Future of Sourcing - North America https://futureofsourcing.com/regions/north-america en Innovations in Supplier Performance: BGIS Global Integrated Solutions https://futureofsourcing.com/innovations-in-supplier-performance-bgis-global-integrated-solutions <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/fos-announcement-video_fos-site_hero_Innovations-in-Supplier-Performance.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/fos-announcement-video_fos-site_hero_Innovations-in-Supplier-Performance.jpg" title="Innovations in Supplier Performance: BGIS Global Integrated Solutions" class="colorbox" rel="gallery-node-2229-fdq7tN1590g"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/fos-announcement-video_fos-site_hero_Innovations-in-Supplier-Performance.jpg?itok=7lNQqhqL" width="624" height="325" alt="Innovations in Supplier Performance: BGIS Global Integrated Solutions" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <div> <div> <div> <p><em><strong>This October, the&nbsp;<a href="https://futureofsourcingawards.com/?__hstc=215510152.344406f4865c40604cf6029be7e958e0.1543422516683.1570835886974.1570842947555.661&amp;__hssc=215510152.2.1570842947555&amp;__hsfp=847670889">Future of Sourcing Awards</a>&nbsp;will celebrate organizations and individuals that have shown innovation, leadership and transformation in categories that are critical to the sourcing industry. Interviews with the finalists provide helpful insight about their projects, the problem they sought to solve and the impact to their organizations.</strong></em></p> </div> </div> </div> <div> <div> <div property="content:encoded"> <div>&nbsp;</div> </div> </div> </div> <p>&nbsp;</p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div> <h3><em>Can you outline why your team embarked on this project and the problem that needed to be solved?</em></h3> </div> <div> <div>BGIS is a fast-growing organization providing a full range of real estate services to corporate clients. Our mission is to deliver innovative business solutions for clients with real estate portfolios, while continually creating value for their stakeholders and ensuring a sustainable, safe, and comfortable environment for all. We constantly seek to innovate, partnering with leading technology providers to help drive improved service outcomes for our clients that ensure critical safety, compliance, sustainability, and business continuity objectives are achieved. We work with over 12,000 subcontracted suppliers and our goal is to make it easier for them to do business with us.&nbsp;</div> <div>&nbsp;</div> <div>BGIS&rsquo;s growth made it clear our supply-chain systems required improvement. The procurement-related teams held numerous &ldquo;Blue-Sky&rdquo;, brainstorming and effort-impact planning sessions resulting in alignment on the critical projects necessary to deliver the most impactful results. The findings were that the integration between our sourcing, procurement, operations, and invoice management processes were strained due to sub-optimal systems and lack of standardization.</div> <div>&nbsp;</div> </div> <div> <div> <h3><em>How were things done originally and what was the inspiration to innovate the process?</em></h3> <div>The findings from the sessions were that the integration between our sourcing, procurement, operations, and invoice management processes were strained due to sub-optimal systems and lack of standardization. The team identified four opportunity areas addressing high administrative costs, rework, speed, compliance, and supplier satisfaction: &nbsp;</div> <ol> <li>There was a lack of a comprehensive contract lifecycle management tool; contract registry was managed in a complex and cumbersome SharePoint workflow. &nbsp;</li> <li>The existing supplier compliance provider imposed high user-registration fees, resulting in low adoption and compliance rates by suppliers. Supplier setup process was manual and did not integrate with BGIS&rsquo;s ERP.&nbsp;</li> <li>Recurring contract PO processes were inefficient, inconsistent, and fraught with error, resulting in invoice rejections and payment delays. &nbsp;</li> <li>The supplier invoice processing system was inefficient. Administration was labour-intensive, often resulting in payment delays.&nbsp;</li> </ol> <p><span style="font-size: 13.008px;">BGIS is committed to implementing innovative ways to optimize our processes, making them more efficient and able to sustain the organization&rsquo;s growth. As we indicated earlier, we partner with 12,000+ suppliers globally to provide reliable, quality services to our clients and we needed industry-leading systems and tools to make it easier for them to do business with BGIS.</span></p> <p>&nbsp;</p> <p><em style="font-size: 1.231em; font-weight: bold;">What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)</em></p> <div>BGIS moved from relatively manual processes for invoice processing and contract management, often resulting in duplication of efforts, to achieving its goal of an integrated and efficient end-to-end source-to-payment process.