demystify - vectorvms · and msp, you open the field to more choices and possibly a better solution...
TRANSCRIPT
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Build your Roadmap to Implementation Success
D E M YS TI F Y S OW A D O P T I O N
VectorVMS.com
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TABLE OF CONTENTS
CREATE A FOUNDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ASSESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
MAP THE PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
TAKE INVENTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
CATEGORIZE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DEFINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
GOALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
CATEGORIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
STANDARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
BUILD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
PMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
NEW PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
EXECUTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
RFI/RFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
VMS/MSP – SEPARATE OR COMBINED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
CHANGE MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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CREATE A FOUNDATION
Many companies interested in making the move to SOW technology find it difficult to get started.
Ironically, the challenge is tied to one of the key reasons for adopting SOW technology in the first place: Lack of visibility into the current process and total spend.
This guide will help you assess and organize your current processes for procuring services or SOW projects as a critical step before adopting an automated services procurement solution.
The approach is adaptable to the needs of your organization. Solutions vary based on
» Organizational management (centralized, distributed)
» Size and scope of spend on projects and services
» In-house ERP, financial, and other systems
» Shared desire for organizational change.
Assess Define Build Execute » Map the Process
» Take Inventory
» Categorize
» Goals
» Categories
» Standards
» Compliance
» Committee
» PMO
» New Process
» RFI/RFP
» VMS/MSP
» Change Management
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At the highest level you should determine the categories of spend in order to focus on the areas you believe will yield the greatest savings, efficiencies, quality improvements, or other key metric.
Discretionary Projects IT, Niche Suppliers, ICs
10-15% spend Largest number of
transactions
Tactical ServicesSupport & Operational Contracts
15-30% spend
Strategic/Consulting Services IBM, Big 4, ERP
55-75% spend
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Proposals
Distribution
Engagement
Change Requests
ASSESS
Map The Process
Approval Selection Payment
Request
PMO Review
» Request to payment workflow for all participants » Hiring Manager
» Contract Manager
» Project Management Office (PMO)
» Procurement
» Supplier
» Note the system interactions » Procurement (PO numbers)
» Portfolio / Project Management (budgets, project codes)
» Financials (cost centers)
» Approvals » Hierarchy
» Budget-based
» PMO
» Documents » General MSA
» Contract
» Statement of Work
» RFI / RFP
» Compliance paperwork
» Manual approval documents
» Note the workflow variations » Business unit differences
» Location differences
» Vary by SOW type
» Note the manual processes » Approvals
» Reviews
» Signatures
» Payments
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Understanding your current environment is essential to successfully implementing an automated SOW program. Look at all active projects, independent contractors, and service contracts and sort them into groups or categories. Examine all the current contracts you have with your active suppliers. Look for common SLAs in the contracts. Finally, look at your supplier population and determine how each one fits into your strategy, what categories they can cover, and whether you have enough in each category to assure competitive bidding.
TAKE INVENTORY
» Identify all active » Projects
» Independent contractors
» Under current SOWs
» Not under SOWs and being paid directly by your organization
» Sort into groups » Independents
» Projects
» Services
» Offshore
» BPO
» Corporate consulting
» Identify your categories » IT Services
» Finance / Accounting
» Engineering
» Training
» HR
» Audit
» Legal
» Marketing
» Sales
» Other
» Examine contracts » Standards
» Global
» Category
» Supplier type
» Variations
» Examine SOWs » Standard
» Deliverables
» T&M
» SLAs
» Inventory the suppliers » By work group
(services, projects, consulting)
» By spend
» By category
» By location
» By contract type
» General performance (if information is available)
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CATEGORIZEMost likely you already have purchasing categories available for all your SOW work. As you move forward, you need to determine whether new general purchasing categories are necessary.
In addition to purchasing categories, identify the type of work being performed under the SOW—for example, by independent contracts, under project guidelines, or through services contracts. These are the most common types of work under SOWs.
Most likely you already have purchasing categories available for all your SOW work. As you move forward, you need to determine whether new general purchasing categories are necessary.
Finance Legal HR Marketing???
Audit IT Services Training Facilities
Independents
Projects
Services
IC (1099)
Small supplier
Fixed price
Milestone
SLAs
Fixed length
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Offshore
Business Process Outsourcing
Corporate Consulting
Projects and/or labor
SLAs
Entire functional areas
Category
C Level
Large dollar transactions
You may decide to include other categories of spend in your SOW program. These categories contain large dollar projects under outsourcing contracts or C-level approved consulting deals. They may represent potentially significant cost savings, but they can be much harder to manage.
