Observations from SIG Toronto

This week HCMWorks sponsored the Sourcing Interest Group’s (SIG) Innovation Forum in Toronto.  This year’s event drew close to 100 procurement professionals predominately from Canada with a small U.S. contingency.  The event was hosted by Telus in their LEED CS (Core & Shell) Gold certified building issued by the Canada Green Building Council in downtown Toronto.  (More on the building go to: Telus Green)

Across a host of procurement transformation, innovation and thought leadership, the one day event was rich in content.  However, HCMWorks observed a few key reoccurring themes that seemed to be prevalent amongst this group, especially at the HCMWorks hosted Roundtable.  Our roundtable drew approximately 45 participants in 3 different sessions.  The topic discussed was:

Procurement Organizational Models:

1. Decentralized
2. Centralized
3. Center-led
4. Centers of Excellence

How to Affect Procurement Tranformation

The discussions surrounded how to affect procurement transformation. Here are some of the key “take-away’s”:

1. No company that shared how their procurement organization was organized seemed to feel that they were squarely in one of the 4 models.  All organizations felt they were a hybrid.
2. Within each company’s procurement department participant shared that certain areas fell into different organizational models.  For example; one company might have a Center of Excellence for contracts and then have centralized sourcing for purchases over a certain spend threshold.
3. All companies indicated having varying spend thresholds that triggered engaging procurement in some aspect; sourcing, contracts, supplier risk, etc.
4. There was a big spread in overall spend under management amongst the participants ranging from 40 – 95%.
5. There was also a big spread in the self-proclaimed maturity of their procurement organization, ranging from the “very mature and transformed” to the “emerging credibility” within the company.

Most Common Procurement Issue

Needless to say, the differentiating models and maturity were extremely interesting but the common underlying issue that we uncovered was that all organizations seem to struggling with procurement “administrivia”.  The transactional and administrative work inherent with procurement is serving as an inhibitor to more strategic growth and maturity.  All roundtable participants echoed the sentiments that managing transactions, contract processing, and supplier relationships were preventing them from acting in a greater strategic capacity to their corporation.

Many of the procurement executives we spoke with expressed frustration in having the lack of staff and/or systems to off load the more administrative actions within procurement to allow them to do what they are trained and experienced to do… Source, Negotiate and Manage large corporate buying activities.

Shaping A Successful Procurement Strategy

At HCMWorks we know, through our firsthand experience working with clients, that changing this focus can have a substantial ROI for any company.  Shifting the focus of away from transactional and more focus towards strategic activity within procurement operations can have a compounding effect on savings.  A basic business strategy to move an organization forward; outsource the routine/non-core activities and keep the professionals focused on the highly leveraged activities.

Much of the value HCMWorks brings to the market has been in the accounts where we have taken over the transactional day-to-day support and enhanced the procurement professional’s ability to deliver real value.  By senior procurement staff being afforded the time to focus more intently on key buying, negotiating, and contract actions, the company can experience greater strategic direction and support.  Additionally, this also comes with greater risk mitigation and compliance. 

Outsourcing the transactional, contracting, and reporting to a 3^rd party enables a greater visibility to the procurement organization.  This visibility continues to enhance the strategic capabilities of the department.  Remove the elements that bog down procurement operations, outsource non-core activities and put the Strategy back in Strategic Sourcing.

Interested in more? Download “Turn up the VOLUME: How to Become a Procurement Rock Star” to gain further insight into corporate indirect procurement.

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Seinfeld, Magic Eight Ball & Call of Duty

Is your procurement group ready for a year of impact filled results?  Are we expecting more of the same?

With great anticipation HCMWorks launches into our 7^th year of servicing the procurement industry. We had a lot of great success that resulted in impressive indirect spend savings for clients and observed a rapidly changing segment within procurement, where there is a tremendous interest in accessing information to ‘get it done’, an increasing awareness of the scope of the possibilities, accompanied by a reluctance to engage with a process to effect that end. Is there procurement analysis paralysis within your corporation?

Let’s recap some of the last year key events in procurement and give our perspective on what we might see in 2012.

