers to better manage costs REPORTING
- 11. 11 Cloud Model Provides Open Platform © 2015 Fieldglass, Inc. All rights reserved. Proprietary and Confidential. Open integration platform supports all major enterprise systems
- 12. 12 Questions?
- 13. 13 Thank you!
Editor's Notes
- The Total workforce should be looked at in two dimensions: The first segment are those direct workers that companies use a dedicated payroll system or an HRIS to track and manage them. For the most part, many organizations already have that problem solved. The second segment are external workers. Managing them is the challenge. From a workforce perspective, commonly the external workers represents between 30 and 50 percent of the total direct workforce. And from a finance and procurement perspective, the external workforce can represent between two to ten percent of revenue.
- External labor is often poorly managed. Non-payroll labor is the largest spend category. 55% of external labor is unaccounted for, yielding: Higher labor costs Increased regulatory and compliance risk Fragmented, inefficient labor spend and performance controls Source: SIA via USAToday http://www.usatoday.com/story/money/business/2013/07/07/temporary-jobs-becoming-permanent-fixture/2496585/
- For hiring manager’s there are a lot of steps involved in engaging an external worker or service: requesting a resource, to onboarding a worker, to tracking them, to reporting on them.
- Fieldglass’ market-leading cloud Vendor Management System (VMS) automates the complete SOW labor lifecycle -- from initial discovery and qualification through performance management and complex invoicing and payment. Fieldglass is a recognized leader for managing all categories of non-payroll labor spend: Statement of Work (SOW) projects and services Independent contractors Specialized talent pools, such as retirees and alumni Scope of market: Contingent $400 Billion Statement of Work: $1,400 Billion
- Project-based Services Fixed scope Defined beginning and end Often deliverables based Team usually known Calls for rigidity in SOW Outsourced/Offshore Can be offshore or just a remote location Similar to IT Project but more fluidity in the team Calls for some flexibility in SOW Invoice not typically driven by location
- You see, a VMS-Fieldglass delivers a tremendous amount of value. The most immediate is cost savings. Through competition, rate cards, and higher visibility, a company is able to significantly reduce hard costs savings. Our customers typically see a 15-20% decrease in cost in the first year alone. Soft costs can also be driven down through efficiency gains - With Fieldglass a company can standard processes which improves workflow and shortens cycle times – not only time to fill positions, but also invoice cycle time. Many customers are able to take advantage of quick pay discounts. Fieldglass ensures compliance to regulatory requirements by requiring the staffing company to upload proof of certifications, or credentials. Another recent example of this is Rio Tinto, a mining company in Australia. The Fieldglass application has been integrated into Rio Tinto’s Enterprise Resource Planning (ERP) system. This close integration ensures a successful deployment of its global framework and helps the company to maintain Health, Safety, and Environment compliance training during onboarding. Visibility – A VMS provides visibility into all aspects of the workforce, How much is being paid, how are suppliers performing. Increased visibility allows for analysis to identify further optimization and cost savings.
- Goals of the program: simplify and improve its contracting process across its global labor by standardizing rates and leveraging spend by volume. minimize its exposure to legal and financial risk while allowing managers to focus on finding labor with the right skill sets. Mitigate risk by ensuring compliance to regulations, classification, tenure and other requirements. Provide visibility into contingent workforce and services data. This increased visibility into spend would also enable managers to make informed, data-driven hiring decisions.