&nbsp;</div> <div>&nbsp;</div> <ol> <li>The eHUB contract lifecycle management system, the only one of its kind in our industry, allowed Strategic Sourcing to be more efficient and take on additional workload equivalent to 8% of our operating budget with no additional resources. eHUB currently manages 2,600+ contracts, 3,350+ amendments and 3,750+ suppliers. In 2021, the Strategic Sourcing team executed over 800 contracts and amendments (95% increase from that in the previous SharePoint manual tool). Strategic Sourcing has maintained a 99% compliance with our Strategic Sourcing and contract management policies. The eHUB system has the added features of milestone tracking, automated reminders, extensive initiative tracking, resource planning and advanced reporting capability. We recently added the ability to track achieved savings, which when reporting is fully implemented, will create additional efficiencies. The system allows us to implement bulk updates to records and process large amounts of data through the backend. For example, we recently established and processed 1,200+ amendments for execution within a week &ndash; an achievement which would not have been possible before.&nbsp;</li> <li>Since the implementation of the Avetta supplier compliance system and the new supplier setup tool, supplier registration in Avetta has reached 100%. 1,000+ suppliers with 8,000+ connections are registered and BGIS achieved 85% compliance within 6 months of implementing the system. Additionally, Avetta has been able to accommodate enhanced H&amp;SE requirements, client-specific COVID-19 requirements, diversity and inclusion questionnaires, automated document signoff and enhanced reporting. Supplier satisfaction with Avetta increased to 98% from 72% with the previous provider. &nbsp;</li> <li>The implementation of the Oracle Cloud system resulted in the unprecedented &ldquo;PO Flip&rdquo; and enhanced financial reporting, internal controls, and invoice management capabilities. Real-time invoice validation and reduced processing time improved the on-time payment metrics. With the visibility, timeliness and transparency provided to the suppliers, the enhanced process enabled the P2P team to deal with 50% less exceptions compared to 2 years prior, saving substantial time and costs, and enabling the team to focus on other process improvements. In addition, the Supplier Portal also better supports cash stability for both BGIS and our suppliers. &nbsp;</li> <li>Invoice payment and efficiency improvements have been reported consistently since the implementation of the Supplier Portal and the Oracle Cloud system. First-pass-yield on invoice processing achieved 90%, up from 60% (50% improvement) and Supplier Portal usage has increased to 40% of our suppliers, up from 15%. The cost per invoice has been reduced by 35%. The P2P is now able to focus on value-add initiatives rather than ongoing issue resolution. Supplier satisfaction with BGIS invoice processing systems has increased to 95% (up from 44%)!&nbsp;</li> <li>Part of the Oracle Cloud system, a business portal for BGIS users allowed for automated change requests leading to reduced touch points, fewer exceptions and inquiries, real-time invoice validation, and improved ability for on-time payment. The maintenance activities of the contract PO were greatly streamlined reducing errors and rework. &nbsp;</li> </ol> <p><span style="font-size: 13.008px;">BGIS issues an annual Supplier Satisfaction survey and while our relationship with our suppliers has always been very positive, since these supply-chain sourcing to payment solution improvements were implemented, our results have significantly improved. Overall satisfaction increased to 96%, up from 78%; the satisfaction with BGIS systems, tools and apps has increased to 89%, up from 62%; and 89% of our suppliers find it easy to do business with BGIS, up from 64%. These results indicate that we are well on our way of achieving our goal of making it easier for suppliers to do business with us.&nbsp;</span></p> </div> <div> <h3><em>How do you plan to ensure that the new model remains relevant and adapts to the future needs of the market?</em></h3> </div> <div> <div style="clear:both;"> <div> <div> <div>The BGIS tagline is &ldquo;Enabling Innovation&rdquo;. As a global leader in integrated facility management services, we offer a full range of facility and real estate management services, partnering with clients globally to bring forward innovative solutions. Our clients are sophisticated and demand sophisticated solutions. We strive to be leaders in a very competitive industry, and we foster a culture of innovation and continuous improvement within our organization and our supplier base.</div> <div>&nbsp;</div> <div>Open forums, focus groups and clear communication help us drive innovative and unique solutions. Our Innovation Council hosts monthly discussions where cross-functional reps share ideas and the latest innovative solutions and obtain valuable user perspective.</div> <div>&nbsp;</div> <div>Since the initial implementation of the systems noted here, we have continually sought ways to enhance and improve the delivery model beyond the initial scope. These systems have the capacity to support BGIS growth, new functionality and expand globally.</div> <div>&nbsp;</div> <div>In addition, we leverage Business Intelligence (BI) to provide improved dashboards and business analytics. Our objectives for the next few years are to generate insights and predications that enable strategic decision making by allowing full visibility and actionable insights into trends. This entails a focus on integration and data governance to gain holistic insights; enabling a data driven culture that adopts embedded analytics for decision-making, forward-looking predictions and recommendations that drive business outcomes; and increased efficiency through process automation and digital transformation.