Provade Perspectives

“Enable VMS to do True Workforce Management” HR.com Webinar Recap

Thu, 16 Feb 2012 17:43:00 GMT

I recently had the opportunity to host an HR.com webinar to show how VMS can be enabled to do true workforce management beyond just spend management. With third party labor comprising now almost half the workforce, VMS is a critical tool to help manage this workforce. It’s important to know who is in your enterprise and to make sound business decisions for long-term tenure use. Make sure to see the whole picture – the total workforce.

In the webinar, I discussed the following VMS solutions, including:

Identity management
Tenure management
On/Off boarding and provisioning/de-provisioning
Compliance and audit of all third party workforce
Total workforce visibility

Watch an archive of the webinar here.

Musings on Oracle World Domination…and the Taleo Acquisition

Mon, 13 Feb 2012 18:32:00 GMT

By Edward Jackson, President

Larry Ellison stated that Oracle was slowing down on M&A a year ago. At the time, he made the remark of SaaS that “If you look at the leader, Salesforce.com, they don’t make very much money and they’ve been at it for almost 10 years.” Now enter Taleo acquisition yesterday which is very much a poster board SaaS company and cited in most SaaS company benchmarks. One quick reaction is this is simply a “me too” response to SAP’s acquisition of SuccessFactors. However, I think it a combination of both a need to respond to SAP’s bold move as well as a growing acceptance (…and acquisition) of cloud/SaaS based companies. It is a new era in the M&A tent at Oracle for sure.

For us at Provade, we see a strong opportunity to continue our all Oracle focus. Oracle’s acquisition of Taleo not only strengthens the ‘red’ stack offering, but makes it a dominant player particularly when combined with its other HCM offerings such as iRecruit (eBusiness Suite) and Talent Management (PeopleSoft). This acquisition should make Oracle THE dominant ATS and recruiting provider in the market place.

Here at Provade, we look forward to extending integrations into Taleo and supporting our Oracle based customers on such. It has long been my belief that the poor man versions of ATS/Recruiting that exist in some of the VMS tools would never be a match to Taleo. With Oracle’s acquisition of Taleo, it is hard to debate the utility of inferior functionality vis a vis the leading tool in the market with the might and backing of Oracle. We look forward to the close of the transaction this summer and the deeper ties that will bring with our Oracle product partnership and this exciting new acquisition.

Change Orders: Why Closed-Loop is the Way to Go

Thu, 26 Jan 2012 19:04:00 GMT

By Peter Parks, Vice President of Product Management

When implementing a VMS one of the key considerations is whether to integrate. This is not as simple as, “should we integrate?,” but rather a series of questions – should we integrate with HR, should we do SSO, should we integrate POs, PPM, etc.

The question that gets the most attention is typically PO integration. It is often billed as a silver bullet, delivering efficiency and control. But as with many sales pitches, there is much more to the story.

All mature procurement systems (Oracle, PeopleSoft, JDE, SAP, Ariba, Coupa, etc.) support a standard for PO integration. The most common, Punch-out/cXML, is typical in the functionality it offers. From a user accessing the VMS through SSO through the end process of a PO being created and dispatched back to the VMS. Shazam! Mr. Customer, you now have total control over spend because your procurement system and the VMS are in lock step. And the best part is that the VMS will ensure there is no overbilling. And that’s where the story typically ends.

However, when procuring services, the story does not end there. Does this sound familiar?

Two months after a contractor’s assignment begins, the contractor receives a raise or is extended and a change order is required.

If your PO integration ended with the dispatch, then let the games begin. In the best case scenario the VMS has been configured with sufficient alerts to inform the hiring manager and supplier that the assignment is approaching its scheduled end or that the funds are nearing full consumption. Even with those helpful reminders in place, there is still a manual process required to get the extension processed.

In an ideal environment, the process begins in the VMS because it has all of the data and logic to guide the hiring manager to an appropriate extension amount based on the bill rate and duration of the assignment (back to that efficiency and control idea).

In practice however, it often begins with the hiring manager going straight to the system he knows actually controls spending authority – his own procurement system. Unaided by the guidance the VMS provides, the hiring manager takes a stab at how much more funding he will need to complete the assignment. When the extension is approved there is typically no notification sent to the VMS or MSP. And if the extension is approved for less than the actual cost, what is adjusted in the VMS? Either way, you are going to run out of something – time or money.

On the flip side, if you extend for the true duration and amount then you are in danger of overbilling. The result is always the same – a tremendous amount of manual reconciliation, emails and phone calls, some overbilling and overall discontent with the process and the system.

It does not have to be this way! These issues can be alleviated with the integrated change order. Depending on the procurement system, there can be several ways of accomplishing it: re-punch-out, supplier-initiated changes or messaging. The key to an integrated change order is to utilize the VMS to build the change order because it is the VMS that contains the logic to do an accurate projection of the cost of an extension.

Initiating changes in the VMS also enables the VMS to submit a change request to the customer’s procurement system, only when it results in a request for increased funding. It also drives a more consistent experience for the hiring manager - there is only one system to go to for all services spend, whether new or extended.

True nirvana in VMS integrations is a fully integrated change order. The hard and soft savings to the customer and the MSP are significant, leaving more resources and energy to focus on the elements of the program that drive true excellence.

Enable VMS to do True Workforce Management - Webinar Announcement

Thu, 19 Jan 2012 15:16:00 GMT

On Tuesday January 31, Provade's President Edward Jackson will be presenting a webinar with HR.com titled "Enabling VMS to do true workforce management."

Many HR managers know of VMS as a system to help procure and manage contingent labor. Typically, the 'manage' part is usually spend management focused and tends to be the common key driver of a Procurement organizations initiative to utilize a VMS tool. However, VMS offers significant opportunities for HR beyond spend management benefits including:

• Identity management

• Tenure management

• On/Off boarding and provisioning/de-provisioning

• Compliance and audit of all third party workforce

• Total workforce visibility

With contingent labor going from less than 5% of the enterprise workforce fifteen years ago to being an average of 50% of the enterprise workforce within the next five years, HR can take a leadership role in utilizing VMS tools beyond spend management needs.

