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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HCMWorks Managing Partner named to Sourcing Interest Group (SIG) Advisory Board.

OTTAWA, ON – JANUARY 10, 2011 – HCMWorks announced today the naming of Ted Weyn to the Sourcing Interests Group’s Advisory Board.

Sourcing Interests Group (SIG), www.sig.org, is a membership organization comprised of sourcing and outsourcing professionals from Fortune 500 and Global 1000 companies, as well as the service providers and advisory firms that serve them. Members of all types are focused on advancing the sourcing/procurement and outsourcing industries by sharing best practices and thought leadership in a strictly-enforced non-commercial environment. SIG is acknowledged globally for its ability to provide a collaborative forum for networking with strategic thinkers, and sharing the latest innovations and “next” practices. The SIG Advisory Board represents some of the most globally-recognized brands in the world, including Microsoft, Johnson & Johnson, New York Life Insurance, Google, NetApp, Wells Fargo and more.

“This is a unique honor for HCMWorks”, said Ted Weyn, Managing Partner.  “We have always admired SIG as bringing together the best procurement leaders globally.  To be asked to serve on this prestigious board puts HCMWorks in with many of the industry’s elite procurement professionals.” “Additionally, we see this as a huge validation of HCMWorks’ thought leadership position in the world of indirect procurement,” Weyn added.

Weyn’s tenure will become official at SIG’s Global Sourcing Summit being held in the NY Metro area on March 27^th – 29^th. [www.sig.org/summit]  “We are delighted to welcome Ted to the SIG Advisory Board,” said Dawn Evans, SIG CEO and President. “Ted is a long-time SIG champion who has been bringing fresh insights and ideas to SIG for as long as we have known him. Ted’s unique and thoughtful perspective will provide an enormous asset to the SIG Board,” added Evans.

At last fall’s SIG Global Leadership Summit in Seattle, Dawn Evans interviewed Ted Weyn as part of the SIG Executive Interview Series. [link to video] In the video, Weyn spoke with Evans about the Indirect Procurement market and focused on certain categories that are creating unique savings opportunities for their clients. Membership in the SIG organization provides a wealth of industry best practice tools, market data and unparalleled networking.

About HCMWorks, Inc.

HCMWorks is a leading North American procurement outsourcing and advisory firm that specializes in Indirect Services Procurement.  HCMWorks helps procurement departments gain greater control over indirect service expenditures to gain a competitive advantage in their industry. Their proprietary 4-step V2H methodology provides a substantial reduction in indirect operating costs through transactional visibility, ultimately delivering an extremely rapid ROI. For more information, please visit www.hcmworks.com or call 866-547-1645.

About Sourcing Interests Group

Sourcing Interests Group (SIG), www.sig.org, is a membership organization that has served sourcing and outsourcing professionals from Fortune 500 and Global 1000 companies throughout its 20-year history. SIG is unique in that it blends practitioners, service providers and advisory firms in a non-commercial environment. Members of all types are focused on improving bottom-line performance, quality and customer service through strategic sourcing/procurement and outsourcing initiatives. SIG is acknowledged by many as a world leader in providing an ongoing forum for networking and sharing thought leadership, innovation and “next” practices. For more information visit www.sig.org or call (904) 310-9560.

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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!

HCMWorks is excited to announce their participation in a HR.com free hosted webinar titled, RPO From Procurement’s View. 

In this 60 minute presentation, Dan Roehrs of HCMWorks will, provide a procurement professional’s insight to the world of RPO (recruitment process outsourcing).  There has been a growing trend of having procurement and sourcing department oversight and/or involvement in the due diligence process of reviewing and selecting Recruitment Process Outsourcing companies.  This presentation will focus on the importance for organizations to still involve key stakeholders and business users of recruitment process oursourcing versus simply “turning over the keys” to procurement, possibly resulting in a price-only focused process.  The session will arm attendees with the knowledge on how to better work with procurement and how decision criteria affect your organization’s RPO over the short, mid and long term.  Dan will also uncover outsourcing trends in the market and touch on the future of recruitment process oursourcing.

Short Description:
In this 60 minute presentation, Dan Roehrs of HCMWorks, will provide a procurement professional’s insight to the world of recruitment oursourcing. This presentation will focus on the importance for organizations to still involve key stakeholders and business users of recruitment process oursourcing versus simply “turning over the keys” to procurement, possibly resulting in a price-only focused process.  The session will arm attendees with the knowledge on how to better work with procurement and how decision criteria affect your organization’s RPO program over the short, mid and long term.  Dan will also uncover outsourcing trends in the market and touch on the future of recruitment process oursourcing.

Who Should Participate:
VPs, Directors, Managers of Human Resource and Talent Acquisition, Procurement and Strategic Sourcing Professionals, Line of Business Executives and managers

What Will you Learn:
1)      Procurement’s perspective of RPO sourcing and evaluation and on-going management
2)      The importance of considering factors other than “price only”
3)      Outsourcing trends and market indicators

Visit HR.com to REGISTER for this informative event. This free event will take place on January 17, 2012 at 11:00 – 12:00 PM ET.

HCMWorks is excited to announce their participation in a free HR.com hosted webinar titled, Demystifying the Marketing on Vendor Neutrality.  Held January 30th at 3:00PM EDT.

In this 60 minute presentation, Ted Weyn of HCMWorks and Jeff Nugent of Contingent Workforce Solutions, will introduce the audience to the concept of Vendor Neutrality.

Although this issue is not new, Neutrality is emerging as a hot topic among Corporate HR and Procurement professionals since the lines between program management vendors and staffing vendors are blurring as the Contingent Workforce Management (CWM) industry evolves.  This presentation will focus on the History & Evolution of CWM Managed Service Providers (MSPs), the different program structures and various pricing options.  The session will also empower attendees with the knowledge on how program structures and how vendor neutrality affects your organization’s Contingent Workforce Management program over the short, mid and long term.  Ted and Jeff will also uncover the truths and myths behind what it means to be neutral and provide logical methods to ensure that all stake holders objectives are met in order to achieve success.

Visit HR.com to REGISTER for this informative event. This webinar will take place January 30, 2012 at 3:00 – 4:00 PM ET.

This position paper takes our readers through the common denominator that can assist procurement executives to play like a Rock Star.

Learn how companies like Salesforce.com and Rent-a-Center pushed aside the normal procurement “analysis to paralysis” and by taking one simple approach revolutionized their procurement organizations.

Through the use of:

1. Single Sign-on “On Ramps”
2. Listening to Business Unit Needs
3. Laser-like focus on adoption

These organizations are achieve upwards of 90% of total corprate expenditures on one single platform.  Also included, many more business examples of how Volume can result in Rock Star Status!!

 Download All Whitepapers

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. 

Dawn Evans, CEO, Sourcing Interest Group interviews Ted Weyn, Managing Partner and Co-founder of HCMWorks on the company and indirect procurement marketplace.

At this Fall’s International Procurement Summit in Seattle, WA, hosted by the Sourcing Interest Group, www.sig.org, a membership organization that has served sourcing and outsourcing professionals from Fortune 500 and Global 1000 companies throughout its 20-year history, recognized Ted Weyn, Managing Partner and Co-founder of HCMWorks by inviting him to be a part of their thought leadership video series.

Listen to this brief interview, conducted by SIG CEO, Dawn Evans, to learn more about current indirect procurement market opportunities and what HCMWorks is all about.  Viewers will also hear about the unique opportunities for the better management of 1099 workers and how to attack “sacred cow” categories like marketing, legal and consulting.