Procurement Analysis of 2011 – “It’s a Story about, Nothing!”…

Forgive the Seinfeld reference but as Jerry and George tried to sell the NBC executives on their TV pilot about “nothing”, we saw this as the theme in procurement operations in 2011.  It was, in HCMWorks’ view, a bit of a static year in terms of real meaningful action being taken within procurement operations.  We continue to see a fever for information and metrics gathering, everyone looking for the “silver bullet”, but no real meaningful transformational procurement action was apparent across the board. 

In speaking with prospective businesses in 2011, we even learned of numerous activities where the promises of successful procurement programs lead to unfulfilled goals or even sunset operations due to poor planning and ineffective implementation of resources allocated.   These stories are documented in our blog titled “Procurement through Prayer“.   We still see a lot of poorly executed procurement programs where big savings exist.

When visiting many large North American corporations, we found there to be pent up appetite to effect change but a seemingly invisible barrier to move to action.  Possibly the headcount reductions over the past few years has left procurement paralyzed and ineffective in its ability to mobilize and effect change.  Even the option to outsource non-key areas with BPO services seem to take a stall when the short term investment is “squashed” by executives because of a “no spend” policy.  However, we believe, corporations continue to miss the savings opportunities within their company when they choke procurement’s ability to implement meaningful ROI projects.  Not the 3-5 year return projects and/or technology implementations but the 6-12 month opportunities that can effect change. 

In our recent white paper, Turn Up the Volume: How to Become a Procurement Rock Star, Dan Roehrs of HCMWorks documents the success of Salesforce.com, Rent-A-Center and others and how they’ve achieved procurement success by focusing on volume lead adoption.

While we saw organizations, as outlined in the white paper mentioned above, achieve procurement success, we also recognized significant success in volume and savings increases within our new and existing clients.  However, outside of these few instances, overall we continue to see and feel a high level of tactical reaction, but little-to-no strategic pro-action in addressing indirect procurement opportunities.  In early 2010, we presented a 30MM savings opportunity with a 6 month ROI to a Bank that has yet to pay back its TARP funding and is desperately pursuing more capital to remain viable…yet, the Bank has yet to make a decision to act in 18 months.  Two other institutions are paying for licenses for indirect procurement technology that is sitting on their shelf.  Proposals to implement and optimize these modules fell on inactive ears.  Not lost to competitors but lost again to “do nothing”.

Procurement Predictions for 2012 – Early Optimism?

As we embark on this new year, global eyes will once again be on the United States to see what direction the election of a new President will take us. Election years often spur optimism for “change”. Once a colleague told me that, “January 1^st was really only December 32^nd“ but ironically we often psychologically assign optimism to the belief that a new year, a new day, will somehow ensure success.  However, like any good New Year’s resolution, without real commitment to action coupled with a dose of willpower, 2012 might find us right back on the “wait and see” sidelines.

Evident to this was last year’s early optimistic results in our annual Indirect Procurement Survey for 2011. The 2011 results clearly pointed to tremendous opportunity with Indirect Procurement with over “79% of respondents reporting Indirect Services is the best “Area of Meaningful Corporate Savings Opportunity”, the enthusiasm pointed to identified opportunities and potential action.  Again, we continued to see little to no real concerted and unified action being taken by organizations to leverage these reported opportunities.

Additionally, our Survey Results below pointed to the fact that in 11 of the 13 categories offered where organizations pointed to savings opportunities that received a “Very Likely” rating for savings…  But yet, our early 2012 polling numbers show far less action was actually taken and the associated cost savings went unrealized in these categories.  Another indicator that procurement was forced to sit and wait…

In our soon to be released 2012 procurement survey, we will take a strong look this year and what factors are driving “paralysis” within procurement.  Even in this week’s bi-weekly polls with LinkedIn, we are asking for an early vote on, What is the biggest obstacle preventing your “procurement-led” New Year’s Resolution for 2012? This theme of inactivity will remain a strong focus for HCM throughout the early part of 2012.

Forecasting Growth of Procurement Technology – Shaking the Magic Eight Ball…

While HCMWorks is not in the business of forecasting long range industry outlooks, (we will continue to leave that work to the Everest’s and Aberdeen’s of the world) we always welcome a shake of the proverbial Magic Eight Ball.