Your projects and SOWs should fall into one of the six areas listed above. You may have variations or even subcategories. For example, offshore may mean literally offshore or could include onshore outsourced projects. You can add additional categories if necessary. The idea behind categorizing is to identify where the company is spending money and to allow for more finite metrics going forward.
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DEFINE
Goals
CostSavings Efficiency Compliance Visibility
Rate Standards
Supplier Rationalization
Competitive Bidding
Discounts
Process
Payments
Project Management
Budgetary
Approval
Policy
Risk Mitigation
Reporting
Analytics
Internal policy compliance
Management controls
» Cost Savings » Rate standards
(rationalization)
» Create rate cards for categories
» Supplier rationalization
» Competitive bidding
» Discounts
» Efficiency » Process
» PMO
» Payments
» Visibility » Internal policy compliance
» Management controls
» Spend
» Compliance » Budgetary
» Approval authority
» Policy
» Risk mitigation
» Quality » Project
» Vendor performance
» Budget
» Change requests
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Your categories may already be defined within your purchasing system or through your finance department. Your task is to further define the type of projects and services to assign to each category. For example, the IT Services category typically has a high number of assigned projects, but even if they’re the developers, not all projects belong to IT Services. Your future system should include policy and approvals to help users correctly categorize projects and services.
Finance Legal HR
Marketing
???
Audit IT Services
Training Facilities
CATEGORIES
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Categories
Budgetary
Approvals
Workflow
Terms
Pricing
Requirements
Milestones
T&M
Change Control
Deliverables
Governance
Develop standards to apply to both the program and projects.
STANDARDS
» Program standards » Categorizing projects/services
» Budgetary
» Approval levels
» Handling overages
» Who can approve
» Capital projects
» Expense projects
» Overages
» Workflow
» Simple works best
» Payment terms
» By category
» By project type
» Pricing
» Set standards for most used job classes
» Markups
» Project standards » Requirements
» Who creates
» Who approves
» Milestones
» Standards for reporting purposes
» Required by project type?
» Time and Materials
» Allowed?
» Dollar limits
» Change control
» Who approves
» Measured (SLA)
» Percentage limits
» Deliverables
» Acceptance process
» Payment process
» Governance
» PMO
» IT governance committee
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» Internal » Process
» Policy
» Risk mitigation
» Identify the risk elements
» Determine probability of risk
» Assess potential dollar impact
» Prioritize risks
» External » Supplier
» Capability
» Financial soundness
» Resources
» Standard onboarding criteria
» Audit
Compliance within your SOW program covers internal requirements; external, mandated, or regulatory needs; and specific audit requirements (typically based on industry standards).
COMPLIANCE
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Your stakeholder committee is tasked with educating the rest of the enterprise. It should have representation from as many areas as necessary to ensure buy-in across the board. Members are also meant to act as subject matter experts within their respective areas:
» Procurement – SOWs, competitive bidding
» Finance – accruals, reconciliation, invoicing and payment process
» Legal – SOW standards mean fewer disputes
» HR – tracking, compliance, and quality
» IT – both client and service provider
» Business units – power users
» Executive sponsorship.
The stakeholder committee is vital to the success of implementing and gaining adoption for an SOW automated process. Although you could assemble this group earlier in the process, it sometimes pays to wait until you have identified the right individuals from each department. As you go through the assessment process, you will interact with most of the major departments. This will allow you to determine who is most knowledgeable and, maybe more importantly, who shares your desire to make this project successful.
Make sure that the executive sponsor is at the right level to interact with other senior executives when needed. If possible, find an executive either at the C-level or who reports directly to a C-level executive.
Having a PMO is not essential to implementing an SOW program, but it can certainly enhance the quality and reduce the costs of projects. The biggest decision around creating a PMO is determining what level of involvement you want them to have in projects. This is an organizational decision based on culture and capability.
PMOs can
» Define and maintain project management standards
» Document the process
» Develop and maintain project metrics
» Serve one of three roles:
» Supportive – offering consultation
» Controlling – requiring compliance
» Directive – managing projects
Committee
PMO
BUILD
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This is where you begin to lay out the desired process—your future state—based on standards you have created and the features you determined to be necessary for a successful system. The workflow you design can be used as input for an RFI or RFP to software vendors and managed service providers.