</div> <div>&nbsp;</div> <div>We utilize Robotic Process Automation (RPA), Application Programming Interface (API) data transfer and Operational Data Store (ODS) technologies, technologies that will continue to provide exponential growth support without requiring additional resources. Cross-functional leadership teams meet regularly and closely ensuring that emerging technologies are applied for future value and growth.&nbsp;</div> <div>&nbsp;</div> </div> </div> </div> </div> <div> <h3><em>What advice do you have for those who may want to implement this innovative approach in their own organizations? </em></h3> </div> <div> <div> <div>Several learnings resulted from these projects and are now embedded in our organization: &nbsp;</div> <ol> <li>A well-established business case, project charter and executive support are key to a successful system development and change.&nbsp;</li> <li>Open forums, focus groups and clear communication within the organization as well as to the supplier base helped us come up with innovative and unique solutions. These open lines of communication and idea exchanges were imperative to obtaining user perspective as well as buy-in and support. Involving these key participants resulted in an outcome that provided increased supplier satisfaction scores.</li> <li>Having a Centre of Expertise along with strategic points of contact (SPOCs) in the business units to help with cascading and championing the change management message across their teams and help with training users was a key factor.</li> <li><span style="font-size: 13.008px;">Having standardized and centralized processing within our corporate procurement-related functions (Strategic Sourcing, P2P, etc.) using consistent tools and processes across all our business units is critical to success and efficiency.</span></li> <li>Comprehensive and ongoing communication and training is imperative to the success of the implementation of a system with such significant magnitude and span across our supply-chain and cross-functional delivery systems.&nbsp;</li> </ol> </div> <div>&nbsp;</div> </div> <div> <h3><em>What factors do you think are the most important to consider when innovating supplier performance?&nbsp;</em></h3> </div> <div> <div>The most important factors to consider when innovating supplier performance are to establish a mutually respectful relationship with mutually accepted objectives and KPI&rsquo;s that are well defined in the contract. It is important that neither party holds the other accountable for things that are outside their control. BGIS has a supplier score card system which ensures that supplier performance is measured using a methodology that is measurable, consistent, uses inputs from the systems outlined above, and avoids subjectivity.</div> <div>&nbsp;</div> <div>It is critical to establish a strong governance process that has appropriate review cadence with individuals at the highest possible level of the supplier organization to monitor performance results, improvement opportunities and action items. We hold regularly scheduled Supplier Business Review (SBR) meetings which result in well documented notes and action items that are reviewed at each meeting.</div> <div>&nbsp;</div> <div>Having a well documented processes ensure that consistency in supplier reviews and management regardless of changes in individuals. We have found that a strong and well-documented performance management regime allows for strategic innovation and partnership with our suppliers.</div> </div> </div> <p>&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/outsourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Outsourcing</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/future-of-sourcing-awards" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Future of Sourcing Awards</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/technology" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Technology</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/software" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Software</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Innovations in Supplier Performance: BGIS Global Integrated Solutions - Future of Sourcing" addthis:url="https://futureofsourcing.com/innovations-in-supplier-performance-bgis-global-integrated-solutions"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div></div></div> Thu, 13 Oct 2022 20:24:37 +0000 Future of Sourcing Awards 2229 at https://futureofsourcing.com https://futureofsourcing.com/innovations-in-supplier-performance-bgis-global-integrated-solutions#comments Innovations in Outsourcing: GEP https://futureofsourcing.com/innovations-in-outsourcing-gep-0 <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/fos-announcement-video_fos-site_hero_Innovations-in-Outsourcing_0.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/fos-announcement-video_fos-site_hero_Innovations-in-Outsourcing_0.jpg" title="Innovations in Outsourcing: GEP" class="colorbox" rel="gallery-node-2226-fdq7tN1590g"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/fos-announcement-video_fos-site_hero_Innovations-in-Outsourcing_0.jpg?itok=jI78IZ7K" width="624" height="325" alt="Innovations in Outsourcing: GEP" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em><strong>On October 19th, the&nbsp;<a href="https://futureofsourcingawards.com/?