We do remain bullish on the continued growth within the global procurement business process outsourcing (BPO) market.  We see a strong change-over within procurement BPO to an emerging model we endorse which is referred to Business Process as a Service (BPaaS).  This model is being looked at with more and more success especially within Indirect Procurement arena.  With the realization that there is a necessary need for ongoing transactional management and volume-led adoption for these programs to be successful, the evolution to a greater “internal services” model from procurement when managing indirect goods and services has proven to be a key in program success.  The “high touch” service model can achieve compelling ROI by virtue of unprecedented adoption.  Adoption then aids in expansion of the program and the exponential growth of the ROI.

Additionally, we see further consolidation of the niche procurement services technology providers into more holistic services procurement P2P platforms.  Currently the market remains both “broad and thin” and “deep and narrow” as it pertains to services procurement technologies.  A few more enterprise procurement technology platforms have hit the market with a version of services procurement modules that provide on-demand P2P for services.  However, while these systems encompass many services categories they still do not contain the depth of functionality that some of the more prevalent niche solutions offer.  Technologies that point to categories like staffing, legal, travel and others create a great yet disparate tool set for the managers of these categories.  Therefore, we see further development into deeper more enterprise wide indirect procurement solutions on the horizon.  We believe these systems will come as a result of continued M&A activity, as recently demonstrated by IBM’s acquisition of Emptoris and more rapid development efforts from those committed software providers in the race to capture the indirect procurement market.

Achieve Success within Indirect Procurement – Call of Duty

In 2011 we published a series of videos where we asked 5 basic questions to 5 procurement executives from, Dannon, Bell Canada, National Bank of Canada , Cardinal Health and former CPO, Tim Houghton.  What was interesting, upon reviewing the videos, is that each executive’s recap was essentially the same.  To achieve real success within Indirect Procurement you need to:

1. Start Small and Think Big
2. Get Executive Support
3. Created a Proof of Concept
4. Just “Get it Done”

Is it really that easy?  Just listen to what these companies have achieved.  These unscripted interviews demonstrate the success and value that is at hand.  Readers can also access a case study we did with one client that returned them 17% savings or $70MM over 4 years.

In conclusion, HCMWorks remain optimistic that indirect procurement is an untapped opportunity for most organizations.  We are confident that with a commitment to success and in following basic business tenants these programs can outperform many corporate initiatives in the delivery of real cost savings that enhance shareholder value or can be redirected as most appropriate.  All employees have a call to duty to optimize shareholder value.  Inaction should no longer be the accepted norm.

Success will remain firmly on the back of those few who make the commitment to engage, and the actions of many to deliver, if we hope to breakout of the current corporate procurement malaise and achieve the potential that currently remains overlooked.  Will your corporation continue to…do nothing?

We look forward to continuing to offer you thought leadership within indirect procurement and further developing our relationships as a trusted advisory resource, and further, to engaging with you online and in person at the various procurement conferences in which we’ll be participating, in 2012 and beyond.

Best wishes for a wildly successful year!

Our recent blog post, Vendor Neutral: What’s the Truth has caused quite a stir over the last few weeks, as any good blog should.  While the post was really intened to draw attention to the lack of industry reporting accuracy from Erin Harrison, Executive Editor of MSPNews and Staffing Industry News who recently proclaimed Allegis Ranked Largest Global Vendor Neutral MSP.  Erin’s facts were taken from a recent Staffing Industry Analysts publication declaring Allegis’ alleged position in the market.

Managed Services Programs by Vendor Neutral Staffing Company???

HCMWorks elected to call out both organizations on their inaccuracy in reporting by stating Allegis as being “vendor neutral” or imply they are not a staffing company nor do fulfillment in their Managed Services Programs.  This categorization is not accurate as you can read in the facts we presented in our previous blog post.  To take the “call out” a step further, HCMWorks and our partners at LinkedIn created a poll asking the market whether they believed that a staffing company could operate Managed Services Programs in a completely neutral way.  In a way that would completely preclude them from ever filling staffing requests generated at their client’s site.  There are many games staffing providers, having been one once, will play to circumvent the shroud they hide behind as an alleged Vendor Neutral MSP.