If you are already a member of HR.com, please login to register for the webcast. If you are not a member of HR.com, you will need to sign up for a FREE HR.com membership, this will only take you a moment to fill in the required information. Once you have confirmation of your membership, you will be able to register for this complimentary webcast.

Learn more about the webinar and register today by visiting HR.com.

Benefits of the Single Stack – Part 2

Mon, 14 Nov 2011 17:44:00 GMT

By Peter Parks, Vice President of Product Management

In the world of VMS there are no viable off-the-shelf ERP options. Companies must either do a costly customized implementation or go to a SaaS provider, causing deviation from the best practice of a single stack. As the world moves toward the cloud, the ideal arrangement would be a SaaS provider whose infrastructure mirrors your own. It is widely accepted that there is parity among the major VMS players on the end-to-end functionality (req-to-check). This means that differentiation – true advantage – will be found elsewhere. For a SaaS provider, that elsewhere is in their ability to seamlessly integrate into your own stack.

Beginning with single sign-on, through sharing of control data (departments, locations, project/activity breakdown, workflow and hierarchy) and collaborative business processes, it is your VMS provider’s ability to be one with your systems that will drive true value. Utilization of web services will enable you to maintain ownership of master data while realizing the full benefit of its use in the services procurement process. But the effectiveness and efficiency of those web services will be heavily impacted by the system with which you are interacting. The less your VMS has to transform and interpret your data and its structure/format, the more beneficial those integrations will be.

And it is your VMS provider’s fundamental knowledge of your systems that will enable them to craft the most efficient and interactive integration scenario. If they are maintaining the same applications, they will be much more capable of implementing a solution that truly compliments your infrastructure and makes the most of every module, from end-to-end.

A logical next step for our industry will be the development of stack-specific VMS offerings. Whether you are running Oracle or SAP, look for the VMS that can seamlessly interact with your own systems, thus driving efficiency and greatly reducing maintenance costs on a recurring basis. Look for the provider whose own resources have implemented the very same Purchasing, HR, Projects, Financials and Business Intelligence you are running internally, not just once but multiple times. Build on your investment rather than try to bolt onto it.

It is understandable that companies get into the situation of hosting disparate components internally. You can’t always take the time to merge business units onto a single platform when consummating a merger. But when selecting a VMS you always have the time to make the right selection.

When there is a compatible option, go with it.

Benefits of the Single Stack – Part 1

Tue, 01 Nov 2011 16:57:00 GMT

By Peter Parks, Vice President of Product Management

When an enterprise invests in technology, the ideal situation is to take a holistic approach. The “dream” scenario would include the foresight to implement a leading ERP that could address your business needs end-to-end. From employee portals to Procurement/Purchasing, HR, Projects, Financials and Business Intelligence, a single system that is natively integrated would provide significant benefits, including:

Ease of use:
- Employees have a consistent user experience as they perform tasks, update profiles, make purchases and do their daily work. No longer will they suffer from the disorientation of jumping from one solution to another.

Reduced cost:
- Efforts to integrate disparate systems are eliminated.
- On-going maintenance is greatly reduced. Upgrades can be done more efficiently when working on a single platform.
- By making a bulk purchase, the enterprise realizes a volume discount rather than buying separately and paying a premium on each purchase.

Greater flexibility:
- Features in one module are often dependent on an adjoining module. Cross-component features are designed by the vendor with the assumption that the customer will be using a single stack. The single stack approach empowers you to leverage the maximum functionality.
Influence:
- ERP roadmaps are influenced most heavily by larger customers and those who are customers of multiple components from a single software vendor.

Sounds wonderful, does it not? Every company should be implementing a single system. But the reality is that companies grow, organically and through M&A, and have not been able to adhere to the best practice of a single stack of core applications. The typical Fortune 1000 company is not living in this technological nirvana. They often are customers to more than one of the big enterprise providers (Oracle and SAP) and have a healthy showing of medium size applications thrown in there. You will find redundancies; running Oracle Financials in the Americas and SAP Financials in EMEA, for example. No matter where you look, you find the home-grown systems – nobody can remember when they were built or by whom, and they have been in maintenance mode for years.

As enterprises continue to search for opportunities to reduce costs and drive efficiencies, more and more are launching initiatives to implement the single stack. The money lost by keeping dozens of disparate systems connected can be redirected to the replacement of niche tools with true enterprise components that are compatible with their primary systems. As they get closer to the unified vision, tenuous integrations are replaced by native connections across modules. Previously unusable features can be turned-on and efficiencies are gained.

Nirvana is no longer a fantasy, it is a vision on the horizon.

Looking Forward to Another Successful CWS Summit

Fri, 30 Sep 2011 16:30:00 GMT

By Edward Jackson, President

With October right around the corner, the Provade team is looking forward to attending SIA’s Contingent Workforce Strategies Summit in Las Vegas, NV. This year’s Summit focuses on the next generation of contingent work and will provide key performance indicators guaranteed to make a positive impact on contingent workforce management. We will be presenting our recommendations on getting the most out of your VMS during a roundtable discussion being held on Tuesday, October 4.

If you’re headed to the Summit, be sure to stop by our booth, #203. The Provade team – James “Jamie” Parker, Peter Parks, Kate Dyer and myself are all looking forward to meeting with you and discussing your VMS needs.

Did we mention the chance to win $1,000 in casino chips just by visiting our booth and providing us with your business card?

If you can’t join us in person, follow @Provade on Twitter for live posts during the conference.

We look forward to seeing you there!

The Case For Integrated SaaS

Thu, 28 Jul 2011 13:55:00 GMT

By Edward Jackson, President

As the demand for actionable business intelligence grows at today's leading corporations, the focus for information leaders is finding the best way to fold niche applications into their existing ERP platform. The ultimate goal is to eliminate information silos to the greatest extent possible so that executives can view their organization in a more complete, holistic way.

Cloud-based applications have clear advantages in terms of upfront costs and speed of implementation, although the thought of integrating SaaS with on-premise systems puts some CIOs in a cold sweat. Common concerns include connectivity issues and the security of sensitive business data. These are all valid considerations, although frequently the perception is a lot scarier than the reality.

