Publisher’s Note: In 2019, Ardent Partners is celebrating 10 years of delivering “Research with Results” to Chief Procurement Officers (CPOs) and other readers of this site, including published reports, eBooks, presentations, insights, articles and events. To commemorate the occasion, we are going to reflect on the firm’s first decade by presenting this weekly “throwback” series that will include a blend of top articles from our earlier days on this site. Despite procurement’s recent advances, we believe these articles are as topical and relevant as the day they were published. And, in light of our fourth-annual procurement executive summit, CPO Rising, now just a few weeks away, we thought this particular article is most appropriate for a throwback. Enjoy!
Today, another article from Christopher Dwyer, vice president of research at Ardent Partners. As many of you well know, Chris has been an industry analyst for the past 15 years, writing some of the strongest and most insightful research that we’ve seen in the market. Today he continues his discussion of Contingent Workforce Management.
In an earlier article on CPO Rising, I discussed the evolution of contingent workforce management and the notion of the modern contingent workforce umbrella. The evolution of this “umbrella,” which has traversed beyond the notion of traditional temporary labor, is now forcing organizations across the globe to reevaluate their existing strategies and pinpoint solutions for driving value.
Over the past few years, this “umbrella” has grown to include professional services, independent contractors and consultants. And, with the growing emergence of project-based work (that is often completed by temporary help) as a significant component to businesses today, enterprises must work to understand how to mix-and-match a series of contingent workforce strategies for maximum effectiveness.
When an enterprise decides to bring procurement in to help manage project-based work (or spend), there are a few best practices that procurement should leverage to effectively manage what has become the most critical item of the contemporary contingent workforce umbrella.
- Remember, whether or not there are temporary workers or services assigned, these are still projects…which require the same project-tracking capabilities you’ve used a million times before. Delivery dates and key milestones should be under stronger discretion than other in-house projects that aren’t leveraging professional services or contract talent. Also, as with standard projects, ensure that the typical budgetary monitoring is a core piece of the strategy. Fees and other project-related expenses can wreak havoc.
- Don’t forget about core supply management strategies. Supplier performance management and supplier relationship management strategies can be applied to contingent workforce management, particularly SOW-based projects. Manage these relationships as you would your preferred and best suppliers, and ensure that each professional service (regardless of its type) goes through the same funnels as other enterprise suppliers.
- Analytics are your best friend. In my eight years as an industry analyst, there’s been no other strategy or tool that has made waves in complex spend management like analytics has. Leverage procurement’s knack for digging into data by allowing them to extract and analyze information related to core suppliers, performance against key milestones / delivery dates, and finances related to projects.
The truth is that many enterprises remain hesitant to make permanent investments in their full-time workforces; this means that the growth of project-based work will continue for years to come. Procurement’s big opportunity is to frame this project-based spend and the rest that falls under the contingent workforce umbrella as a single category and then work aggressively to place it under management.
This article originally published on April 5, 2013.
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