It’s important to reiterate that we are not so offended that these large staffing companies would pretend they are vendor neutral, because they have been doing it for years.  What, and where we expect more, is from the so called unbiased publications that follow the industry and self-proclaim themselves as “known for its independent and objective insights”.  Can we all just be honest here?  What we are offended by is that these industry publications and staffing companies missrepresent who they are. There is perhaps a market for a company that wants to drive revenue to themselves in this space, and or simply manage spend, but you can’t have your cake and eat it too. You have to be one or the other.

The Poll

With over 50 respondents in over 1 week of posting, our best response to any poll thus far, clearly 71% of the respondents confirmed our position that staffing companies cannot be vendor neutral.  Additional supporting positioning came from several current and previous industry professionals who anonymously, for fear of industry repercussions, responded to us in comments via email.  These professionals shared with us cases where the “neutral MSP” did not operate with full disclosure to the market. 

One former Allegis Executive commented, “everything you are saying is true. In fact, AGS will not manage a VMS / MSP deal that prohibits their operating companies from being a part of the vendor community”. This and other numerous confirmations we have received continue to validate our assertions that staffing companies are not vendor neutral.  We do not position that they cannot function in a vendor neutral format but it is inaccurate for the companies and their divisions to portray themselves to the market as vendor neutral. 

It’s time for them and the industry publications to come clean and represent them as they really are; strong and competent staffing companies with a managed services offering.

So, what does HCMWorks want here? Simply, what these articles and polls set out to accomplish.  Call the market’s attentions to the truth in which companies are Truly Vendor Neutral. An open and honest forum where corporate buyers can glean accurate and truthful industry information in order to make informed and accurate buying decisions.  Please?

To continue the discussions, joint our linkedin group. 

In our November Poll, What procurement activities are you outsourcing (or planning to)? (See Results), we wanted to explore what the market was looking at in terms of areas of outsourcing.

Of the choices; P2P (Purchase to Pay) Transaction, Procurement Back Office/Admin, Sourcing Related, Spend Vis/Analysis, Category Specific; “Category Specific” lead the responses in a wide margin of more that 2:1 next to P2P Transactional.

As with some earlier observation, it would appear that procurement departments continue to be driven by the tactical aspects of their corporate roles.  One respondent observed that there is not the ability to choose more than one choice and that is a limitation with the LinkedIn utility.  We are working with them on that, however, this indicated that some respondents have multiple areas under consideration for outsourcing.

For more information on indirect procurement savings opportunities, please see our white paper, Identifying Savings Opportunities Within Indirect Procurement or to learn more about how your company should take holistic approach to labor as a productivity measurement, read Total Cost of Productivity.

We hope to continue to share our insights on the polling results as they become available.  However, we cannot without your support of the polls.  So, please subscribe to our RSS feed or follow us on Twitter or LinkedIn so you can be notified when new polls are posted.

by Ted Weyn, HCMWorks, Managing Partner

In a recent article published by Erin Harrison, Executive Editor of MSPNews, titled, Allegis Ranked Largest Global Vendor Neutral MSP, Erin reports how in a recent Staffing Industry Analysts (SIA) report (NOTE: SIA is owned by Crains and is for profit) Allegis was the leading “Vendor Neutral” Managed Service Provider (MSP) Globally.  When they report on the term, “Vendor Neutral” they are alleging that Allegis, who is one of the largest staffing companies in the world, is not providing the services of staffing placements to those clients who have engaged them in the outsourced management of those placement services.  How can that be?  Erin, SIA only sends this poll to it’s members, not the industry.  Keep in mind, it’s no coincidence that Car & Driver Magazine consistently ranks the best automobiles to those who advertise the most.  There is a correlation with advertising and coverage. But you’re a seasoned journalist, you get that…don’t you?

Are Staffing companies vendor neutral? 

Be Heard! Take our Poll: 

Can staffing related MSPs really be “Vendor Neutral”? (“fox in the hen house”)

Not to pick on Allegis, because all in the industry do this; Manpower, Kelly, Adecco, and others, claim their management programs are “vendor neutral” and that they do not participate in the fulfillment (placement of temporary resources) for their MSP corporate accounts.  Why does the industry continue to create this facade?  Let’s “call a spade a spade”.  Staffing companies are NOT vendor neutral.  Yes, they can “play a neutral role”, but as outlined in our White Paper The Value of Truly Neutral, there will always be market dynamics that will pressure the and cloud the perceived neutrality.