A number of SaaS providers are offering technology that can be integrated "out of the box" with common ERP systems such as Oracle and SAP, eliminating the need for time-consuming interface development. Applications built on an enterprise architecture also enable many of the rich features offered by the "parent" software. Security is another key concern for information leaders, as it should be. The fact is that most large companies have their data off-site already, and their encryption and security protocols may not be as strict as those enforced by the on-demand software vendor. Often, the more questions a client will ask about a vendor's privacy and security features, the quicker it disappears as a worry.

As these issues are addressed, the benefits of cloud-based software become apparent, particularly for key administrative functions such as HR, accounting and procurement. Major companies, typically aren't ready to invest in large upfront outlays for new applications. The generally high cost of upgrades only adds to that challenge. By utilizing hardware more efficiently and charging clients based on actual use, on-demand applications help on both these fronts.

Rather than worrying about data center and equipment issues, IT personnel are freed up to do tasks that actually add value to the organization, such as improving reporting capabilities. Perhaps the quickest converts to on-demand apps are front-users, who gravitate toward the familiar feel and more intuitive layout of a web-based program.

Just because your enterprise software is on-premise doesn't mean your company has to build out its data management capabilities using that approach. Given the budgetary and workforce limitations most organizations are faced with today, the agility and value of SaaS makes a compelling case.

Contingent Labor Analytics: Turn Insights Into Actions

Mon, 30 May 2011 18:06:00 GMT

by Kate Dyer, Vice President Strategic Accounts

In a few previous blog posts I talked about the importance of defining and measuring metrics that give your organization true, actionable intelligence and insights into your non-employee workforce. A VMS with strong analytics functionality will deliver the data, reports, scorecards and dashboards that provide the foundation for business intelligence, the next step is to turn those insights into action.

The typical venue in which business intelligence data is reviewed, analyzed and discussed is in a quarterly business review (QBR). One trend we are seeing, is a shift from QBR’s being focused on reviewing where the program has been, to where it needs to go.

One key component of a forward-looking strategy is to ensure you adjust the metrics and key performance indicators (KPIs) that you measure, and how you measure them. This enables you to track if/how you are meeting your objectives as they change.

Defining and measuring KPIs is a process and not a single event. As your business objectives change, the business landscape and the contingent labor market changes. One of the best strategies I have seen for managing these changes is to have a quarterly evaluation of KPI prioritization. One client uses a 20-10-2 strategy. They track 20 KPIs - 10 are the quarterly focus and 2 are the strategic priorities. The KPIs shift each quarter as their business and the market changes. The client also tracks 2-3 additional KPIs that are either a redefinition on existing KPIs or new KPIs. This approach enables the client to use the power of VMS analytics and continually adapt to their objectives. At the end of the day, they are able to turn that business intelligence into results that drive business improvement.

The take-away is implementing a best practice to consistently re-evaluate and change KPI definitions, targets and priorities to ensure delivery of the best performance, quality and cost savings results. Having a VMS that will support these changes and deliver a comprehensive suite of analytics is key to having the business intelligence data at your fingertips to take action.

MSP or Self-Managed Program: 5 Factors To Evaluate (Part 2)

Wed, 18 May 2011 16:10:00 GMT

by Peter Parks, Director of Product Strategy

In a recent blog post, MSP or Self-Managed Program: 5 Factors to Evaluate (Part 1), I provided two factors to examine when deciding to go with an MSP or self-managed program. Here are three more factors to consider:

Diversity of Requirements
How many different types of services are you procuring? A manufacturing facility with a single large location including both production and administrative may be able to function very well managing a few key suppliers. But a company with many operating units, even if relatively centralized, and a wide diversity of skill requirements (LI, admin, IT, off-shore, 1099, payroll, marketing, SOW, etc.) starts to look like an MSP candidate. Maintaining the right mix of suppliers who offer all of the skills and services you require to run your business can be daunting and requires constant attention and experience in the evolving market.

Experience
How have you traditionally managed your services suppliers? Have you maintained a limited list of suppliers, are your contracts standardized, are your end users compliant and satisfied with the performance of your program? If you can honestly answer yes to these questions, maybe the introduction of VMS technology is sufficient to realize savings and improvement. If you are not comfortable with the answers to these questions then outside help is likely necessary.

Culture
Is your company one that fosters a high degree of self service, bottom-up initiative and individual creativity (often referred to in our world as “the Wild Wild West”), or is yours an organization that has well defined guidelines and enforced reporting structures? Although an MSP may be frustrated in the Wild West, so might you if you were to attempt a self-managed program. While the MSP might not be able to achieve all of the expected savings and improvements in a more creative environment, there is value in having someone to take the brunt of the program management. In more conservative organizations there may be a greater chance for true success in self-management.

The benefits offered by MSPs are well documented and proven. But, in order to realize those benefits you must fit a certain profile. We have some large customers who very successfully self-manage. Although they have over $100 million in annual spend, they are centralized, experienced and run a program as if they were an MSP. A large, categorically diverse, dispersed program would very likely benefit from MSP involvement, but you should never make the assumption – examine your program and create your own assessment. If you choose to go with an MSP, you should ask more questions, like should the MSP also be a supplier, or do we have one global MSP or do we need the MSP involved in all of our services procurement? Do a thorough and honest assessment because this decision can make or break your program.

Contingent Labor Analytics: Metrics That Matter

Thu, 05 May 2011 15:50:00 GMT

by Kate Dyer, Vice President Strategic Accounts

Once you select a VMS system, you begin the real work of defining and implementing your approach to contingent workforce program measurement. With the right tool in place to support you as your business and the market changes, you should have a solid foundation to define and drive your business intelligence strategy.

One key factor to consider when setting targets for your key performance indicators (KPIs) and service level agreements (SLAs) is making sure you design the measurement to give you the data you need at the right level of detail.

One example of a metric that often gets over simplified in how it’s measured is “Time to Fill.” We often joke that if you ask 5 people how this KPI should be measured you will get 6 answers. In some ways this is as it should be because it is so dependent on business process. In most cases defining “time to fill” as the time from when the manager creates a requisition, to the time that the requisition is filled, does not give clients enough details to identify areas for improvement.