System:
» Create requisitions » Milestone / T&M / Fees
» Integration – GL codes, cost centers, projects
» RFI / RFP
» Attachments / Connections
» Workflow
» Approval capabilities » Hierarchical
» Budget-based
» PMO
» Sourcing » Multiple suppliers
» New suppliers
» Distribution
» Awarding business » Review
» Ranking
» Payment schedules
» Compliance » Onboarding / Off-boarding
» Policies
» Engagement » Managing milestones /
deliverables
» Change requests
» Budgets
» Time and expense » Time capture
» Project management integration
» Invoice approvals
» Billing and invoicing » Pay suppliers
» Data integrations (feeds and extracts)
» Audit and adjustments
» Reporting and analytics » General reporting / dashboards
» Analytic capabilities
New Process
TIP: Overly complex processes and workflows can lead to systems that are difficult to use. Difficult systems suffer from adoption problems .
Analytics
1. Create SOW • Role/Permission Based• Configurable Approvals• Create SOW• Attach RFP & Support Docs
5. Engagement Management • Milestone/Deliverable Management• Cost Center, G/L, Project Code Support• Manage Change Requests• Manage Budgets/Burn Rate
6. Time & Expenses• Time & Expense
Capture• Milestone Capture• Invoice Approval
7. Time & Expenses• Pay Provider• ERP Feeds & Extracts• Audit & Adjustment Support
8. Off-Board Contractors• Finish Notifications• Reporting & Analytics• Security Badge Deactivation• System Logon Deactivation
4. On-Board Consultants• Compliance Manager• Security Badges• System Provisioning
2. Source Bids • Provider Distribution Controls• Budget/P .O . Controls• Time & Date Stamp
3. Award Project • Review/Rank/Score Bids• Select Provider• Finalize Milestones• Create Payment Schedule• Define Payment Schedule
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Working with your stakeholder committee, use the information you collected and developed along with your new system requirements to build a comprehensive RFI or RFP that includes the following:
You should also provide information about your program, such as
» Technology requirements
» Security considerations
» System integrations
» Workflow (multiple if needed)
» Policies
» Compliance.
» Job categories
» Locations
» Size and scope
» Language needs
You and your committee must determine whether to send one RFP to a VMS provider and a separate RFP to an MSP provider, or whether you prefer to create a single RFP for a VMS/MSP solution. Most major MSPs will work with whatever VMS you choose, but some who work exclusively with a single technology. In contrast, the majority of pure-play VMS providers can implement their technology with any of the major MSP providers.
The risk of issuing a single RFP is that you may not see as many VMS choices in proposals for a combined VMS/MSP solution. With separate RFPs for VMS and MSP, you open the field to more choices and possibly a better solution for your company.
If you are currently working with a VMS for your hourly contingent labor and the technology meets the SOW needs defined by your committee, the best option may be to send an RFP only to MSP providers. This eliminates the need to migrate your current VMS to a new technology and allows you to implement the SOW program more quickly.
RFI/RFP
VMS/MSP – Separate Or Combined
EXECUTE
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According to John Kotter (Kotter International), change management is an approach to transitioning individuals, teams, and organizations to a desired future state. For complex, enterprise-wide programs, change management never ends. Successful implementations of complex programs require significant leadership support, along with a proactive and passionate day-to-day manager.
The VMS/MSP you choose should work with you to build a change management approach that fits into your corporate culture. Along with your corporate marketing and communications team, you should develop a comprehensive approach that speaks to all levels of the organization constantly and consistently. Provide continuous training along with tremendous support.
Change Management
Contact Us
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About VectorVMS
VectorVMS, a former division of PeopleFluent, delivers software and services to help businesses optimize their contingent workforce programs. Drawing on 20 years of experience, we help clients and MSP partners control costs, maintain compliance, and drive quality and efficiency—throughout the contingent labor lifecycle.
VectorVMS offers flexible delivery models, enabling clients to manage strategic sourcing in-house, through an MSP, or with support from our experienced program managers.
A part of Learning Technologies Group plc (LTG), VectorVMS also powers a total talent ecosystem that gives clients a holistic view of their workforce.
For more, visit vectorvms.com.
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