Elevating the Role of Procurement

Monday, March 27, 2017

Last week, I was honored to present to industry experts at the 2017 Procurement Leaders Conference. I’ll confess, though, I was taken aback when I asked participants about their role in contingent workforce management programs.

Although every single one was “involved” in their company’s CWM – whether running RFPs, negotiating contracts, and setting up vendors – none of them actually owned those programs. This continues to surprise me, because procurement is the perfect candidate to manage the talent supply chain.

Contingent workforce management’s not getting any easier

One thing’s crystal clear: connecting worker to work is a more complicated process than ever before. Purchasing labor represents a complex challenge with many moving parts and stakeholders who are often at odds. A significant number of firms have no visibility into workforce metrics, even as a shortage of top-tier talent emerges as their most pressing challenge.

A recent research report by Ardent Partners with support from Workforce Logiq identified top challenges within contingent workforce management.

  • 62% need to improve compliance
  • 56% need to enhance CWM visibility and intelligence
  • 32% need to reduce spending on contingent workforce
  • 30% need to manage the many sources of talent

Compliance, visibility, cost control. Sound familiar? These challenges align exactly with the value that procurement delivers to the organization.

How can procurement adapt?

What does procurement need to do to prove its worth in this new complex environment? The answer lies in applying supply chain rigor to workforce processes.

To do that, you need to first rethink how enterprise work is addressed. No longer are we just talking about “temps,” we’re looking at an ecosystem that not only includes independent consultants and freelancers, but also untraditional labor sources such as retirees, alumni, crowdsourcing participants, and even bots.

Procurement must be able to manage all sources of talent. Realistically, that often starts with a managed services program (MSP) that focuses on time and materials labor, but with a strategic plan to broaden capacity. Broadly speaking, the deployment process follows three steps:

Step 1: Capture the data

You don’t know what you don’t know. Before you can scale, you must conduct detailed discovery. This process considers resource classification, risk mitigation, reporting mechanisms, and spend management levers, among other items.

Step 2: Manage the details

In order to develop a technology and process roadmap, you must identify business value drivers and align your technology and outsourcing capabilities. In this stage, organizations define standardized processes and identify competitive sourcing opportunities.

Step 3: Plan for success
Once a seamless end-to-end process is established, it’s time to invest in building bridges between the business and procurement. Procurement must consistently reinforce its value using smart data and performance-based metrics.

A path to powerful results

When procurement has a seat at the table, everyone wins. That doesn’t just refer to increased productivity and profitability; procurement can also boost candidate attraction. By enhancing the talent experience, you can:

  • Build your firm’s reputation as a fair and efficient employer
  • Create a culture that embraces non-employee workers
  • Make onboarding and offboarding processes more efficient
  • Reduce “red tape” around engagements

To get there, it’s important to over communicate while you’re proving the model works. Get some wins under your belt and promote them, and you’ll gain credibility to assume additional control over talent acquisition.

Getting the right employees in place is a procurement challenge, not an acquisition challenge. Now go out there and solve it!

Author: Michael Werblun has over 20 years of executive and leadership experience. He has been a keynote speaker internationally on effectively managing contingent labor and a featured speaker with leading analyst organizations covering procurement and technology solutions around the globe.