Navigating Vendor-management Systems
Peopleclick and IQNavigator make software known as VMS, which automate, track and report on data and processes throughout the contingent-staffing lifecycle. More than 25% of companies surveyed by Staffing Industry Analysts reported VMS usage in 2006. Of those companies that did not report current VMS usage, 26% say they will start using VMS in the next two years, bringing total VMS penetration to more than 50%.
THE DECENTRALIZED NATURE OF TEMPORARY EMPLOYEE SPENDING DECISIONS HAS RESULTED IN A PROLIFERATION OF STAFFING AGENCIES PROVIDING SIMILAR SKILL SETS, WITH NO ABILITY TO ENSURE COMPETITIVE RATES.
A VMS allows staffing managers to create job requirements and project-based, or fixed-bid, requirements, set rates for job requirements and track contractual and logistical details of staffing or projects. With a VMS-driven competitive sourcing model, companies can centralize agency rate and performance data and scale to address variable workloads. That can lead to dramatic organizational improvements. Armed with data, companies updated policies and business rules to reflect changes in company goals, the legal landscape, and technology. Roles and responsibilities of managers are re-structured, information systems are configured and qualified agencies are contracted to address the projected contingent-worker usage. By deploying a VMS, companies can swing out-of-control spending and process inefficiency over to fully automated procurement and time-reporting processes. The entire contingent-resource lifecycle is automated through requisition distribution, job and project refinement, candidate/bid submission, selection, contract negotiation and time tracking. VMS also provide a controlled environment (where pre-qualified suppliers compete directly for requisitions) and the ability to create and manage supplier marketplaces, as well as measure supplier performance, facilitating dynamic low-cost sourcing and ongoing supplier-performance improvement for a highly optimized-supply base. Contingent-workforce services often involve onsite supplier personnel, who may be subject to background checks, certifications and other security checks as a prerequisite to site access. VMS allow companies to control on-boarding and off-boarding processes, supporting security, compliance and co-employment requirements. They come equipped with bells and whistles that turn hiring from a haphazard set of loosely-defined policies into a rules-driven, enterprise system that helps companies comply with reporting and compliance requirements. User roles can be defined with varying degrees of spending authority and access, which supports compliance with the U.S. Sarbanes-Oxley (SOX) and similar laws. Adhoc reporting tools provide insight into the staffing and services-procurement process, enabling companies to tweak them where needed.
Visibility and Control
CUNA Mutual, a financial-services provider, in 2006 implemented IQNavigator to manage the sourcing, procuring, tracking and payment of its temporary labor, IT services and projects-based professional consulting. The system supports the organization’s ability to source, manage and track delivery and pay by milestones, per-unit deliverables, time or any combination, multiple sourcing methods.
“The system has enabled the company to achieve full visibility and control over its services spending, which has traditionally been a difficult business area to manage,” says Kaaren Neuendorf, Business Services Portfolio Manager, CUNA Mutual. In addition to temporary labor services, the company is using IQNavigator to gain control of onsite outsourced services and management consulting, and is considering expanding its use of IQNavigator to event planning, marketing and security services and facilities management. The quick integration with existing systems greatly improved the process efficiencies and adoption of the program. The system links with CUNA’s internal systems to streamline the source-to-procure-to-pay processes for services. It supports approval hierarchies and rules, based on job type and spending limits, by connecting to the company’s HR system. It sends messages to CUNA’s on-boarding system when a contractor and consultant changes in status, providing coordinated building security and additional process efficiencies.
Companies have found that by deploying VMS, they can fundamentally transform contingent-workforce programs and foster continuous improvement. A VMS-supported competitive sourcing model can deliver year-over-year cost savings and improved candidate quality. Centralized data enables buyers to establish new sourcing strategies that once proved difficult to calculate and enforce. Getting buy-in from stakeholders has proven to be the biggest challenge in implementing a VMS-based staffing system. Procuring contingent-workforce employees are often the responsibility of purchasing or procurement departments versus human-resource organizations, who are primarily responsible for permanent employees. “Contractors have traditionally been seen as a commodity, not unlike pencils or laptops — costs to be driven down,” says John Silver, Executive VP, ProVision Technologies. IRS rules and potential worker lawsuits around the distinction between contract and regular employees add complexity to a company’s sourcing and acquisition initiatives regarding their workforce.