In one situation, we had a client see an increase in their “time to fill” but they were struggling to determine the issue. During the economic downturn, they added several levels of approval to the requisition and this was not being included in the measurement. We fixed the issue by breaking down how they measured “time to fill” from requisition creation to approval, from vendor receipt to submittal and time from submittal to fill. This provided the client with the tools to understand:

How long their approval process was taking
How quickly their vendors were responding to requests
How long the candidate evaluation process was taking.

The client used these more detailed analytics to identify problem areas, conduct root cause analysis and make improvements.

This example demonstrates the importance of taking time to consider what and how you measure performance, to ensure you have true actionable intelligence.

For more information on deploying a strategy to provide actionable insights into your non-employee workforce, check out our new VMS Analytics white paper.

MSP or Self-Managed Program: 5 Factors To Evaluate (Part 1)

Mon, 25 Apr 2011 21:02:00 GMT

by Peter Parks, Director of Product Strategy

In a recent meeting with a prospect I was asked whether we see more self-managed programs or programs run by an MSP. The answer was quick and definite – we see more programs run by MSPs. The follow-up question could not be answered as quickly – which is better?

Conventional wisdom is that it is best to have a program run by an MSP. If one had to hazard a guess, knowing nothing about the client, this would be the answer with the best odds to be correct. There have been studies conducted that have found greater compliance, better performance and lower pricing in programs run by MSPs. But it is not always true. What determines which way to go? Here are two primary factors you should examine if you are not sure whether to go MSP or self-managed.

Spend
A simple place to begin is the amount of spend your program does, or should, have running through it. There is not a magic number, but the smaller the total spend, the less likely there are multiple complicating factors. A program with minimal spend (let’s just say less than $10 million annual throughput) is not very likely to be global or have a wide variety of labor categories. If your program is relatively small, all in one country and only includes a few categories of labor, then you need to ask yourself what true value an MSP would offer. Preferential pricing can be achieved by reducing the number of vendors, but keeping more than one can keep just enough competition to drive performance.

Geographical Dispersal
Is your organization highly centralized or spread-out? When all of your services procurement occurs in a single, or very limited number of locations your ability to effectively self-manage increases. If you have many production facilities and sales offices spread across the country or multiple countries, you could benefit from a large national or multi-national MSP who can monitor fulfillment and supplier performance and through their own network of offices might act as a supplier as well.

Stay tuned for three additional factors you should examine if you are not sure whether to go MSP or self-managed.

VMS Custom Fields for Contingent Workforce Management

Tue, 29 Mar 2011 15:25:00 GMT

by Peter Parks, Director of Product Strategy

Anyone with experience in the MSP/VMS field has strong opinions on customer-defined fields, also known as custom fields. I count myself among that crowd. My opinion is that not only are custom fields overrated, they are disruptive and misused. The opposition might suggest that more data is, by definition, better; the more data you can cram into the requisition / candidate submittal / work order, etc., the happier everyone will be. But I have seen deployments where literally dozens of (in the worst case 167) superfluous and confusing custom fields have been thrown at the poor hiring manager who just wants to request an administrative assistant.

One of my guiding principles in developing our Provade VMS solution and configuring it to meet customer needs is to ensure that the user is presented only with data and options that are truly relevant to the transaction. When creating a requisition the hiring manager should be asked only for information that will enable the suppliers to identify the most suitable candidates and to drive accurate invoicing and reporting. All VMS solutions deliver the core data to accomplish these goals: what is the job, how many people, when are they needed, what am I going to pay, etc.

However, it is a tendency of sales, and even implementation, personnel at MSP and VMS providers to agree to the customer’s requests during the design phase to throw into the mix every imaginable piece of information. The result is often a dizzying array of drop-downs, radio buttons, free-form text and God only knows what else, that bloats the forms and process rendering it almost usable. The pain is often inflicted upon not only the hiring manager but the suppliers as well.

To achieve the intended outcomes and increase usability, VMS and MSP providers can be more proactive in counseling their customers through this process and customers can focus more on usability. Perhaps this could include adding an approval process into the implementation that requires any deviation from the delivered fields to a pass a rigorous review by key stakeholders: Procurement, HR, AP, the MSP and the most frequent users (this last group may be the most important). Set the bar high. Only allow an additional field to be added if its absence will prevent proper billing, on-boarding or another mission-critical function.

There is definitely a place for customer-specific fields. Most often this data is invoice related: things like department, project, activity, GL unit, etc. Anyone contemplating a VMS deployment would be well served to follow the less-is-more approach and stick to the basics, deviating only where the process will break-down without that extra fact or figure. My experience shows that this will result in effective automation and measurement of your contingent workforce program, while ensuring a high level of end-user adoption and satisfaction.

Contingent Labor Analytics: 7 VMS Questions to Ask

Mon, 14 Mar 2011 21:35:00 GMT

by Kate Dyer, Vice President Strategic Accounts

A key reason for implementing a Vendor Management System (VMS) is to gain visibility to information about contingent labor and/or SOW spend. And as programs evolve, buyers expect to analyze their metrics so they can adjust their approach and improve their results.

So how can you best anticipate your contingent program measurement needs during your evaluation process? You need to consider your measurement goals, the data required to achieve them, and the functional requirements of the technology.

Providers will show off their reporting technology bells and whistles during demos and in their materials. They look great – but can they deliver?

To get you started, here are seven questions to ask in a VMS Analytics demo:

How does the VMS provide a snapshot of current state versus goals?
How does the VMS provide flexibility to configure the measurement of key performance indicators or service level agreements as you calculate them?
How does the VMS provide the ability to adapt to changes in measurements over time?
How easy is it for end users to understand the reports?
How does the VMS provide the facility for all suppliers/vendors to run their own reports to proactively track their progress against their SLAs/KPIs and other contract commitments?
How does the analytics engine allow you to act on the information?
How does the system tailor the reporting experience to individual users and user types?

Once you understand how the VMS system handles these functional requirements, you can begin the real work of defining and implementing your approach to contingent workforce program measurement. With the right tool in place to support you as your business and the market changes, you should have a solid foundation to provide the business intelligence to drive your success both now and in the future.

