Last week, I shared my top Five challenges that had been presented to me, while delivering Services Procurement into an External Workforce Program and on-boarding them onto a Vendor Management System (VMS).

Now, I am going to share some little nuggets, on how I dealt with those challenges, starting with number five. “I’m not putting my Services Procurement Spend into an HR tool…”:

5. Educate:   It is called a Vendor Management System, not a HR management system 😉.

Many global multinational organisations have implemented a VMS because their ERP systems don’t provide granular details on:

a.      Bidding requirements and requesting Suppliers to highlight the work effort

b.      Bench-marking Supplier worker rates at an assigned worker level

c.      Associating workers to projects including on and off boarding activities

d.      Measuring specific milestone performance against the delivery received

4.      Show the Power:

a.      Being able to associate preferred suppliers to a specific sub-Services category.

b.      With a well-defined Services Category Strategy, certain processes can be automated, reducing the operational burden on Procurement.

c.      It can enable that sub-Services Category guidance for requestors, ensuring they are following the Procurement guidance, governance and controls

3.      Show them the Money:

I have been involved in programs, where there was so much savings, they said to change the focus to Governance and Controls 😉. Here’s where savings can come from:

a.      Bidding – I have seen many situations where clients were just sole sourcing, due to it was operationally easier. A VMS can break this monopoly right open.

b.      Triage – Identifying misclassification is one of the biggest savings opportunity areas. A triage process can help identify misclassification, and ensure the workers are being sourced through the correct channels.

c.      Bench-marking Supplier Rates across categories- Anything that has a job title and a rate card can be bench-marked.

d.      Supplier engagement – By understanding the full volume of Services and Spend a Supplier is delivering to your Organisation can support better negotiations.

2.      Reduction in operation Burden:

If your VMS has been designed properly, and not over complicated. It will bring operation efficiencies through:

a.      Automation

b.      Assigning the right person to do the right task

c.      Guiding your business through the process, limit their operation burden

d.      Centralised back-end support

However, be careful not to over-engineer the system, as complexity can reduce efficiency

And the Number 1 reason, it is not an HR tool

1.      Visibility:

Having all the information on what is really happening within a Services Category can be in your hands. Visibility, through more detailed data insights, to support better future decision making, which also will make the Services Category owner, look like a superstar!

Socrates: “The secret of change is to focus all of your energy not on fighting the old, but on building the new.”