Why is the staffing industry so afraid to say, “they are NOT vendor neutral?” 

Let’s turn our attention back to Allegis, sorry Allegis, and ask ourselves some questions?  If Allegis is “vendor neutral” they why does their website say: “Allegis Group is the largest privately held staffing company in the United States and serves a wide variety of industries.”  They list the following staffing companies under their ownership as being: Aerotek, TEKsystem, Stephen James, MarketSource, Major Lindsey & Africa, Inside Edge Legal.  These are all well known staffing companies.  Why is the staffing industry so afraid to say, “they are NOT vendor neutral?”  Shouldn’t they be proud that they provide an excellent service in the fulfillment of temporary staffing needs? 

We at HCMWorks, being ex-staffing industry executives believe that it is because they know their client corporations will perceive this as a conflict of interest and be seen as putting “the fox in the hen house”. Staffing companies don’t want to manage programs, they want to do more fulfillment of temporary placements.  Can Allegis claim that in 100% of the accounts they reported for the SIA report that none of their staffing entities do fulfillment at those accounts?  If the answer is, “no” then, Allegis is NOT Vendor Neutral.

So, let’s put a call out to the staffing industry; the SIAs; the analysts; the VMS system providers; to provide real thought leadership and instill trusted advisory status in referring to vendor neutral in what is Truly Vendor Neutral.  Let’s stop allowing the staffing companies to represent themselves to be something they’re not.  Let’s be honest and identify the companies for what and who they really are.  We have no problem with a corporation having a staffing company be the MSP, it’s not what we’d consider a Best Practice, but we have seen them work for companies who similarly want to just manage their temp labor.  In a limited view of indirect expense management a staffing provided MSP can serve a need.

Services procurement is not merely SOW work

Finally, one last rant, then I’ll move on…  Erin also report that, “Allegis also ranked second globally in the Services Procurement (SOW) segment as they increased spend under management from $700 million to $900 million in 2010.”  Service Procurement is NOT statement of work (SOW) style business only.  Erin needs to do some more research on Direct vs. Indirect Procurement.  Then fully understand how services procurement is a sub-set of Indirect Procurement.  Services procurement is not merely SOW work.  Services procurement is any services procured by a firm. True indirect services categories include, but not limited too:

• IT Services
• Offshore outsourced services
• Marketing
• Call Centers
• Consulting Services
• Network and Cabling and Construction
• Printing
• Logistics
• Travel
• Legal

Misusing The Term “Services Procurement”

Therefore, we raise an eyebrow when Allegis is applauded as number two with 900MM “Services Procurement” under management when our firm manages companies who individually have over $1B of true indirect services expenditures.  Again, please stop misusing these terms which does a great disservice to our firm and is a misrepresentation in our industry.

In closing we ask that the authors and  influencers of this industry do the industry a service by not mis-classifying terms, data and market representations.  It only causes to make our industry look foolish and discredits our ability to expand the services footprint within the Global 1000 companies.  It’s OK to be a staffing company that provides MSP services.

Polls Providing a Peek as to What’s Important to Procurement

As previously announced, HCMWorks has partnered with LinkedIn to provide single question polls designed to quickly take the pulse of the procurement market.  We wanted to continue our market thought leadership by leveraging the recognition we have already achieved with our annual survey by continuing to take the pulse of the procurement market year round, to provide procurement professionals with insight on some of the current procurement issues or evolving trends.

The current and past two polls have been very interesting and can be viewed on our website under our Thought Leadership Surveys.  Also, readers can participate in our current active Linkedin poll related to procurement.

Procurement Professionals Struggling with Execution

In our first survey we wanted to take the pulse of the procurement market to see what tasks were on front of mind for the pollsters.  Of the choices; Execute, Create, Save, Collaborate, or Advise; “Execute lead the responses with 38% of the votes with Save coming in second with 29%”.  What does this mean? It would appear that procurement departments are still being driven by the tactical aspects of their corporate role.  Unfortunately, “Advise only gleaned 6% of the votes”.  We see this as understandable yet still disappointing. 