To learn more about contract talent analytics and reporting, join Provade and Bryan Pena, Vice President Contingent Workforce Strategy and Research for Staffing Industry Analysts on the upcoming Human Capital Institute Webinar: Putting the Contingent Workforce Under The Microscope.

Vendor Management Systems, Kitchen Knives, and Screwdrivers

Thu, 24 Feb 2011 19:42:00 GMT

By Peter Parks, Director Product Strategy

We are looking at implementing a significant program with a prospect; about $300 million in traditional contingent labor with much more in IT and off-shore spend. As you can imagine, for an opportunity like this we are always willing to go the extra mile.

But a funny thing came up in our last meeting, and it’s something I have encountered many times before. A few members of the prospect’s team starting talking about all of the additional things they plan to accomplish with our system – things that don’t really fit into the mold of a VMS: managing expenses for their FTEs, tracking on- and off-boarding for resources who are not billing through the system and leveraging our analytics for enterprise-wide reporting. I understand their thinking; this is a powerful system, its expense module is better than the one we currently use, the reporting is out of this world, let’s use it beyond just our contingent, IT and off-shore spend.

To some it sounds like a smart thing to do – make the most of the system. But invariably, when you try to use a tool for something other than its designed purpose there will be issues. Ever use a kitchen knife as a screwdriver? It might work to get the battery compartment open on your kid’s toy, but often you bend the knife, strip the screw, or both. And good luck putting-up drywall with it. Just walk to the garage and get a screwdriver.

VMS systems are the same. Great effort has been put into their design, with specific ends in mind. Sure, Provade has genuine enterprise expense functionality built into our system. But in order to enter expenses you need to have a work order, with approved budget, often tied to a PO. To use the system to capture expenses for your FTEs you need to create one-off, non-billable work orders that distort your metrics. You also need to give your employees access to the system to enter their expenses. Access is typically auto-generated for contingent workers through the work order creation process, and they are tied to a supplier. How do you deal with this? Ah, yes, a “work around”.

Interested in our wonderful integrated on- and off-boarding functionality? Of course you are, it drives efficiency and accuracy because our VMS is the system of record for your contingent workforce and all new assignments, change orders and terminations originate there. But this is because the contingent workforce fits into an end-to-end process beginning with a requisition and culminating in a work order. To try to fit resources who are not in scope of the contingent workforce program into demands work arounds and may require customization to the VMS or your own internal systems.

“Getting more” out of the VMS may seem like a way to fully leverage your investment, but it always results in a hokey process, demands work arounds and doesn’t meet your needs like another product or service would.

Ironically, most customers already own modules, built into their ERP systems, which handle these very needs. So, resist the urge, put the kitchen knife back in the drawer. Use the VMS for its intended purpose and you will get the most out of your investment, and turn-on those ERP expense and on-boarding modules – you may be surprised how well they work.

Implementing VMS for Contingent Workers: Big Bang or Phased Approach?

Tue, 18 Jan 2011 14:18:00 GMT

Peter Parks, Director Product Strategy

At the 2010 CWS Summit, we heard from large, blue-chip companies on panels that a ‘big bang’ approach to implementing a contingent workforce strategy is best. But based on my interaction with people every day in the field, it is clear that this philosophy has yet to work its way into the mainstream of organizations considering implementing VMS and/or MSP programs.

Based on my experience, here are some of the factors that often influence customers’ decisions on which route to take.

Integrations Overpromised and Under Delivered

Some companies aim to get all spend into the program/solution in phase one and to undertake system integrations in a second phase. Reasons for this approach can include an immovable implementation deadline, highly complex integrations, or a shifting customer IT infrastructure.

There are certainly times that this approach is wise, but I have seen it used because of integration shortcomings on the part of the VMS. Nearly all VMS solutions are niche solutions, built from the ground up by the provider. This saddles the VMS (and the customer) with a high degree of effort to deliver quality, robust integrations in a timely fashion, leaving the customer with a less-than-complete solution until the integrations can be completed. It also introduces risk for the VMS/MSP because a non-integrated solution will not produce the anticipated returns that a properly integrated one would. Add to this the increased cost of integration maintenance and uneasiness about integrating a niche solution becomes more understandable.

Ownership without Authority

VMS/MSP programs are often implemented with little or weak executive sponsorship. Procurement, HR and IT are often tasked with reducing costs, enhancing process, rationalizing the supply base or driving compliance and wisely turn to a VMS/MSP program to aid in the pursuit of these goals. Whether it is because of these departments’ failure to articulate the value of their approach, or failure of executives to appreciate the potential for improvement that can come with a well-executed program, the departments can be left to deploy the program throughout the company without top-down support. In this case a phased approach is often used, getting buy-in and results in a select department or labor category, and then using this as the business case for the expansion of the program. With proper executive sponsorship this barrier to a full implementation can be removed and immediate, enterprise-wide benefit can be achieved.

So Many Projects, So Little Time

Competing initiatives can drive program sponsors toward a phased implementation. There may be the perception that a VMS/MSP implementation will demand significant internal resources that may be dedicated to other important projects, or are just fully booked with their day jobs. If you find yourself in this situation, I would suggest that you are not sufficiently prepared for a proper implementation, phased or otherwise, or that the MSP has performed insufficient preparation and is not shouldering the appropriate degree of the workload. A well-executed implementation should install a program that will make the company’s process more efficient, thereby enhancing their ability to concentrate on core competencies. With the possible exception of customer technical resources needed for a truly custom integration, other initiatives within the customer generally should not impede the VMS/MSP implementation.

Change is Good – a Little at a Time

The phrase “change management” can invoke bad memories and often makes the list of considerations when making the big bang / phased decision. While change management is critical, and often not executed well in one-off internal projects, if done properly within a VMS/MSP implementation it should be less impactful than customers anticipate. This is because the VMS and MSP have performed dozens of implementations across a variety of verticals and geographies and therefore have well-tested change management plans. Unlike a one-time implementation in which the customer must build anew a relevant and complete communication plan, training, etc. there are proven templates for VMS/MSP implementations that require fine tuning rather than building from scratch.

