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