While we continue to see a slow evolution of procurement continuing to move towards the strategic value they can provide, the department still is being relied upon to perform the necessary tactical purchasing needs of the organization.  Procurement organizations still struggle to secure their value within the corporation and are, like many, at the mercy of the economic conditions to predicate their value. 

Without strong executive leadership within procurement , who can communicate the strategic value to the C-Suite? We believe that procurement’s role will continue to be an evolutionary saga rather than a dynamic force within a company that achieves significant cost reductions, that add to the bottom line results and increase shareholder value. Lost opportunity…

Labour is Biggest Indirect Category Focus

In our second poll we wanted to see what indirect categories were garnering the most attention.  Of the choices; IT Services, Travel, Telecom, MRO/Office, Labor (Contract, Consulting, etc.); not surprisingly, “Labor came out on top with 34% of the vote, with IT Services (22%) nudging out MRO/Office(20%)”.  Labor in the soft economy continues to be an important facet of any company’s current manpower planning.  With fibrillating market conditions the supplementing of “just in time” labor is increasing in its use and therefore it’s management.   IT Services as a close second typically will include labor resources in the form of SOW and/or fixed deliverable projects, that are at the root, labor productivity. 

For more information on steps to prepare your labor programs for a recovering economy, please see our white paper, Ahead of the Curve. To learn more about how your company should take holistic approach to labor as a productivity measurement, read Total Cost of Productivity.

We hope to continue to share our insights on the polling results as they become available.  However, we cannot without your support of the polls.  So, please subscribe to our RSS feed or follow us on Twitter or LinkedIn so you can be notified when new polls are posted.

Procurement provider’s prospective

Like many in the spend management space, our company continuously seeks relevant and meaningful thought leadership solutions related to cost and return.  Many of us at HCMWorks have been a part of SIG in the past and appreciate the level of community support, learning, and innovation that takes place. For these reasons, this is why we chose to focus our attention on this organization this year.

During the multiple social events at this year’s SIG, I was able to speak to a number of fellow SIG sponsors and procurement and sourcing leaders that were there for the first time.  Like our company, they came because of the reasons I mentioned, but they also liked the atmosphere of no-selling.  Although there’s no shortage of sponsorship messaging (even the candy bars had re-wrapped logo messages on them), it’s always been a long-standing and well-respected “code” with SIG to bring together thought leaders without making it another “booth farm” or by making its members feel like they were going to be “sold a vacuum cleaner”.  Interestingly enough, a procurement executive asked me why I would choose to participate in this versus a venue that was more “sales friendly”?

Here’s Why…

I am part of a company who genuinely wants to be an organization who goes beyond simply claiming to be “an expert” by helping similar procurement and sourcing professionals through difficult and complex issues.  We want to engage, learn about issues that are top-of-mind and share positive innovation in the procurement industry.  Our firm seeks out that market knowledge to equip our company with the tools to help clients “get it done”. While many other events and forums offer narrow or specific forms of this, it’s been difficult for us to find a place with the most comprehensive mix of regional roundtables, useful and impactful break-outs and entertaining and (much needed) levity-injecting social gatherings.

This fall’s SIG was record-breaking in terms of attendance and (to us). This is not surprising given the vast array of subjects and thought leadership we’ve all benefited from receiving.  We look forward to the continued development of even broader and deeper category and domain expertise.  We look forward to leveraging the ever-growing “Resource Library”, where we can share the various tools of the trade.  Finally, we look forward to the local and regional roundtables where this kind of thought leadership can make a more immediate and localized impact to what we do.

- Dan Roehrs (Vice President, Business Development)

Companies are looking for cost-effective and innovative procurement strategies

HCMWorks participated in last week’s Fall 2011 SIG Summit in Bellevue, WA.  For those of the HCMWorks followers who were unable to attend the Summit or for those of you who are not a member of SIG, here is a brief recap of the week’s events.