It’s Different Over There

Multinationals, particularly US-based companies, often pursue a phased approach to VMS implementation. Within the country of origin a big bang may be undertaken, but prudence sometimes dictates tackling each country separately. In this way, standards and best practices can be established and significant savings and improvement produced because the home country is typically the biggest consumer of services. When there is one customer team responsible for the entire global deployment, this approach may be essential to success.

These are just some of the reasons I have seen organizations choose a phased approach to their VMS/MSP implementation. As outlined above, each of these reasons can be traced back to:

Incomplete or improper planning on the part of the customer and/or MSP
Weaknesses in the VMS solution as it relates to global requirements or integrations

So… if you can overcome these deployment challenges, would you go big or use a phased approach to VMS implementation?

New Year, New Procurement Cost Savings Targets

Mon, 10 Jan 2011 19:29:00 GMT

by Kate Dyer, Vice President Strategic Accounts

If you are like most procurement and finance leaders, a new calendar and budget year also brings new cost savings targets.

Over on spendmatters.com, Jason Busch recently posted sound advice for driving cost reductions out of complex categories, including contingent labor. If you want to learn more about how to save on contingent labor and services (SOW, outsourced providers) spend, read on for target savings areas.

Tackling unmanaged services spend can yield substantial savings results. In fact, our customers generally realize 10-20% savings when implementing a Vendor Management System and Managed Service Provider (VMS and MSP) solution to manage their contingent workforce. (For industry definitions, click here.)

So how do companies save 10-20%? We benchmarked our customer base and outlined areas where they have realized cost savings in services procurement. Here are the top eight savings targets for your contingent workforce program:

Time is money. How much time does your central team spend trying to aggregate and analyze spend data on contractors and contingent workers? How much time do your end users spend working with suppliers and processing transactions?
Supplier network. How many staffing suppliers do you use across your organization? Do they compete on requisitions to deliver the best talent at the best cost?
Bill rate management. Are your labor bill rates aligned with the market? How effectively do you hold your suppliers accountable for delivering to contractual commitments?
Invoicing. How many invoices do your process? How much time do you spend reviewing, approving, and reconciling invoices for staffing and services?
Consultants. Are you correctly classifying workers to mitigate risks? Are you capturing department spend on consultants, projects, and SOWs? Are you getting the best resources for the best price and managing to agreed-upon milestones?
Rogue spend. Are hiring managers using approved suppliers? How do you ensure rate consistency for all services procured in your organization?
Supplier performance. How are your suppliers delivering against their commitments? How can you hold them accountable for their performance?
Forest for the trees. How do you analyze your spend across the entire services category throughout your organization? Are you driving continuous improvements in performance, savings, and risk management in your contingent workforce program?

There are many factors to consider when developing cost savings targets specifically for your company. But this list should help in narrowing down the target areas for consideration.

I love this stuff… so feel free to leave a comment or email kate_dyer@provade.com if you would like more information or support in building a business case for your organization.

Procurement Leader Discussions on Contingent Workforce Management

Thu, 16 Dec 2010 15:51:00 GMT

ISM Services Conference Update

By Kate Dyer, Vice President Strategic Accounts

I attended the annual Institute for Supply Management Services Conference this month in Phoenix. The theme of this year's event was “Innovative Supply Relationships: Creating Value for Services Procurement”. I had an opportunity to meet with many services procurement professionals across all industries and wanted to share what was top of mind concerning contingent workforce management in two buyer groups:

Companies without a contingent labor solution

For the companies we spoke with that did not have a comprehensive contingent labor management solution in place, most had determined that a VMS or VMS/MSP strategy was the right direction to pursue. The biggest questions they had were around how to proceed to the next step:

How to create a business case to gain executive buy-in
Establishing evaluation criteria for a VMS technology
Determining the need for an MSP solution and how to evaluate the players
How to execute a thorough, but targeted and cost effective RFP process

Companies with a contingent labor strategy

For the companies that did have a contingent labor management strategy, they were looking at how to strengthen and expand their program, add or enhance their VMS technology enablement and most of all look to bring in other categories of labor under strategic management. These companies were specifically interested in:

How to move from a preferred vendor to an MSP model with a strong VMS foundation
How to add a VMS technology solution to their existing preferred supplier, master vendor or MSP management solution
How to move from a limited scope MSP for time and materials labor to a comprehensive contingent workforce outsourced management model enabled by a VMS technology

For this last point in particular, we had some very good conversations with buyers looking for ways to manage not only their time and materials spend, but to expand to Statement of Work/ Project/ Deliverables based spend. We published a Services Procurement Toolkit for this conference that addressed the service model and technology solution considerations along with benefits and savings for including the SOW spend category under strategic management. This content was well received and generated great questions and conversations with the conference attendees.

I got a lot out of all of the presentations throughout the conference, but there were two that really hit home with me:

Debbie Beavin, CPO of Humana presented on the power of Six Sigma in Procurement. I was impressed with the process and rigor that the Humana organization put around continuous process improvement. She not only outlined best practices, but laid out great case studies on real life examples that delivered value to her organization. At Provade, we live by this methodology everyday in terms of our service delivery and extension of our value, and it was great to hear about their approach in a broader context.

Kate Vitasek is faculty at the University of Tennessee in the Center of Executive Education and presented “Vested Outsourcing: 5 Rules that will Transform Outsourcing.” This presentation was taken from her book of the same title. Her entire presentation was forward thinking and very educational. The Pricing/ Value approach she discussed is very relevant to Contingent Labor Outsourcing :

Buying results instead of tasks or activities with incentives toward innovation
Using incentives to achieve mutual “trade-ups” vs. conventional cost/ service tradeoffs
Focus on outcome based vs. transaction based business models (What NOT the How)

I believe the VMS and MSP industries can learn from this and adopt “what not how” value measurement recommendations, risk and reward re-evaluation and overall technology and service success measurement frameworks.

Overall, I found the ISM conference a great opportunity to network with services procurement professionals from a broad range of industries. I look forward to applying these ideas to my customer engagements and to attending the event again next year.

A step by step guide for saving on project-based services procurement

Thu, 02 Dec 2010 14:40:00 GMT

By Kate Dyer, Strategic Accounts

As a marketer, I am accustomed to identifying marketing agencies and vendors that can meet my needs for outsourced and specialized projects and campaign execution. I am used to structuring the expectations for deliverables and negotiating pricing. I have relationships with providers I trust to meet my needs.

I involve Procurement to document what has already been agreed via email and Statement of Work (SOW) drafts or help to facilitate an RFP. I count on them to ensure we have the appropriate legal documentation in place to protect the company. If Procurement told me they wanted to get involved in identifying marketing agencies and structuring pricing, I would be skeptical about the value they could add to that part of the process.

But… recent economic conditions have forced me to be more cost-conscious than ever. And I am always stretching to find creative ways to do more with less. So if it could take cost out of the business – and out of my budget specifically – I think I could reconsider how I manage my external service suppliers. Even better if my trusted providers can be creative in submitting proposals and delivering high-quality service.

Marketing is one functional area that spends a significant amount of their budget on project-based services. (And we would always like to spend more!) Think about the spend in the service category for all of the support functions in your business – from legal to IT to finance, they all use outside providers to get work done. Much of the work is done via SOW to avoid headcount limits or tenure rules, or because the supplier/consultant/agency insists on this model because they can be less transparent with pricing, or because it’s faster and easier to execute this type of paperwork and circumvent your contingent labor process. So the process is often inefficient and expensive.

My colleague Peter recently blogged about SOW best practices and leveraging Vendor Management Systems (VMS) to standardize the process, improve quality and generate cost savings (here and here). Inspired by his posts and how Provade VMS has helped our customers take cost out of their services spend, I did some research and packaged a toolkit to help you get started in managing your SOW spend. It takes into account the stakeholders (like those pesky marketing people) you will need to win over in order to make your initiative successful… offering tips and advice for every step of the process. You can access the toolkit here.

So, download the document and get thinking. Then get started. Leave comments under this post - I would appreciate your feedback!

Look under the hood: enterprise-class VMS vs. the other guys

Wed, 17 Nov 2010 21:49:00 GMT

By Peter Parks, Director Product Strategy

In the contingent workforce management and Vendor Management System (VMS) industry, we hear the word “enterprise” used a lot these days. And it has different meanings depending on the context.

The reason for its popularity is clear – the primary VMS target customer is a large, often multi-national enterprise and in order to appeal to their sense of size and strength VMS players identify themselves as providing “enterprise solutions”.

Mega corporations all manage their businesses on Enterprise Resource Planning (ERP) platforms. In the 1990’s, these companies made substantial transformative investments to implement ERP systems to run back office operations. This was a major architecture change from main frame and internal IT systems to a single vendor enterprise platform.

Today, major corporations would never entrust their critical business processes to niche, or boutique software packages. These companies invested tens to hundreds of millions in their ERP infrastructure, which delivers the technical foundation required to support the procurement, HR and financial activities required to run the business. And it is not a static foundation; it is forever evolving through regulatory changes and new market realities. The foundation consists of labyrinthine matrices of languages, taxes, wage and bill structures, overlapping hierarchies, mission-critical security and permission logic and workflows. This technical foundation is precisely what makes ERP platforms invaluable to large corporations, the same corporations who are ideal targets for VMS solutions.

The major ERP providers spend untold millions every year maintaining their systems, testing integrations across platforms and generally ensuring the safety of their customers’ data and their compliance to regulatory requirements. So, why would these companies, so rightfully concerned with compliance and security, be willing to entrust what is typically their single largest category of spend (services) to anything other than a true enterprise-class system, complete with that critical foundation?

Effectively managing services spend requires significant customization and in-house expertise that few companies possess. So going it alone is not a cost-competitive option. And since the expectation was that the multi-million dollar investments made in ERP infrastructure would support these businesses for the following two decades, new software capabilities need to be aligned as extensions to those investments.

Here comes the shameless self-promotion…

Provade VMS is the only truly enterprise-class SaaS VMS solution available today. (And it can, of course, be used enterprise-wide!) Built on the Oracle platform (not just running on an Oracle database), Provade brings to bear all of the elements of the enterprise foundation that are so critical to our customers and their security.

So, kick the tires and look under the hood. As you are evaluating your VMS options, ask providers what they mean when they say “enterprise.” Ask them about their architecture and security. Ask them how they stay up to date on all of the compliance and regulatory requirements. And get the clarity you need to make the best decision for your business.

Want to learn more? Click here for Jason Ezratty's discussion on ERP and VMS in CWS 30.

Creating a Business Case for VMS and MSP: 10 Key Questions

Thu, 11 Nov 2010 21:56:00 GMT

By Kate Dyer, Vice President Strategic Accounts

I recently consulted with several clients that needed assistance creating a contingent labor management business case to present to their internal executives and stakeholders. These clients were exploring a Vendor Management System (VMS) solution with the possible addition of a Managed Services Program (MSP) to track, manage and report on contingent labor utilization and spend.

In my experience, one of the most important and challenging aspects of preparing a good business case is articulating the problem statement.

Here are 10 key questions to use as a starting point to identify the challenges and opportunities as input to your contingent labor management business case:

How much does our organization spend on contingent labor (temporary resources and SOW contractors)? Who is purchasing the services, where are they in the organization and what was the business need?
What is our process for managing the contingent labor lifecycle (requisition to check)?
Who is responsible for managing the contingent labor lifecycle and what are their responsibilities? How many resources are dedicated to the process?
What technology supports our contingent labor process (requisition to check)? What applications are utilized internally for this process (HRIS, Identity Management, AP, Project Tracking, Procurement etc…) and how does data get input into these systems?
How does our methodology vary for how to requisition, track and manage contingent labor across and within each Region/Business Unit?
How do we optimize our spend and manage to cost savings targets?
How do we benchmark rates to ensure we are paying at the market average? Do we have a process to hold suppliers to these rate targets?
How do we measure and drive supplier performance, rate optimization and compliance?
How do we manage and mitigate risks?
How do we look at contingent labor utilization trends to assist with better forecasting?

Contingent labor is a complex category to manage with many stakeholders, goals and measures for success. Working together with your cross-functional team to build your problem statement and build your business case will help create alignment and set you up to succeed in your change effort.

Check back soon for strategies on how to quantify these impacts and build a cost savings story for your business case. Or, if you have already built your business case and would like input on evaluating your Vendor Management System (VMS) options, check out the Provade Evaluation Checklist here.