• Record Attendance for SIG Conferences. 
  • 400+ Senior Level procurement professionals
• Tremendous Keynote speaking from:
  • University of Tennessee – Center for Executive Education
    • 5 Rules That Will Transform Outsourcing
  • Microsoft – Fireside Chat with Microsoft’s CPO
    • How Fortune 500 Procurement Strategies effect bottom-line results
• Pike’s Place Fish market provided a demonstration of their famous fish throwing skills, but tied it all together into a culture and business success story
• Technology sophistication. SIG launched the SIG APP, which enabled all participants to have instant access to the day’s events, with immediate updates via twitter and reminder
• 38 Workshop sessions on procurement thought leadership
  • Indirect Procurement Outsourcing
  • Strategic Procurement
  • Workforce Management for Procurement Professionals
• Executive Roundtable
• No Vendor Gauntlet to run!  SIG is a non-commercial organization that provides networking opportunities for buyers and suppliers without the pressure of being sold.

Economic Indicator?

In summary, the summit on a whole was outstanding.  There was a buzz in the air that I have not sensed in some time.  Do I think it is an indicator of a strengthening economy?  I’m not sure I’m ready to go that far, but what it did tell me was that there is pent up demand in the procurement industry for cost effective and innovative ways to make a rapid impact on an organizations bottom line.  However, it was also clear that this is not only about savings, it’s about balance in service, delivery and savings.  Maybe we’ve seen the end of “squeeze the vendor” and beginning to see real partnership lead value.

For more thought leadership ideas on ”beginning real partnership lead value”, download our whitepaper “Collaborating with Suppliers to Create New Value“.

A recent article in Canada’s Globe & Mail titled,Temp staffing agency seeks better feedback on workers’ performance, (link to Article) helps our clients and others to better understand the value proposition of the tools and programs MSP’s support and their value to our client’s which also includes our supply base.  No supplier wants  a “hunting license” which might be better classified as the reward of a contract that never results in business.  Your suppliers also don’t want a relationship that provides inadequate feedback.

There are few service companies that can expand their business if they can’t improve on the services they are providing today. Your service suppliers’  performance tomorrow has to do with feedback they receive today.  In the case of contract employees that feedback is based on the performance of the resources that the staffing providers of contingent labor have on contract. As in the case of statement of work (SoW) based mandates we often see the lack of feedback often results in poor performance, as a resulted in costly overruns with extensions and/or missed timelines.  Sometimes that has to do with business awarded based on performance, and sometimes the extension has to do with missed timelines. The difference between the two enables us to either reward additional business or terminate a contract and that decision is based on clear, timely and accurate feedback.  The good news is that in our programs our client’s and our suppliers understand this and in return we see a meaningful increase in quality performance.

Client driven performance reviews are powerful.  It makes for more effective and successful supplier-partner relationships. The key is to have a program that provides with that insight across multiple categories.  What is critical to facilitate this is technology that effectively captures that feedback and a program that ensures that someone is monitoring the submission of that feedback. Not just on one mandate but on all the participants in a MSP program.

Are there opportunities in your supplier management programs to get better results? Read “Collaborating With Suppliers to Create New Value” and learn more now!”

As seen in today’s PR news from HCM & Emptoris, Bell Canada continues to be a leader in progressing the better management of complex indirect services.  This is a continuance in the position that the often overlooked opportunity to better manage complex services is well within any large corporations procurement strategies.

The results and ROI support that an enterprise approach to indirect procurement services can yield significant and rapid returns.  Bell Canada embarked on this journey in early 2005 when market pressures pushed them into an aggressive cost cutting mode.  The returns over the past several years have been outstanding for the company and it’s shareholders as this program has progressed to well over 10X the size of its original scope and is now one of the leading indirect programs globally.

The combination of procurement implementation, adoption and sustainability expertise coupled with the proper P2P functionality can bring a company unparalelled success. We actually are bold enough to state that this could be “the” most beneficial program companies can do in a rough economy.

V2H Methodology designed and built by HCMWorks continues to demonstrate it’s repeatable benefits.  To learn more about the Bell Canada/HCMWorks story attend this October’s Fall SIG Summit where HCMWorks and Bell Canada will be speaking on how this program has become a huge success for the industry.  Or, visit our white paper and executive video series to read and hear what the market is saying.