SOWs: Get More from your VMS (Part 2)

Wed, 03 Nov 2010 13:51:00 GMT

By Peter Parks, Director Product Strategy

In my last post, I discussed some of the reasons SOW spend is often a second-tier priority in contingent workforce programs. Here, I want to cover the opportunities companies have to apply best practices to their services spend.

Think about adding visibility and audit trails to competitive bidding among suppliers. Take that to the next level and allow suppliers to deliver innovative solutions that can save your organization time and money.

Most companies have limited or no visibility into how their SOWs are constructed. Project managers are pre-defining the deliverables, setting the price and selecting the supplier.

Imagine a program in which:

Suppliers are vetted for their capabilities, certifications and pricing and tracked against SLAs.
Your organization leverages a central supply base across multiple departments, operating companies and disciplines and by doing so you achieve volume discounts.
You engage multiple suppliers on every bid and they know they are competing.
You enable and encourage your project managers to negotiate.
Project managers receive multiple proposals from each supplier, sharing best practices from their own customers – often your competitors – on how to best execute a project (a true best practice).
Supplemental resources such as your procurement and legal departments are incorporated into the process at the points where they add essential value.
You have a robust analytics engine that enables you to track negotiation, ensure SLAs are being met, track project progress and billing and identify misclassified resources.

Just getting spend into the system will continue to yield minimal returns for most programs. With proper planning, VMS users can repeat the revolution that has improved contingent workforce management and take savings to a level never before seen. How much are you leaving on the table?

SOWs: Get More from your VMS (Part 1)

Wed, 27 Oct 2010 15:06:00 GMT

By Peter Parks, Director Product Strategy

One of, if not the, hottest topics in the VMS / MSP world is SOW (“Services Procurement” or “Projects”). (Click here for definitions.) It appears to me that the primary driver for the excitement is the considerable spend in this category. Customers and providers recognize that it is like “leaving money on the table” to implement a VMS technology and leave a significant share of your services spend outside the system.

So, we are starting to see more companies incorporating services procurement / SOW spend into their MSP or VMS program. But too often the vision is limited to getting the spend into the system. Unlike the traditional contingent workforce process, where over a decade of focus has resulted in best practices, process improvement and innovation, SOW spend remains largely a sacred cow, not an area where innovation is welcome or even allowed.

When planning to introduce SOW into a program, companies often document precisely how the process is run today and send it to their providers with the message, “call us when you have enabled this exact process in the technology and program”. In most cases, this is not one process but a lengthy list of processes by department, or even down to the individual project manager level.

Why do organizations fail to apply the same scrutiny to the existing SOW processes that they routinely apply to their own contingent or T&M (time and materials) spend? A few reasons I have experienced are:

The user communities in SOW and traditional contingent workforce do not overlap.
The programs are often initiated by stakeholders primarily responsible for contingent spend only.
SOW has been a “black box” and has developed an almost mystical reputation; “their processes are so complex and so specialized – they do things in there that no one else understands”.

Well, it is possible to review SOW spend before it is introduced into the program and apply the same examination of process, supply base, rates and best practice to be performed across the board. Instead of using your VMS as a repository for deals that have already been struck through the mystical process, use it as the tool it is designed to be used. In my next post in this series, I’ll share some practical ways for you to stop leaving money on the table and inprove your services procurement process.

Anticipating a Successful CWS Summit

Fri, 15 Oct 2010 21:40:00 GMT

By Kate Dyer, Strategic Accounts

It will be my first time attending the summit and I’m looking forward to putting faces with voices and names, meeting many in person for the first time since I joined Provade six months ago. It’s an event sure to be packed with networking and education opportunities with contingent workforce experts – and some fun too!

As the head of Marketing, I’ve been working hard to find ways to make the most of our sponsorship and stand apart. Our approach is more about substance than sizzle, so we’re sharing news and sharing knowledge:

We have a great product and amazing people, and we’re adding to our talent roster. James “Jamie” Parker just joined as our Senior Vice President of Sales and will be part of the Provade leadership team at CWS Summit in Denver.
We’re helping buyers evaluate VMS options and create (or validate) their contingent workforce program direction. A Provade team of industry experts – with deep ERP, MSP, staffing and VMS backgrounds worked to package a mini-version of the consulting we often provide to new prospects. The result is Provade’s interactive VMS Evaluation Checklist. Check it out at www.provade.com/checklist.
Let’s connect. The Provade team - Edward “EJ” Jackson, James “Jamie” Parker, Bob Lucas and I will be in Booth #16. Stop by for some conversation, treats, and chance to win an iPad. If you can’t join us in person, follow @Provade on Twitter for live posts during the conference.

Hope to see you at the Summit!

Reflections on the VMS Session at 2010 SIA Healthcare Summit

Mon, 27 Sep 2010 20:16:00 GMT

VMS is here to stay, what do we do about it?

By Edward Jackson, President

I was flattered to be a guest panelist speaking with Dana Shaw from Staffing Industry Analysts (SIA) about VMS at the recent SIA Healthcare Summit in Chicago. Since Provade doesn’t have a wide presence in the Healthcare industry, my comments applied to the market in general.

The Summit attendees were mostly staffing companies that provide talent to the healthcare industry. They had questions on VMS that were wide-ranging. On the whole, though, it was clear that the audience was not familiar with the differences between MSP and VMS.

It brought back memories from the SIA Summit in 2003 when almost everyone thought that VMS and MSP were one in the same. The questions ranged from “why don’t you allow us to talk directly to our end users?” to “how do you determine the mark-ups/bill rates?” We had a good dialog about the role and responsibilities of VMS and MSP providers. I hope that the discussion helped the participants think about how best to engage and succeed in staffing for managed programs.

It was a good reminder that while VMS tools have been around for over 10 years, we still have a long way to go in defining not only our marketplace but our value proposition to our partners, customers, and suppliers. We owe it to ourselves to be better at educating those stakeholders so that they can get more value out of both the program and the software.

P.S. Staffing Industry Analysts has published a great lexicon on all contingent workforce management terms – including VMS and MSP. You can check it out here.