__hstc=215510152.344406f4865c40604cf6029be7e958e0.1543422516683.1570835886974.1570842947555.661&amp;__hssc=215510152.2.1570842947555&amp;__hsfp=847670889">Future of Sourcing Awards</a>&nbsp;will celebrate organizations and individuals that have shown innovation, leadership and transformation in categories that are critical to the sourcing industry. Interviews with the finalists provide helpful insight about their projects, the problem they sought to solve and the impact to their organizations.</strong></em></p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div> <h3><em>Can you outline why your team embarked on this project and the problem that needed to be solved?</em></h3> </div> <div><span style="font-size: 13.008px;">The client is a Fortune 500 retail company that was facing immense challenges overcoming the severe impact of the pandemic on its brick-and-mortar sales. It needed to urgently revamp and transform its procurement organization so that it could help the business recover and grow. The procurement function needed to evolve, redefine its priorities and play a strategic role within the company to respond to the evolving business environment and consumer habits because of the pandemic. &nbsp;</span></div> <ul> <li><span style="font-size: 13.008px;">Improved business relationship to drive savings in a challenging business environment</span></li> <li>Close supplier partnerships, brokered by procurement, to enhance supplier-driven innovation and minimize business disruption &nbsp;</li> <li>Increased cost management as the client focused on improving sales and margins &nbsp;</li> <li>Improved working capital and liquidity &nbsp;</li> <li>Assistance with capital expenditure projects as the business started to make investments to recover and expand &nbsp;&nbsp;</li> <li>Sustainability through renewable energy project</li> </ul> <div>&nbsp;</div> <div>The company recognized that to get to the next level, it needed external help and decided to partner with GEP both to find solutions for its immediate concerns as well as help in its longer procurement transformation journey. It selected GEP for its expertise in procurement and supply chain solutions, its capabilities in retail, and its experience in helping other global companies overcome challenges and grow. &nbsp;&nbsp;</div> <div>&nbsp;</div> <div>GEP strives to help enterprises rapidly build the infrastructure and capabilities required to power high-performance procurement organizations. Through this project, which required unified approach encompassing strategy, software and managed services, GEP was able to showcase how a high-performing procurement function can play a crucial role in helping the organization overcome series of external challenges and help it in a transformation journey.</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div> <div> <h3><em>How were things done originally and what was the inspiration to innovate the process?</em></h3> </div> <div> <div>The company had a capable procurement organization in place prior to the pandemic, but the team was set in its ways and was unable to leverage its existing capabilities to drive improved outcomes. Procurement needed more support to respond to the fast-changing market landscape and external challenges brought on by the lockdowns, transportation restrictions, social distancing, the shift to online buying and new consumer shopping patterns.</div> <div>&nbsp;</div> <div>The company had furloughed a high percentage of their staff, leaving a bare-bones operations team at the management level to run the business during the lockdown and its stock prices were falling. We realized we could help the client: &nbsp;</div> <ul> <li>Drive the sustainability and ESG agenda by utilizing more renewable energy.&nbsp;</li> <li>Improve gross margins through competitive tension and improve the sourcing execution speed with the use of auctions.&nbsp;</li> <li>Gain greater control over spend, drive greater compliance and save costs by shortening its long tail and consolidating suppliers.</li> </ul> </div> <div>&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)</em></h3> </div> <div> <div>Overall, savings/benefits was the key metric used to measure outcomes and success. For every project, savings were approved by client&rsquo;s finance team. &nbsp;</div> <div>For specific initiatives, metrics to measure outcomes differed for individual projects:</div> <div>&nbsp;</div> <div> <div>Overall, savings/benefits was the key metric used to measure outcomes and success. For every project, savings were approved by client&rsquo;s finance team. &nbsp;</div> <div>For specific initiatives, metrics to measure outcomes differed for individual projects: &nbsp;</div> <ul> <li>Auctions: Outcome was measured based on reduction in unit price compared to historical cost &nbsp;</li> <li>Tail spend management: Outcome was measured based on reduction in tail spend and reduction in number of tail-spend suppliers&nbsp;</li> <li>Renewable energy: Outcome was measured by calculating the increase in the proportion of electricity from renewable sources post implementation.</li> </ul> <p>&nbsp;</p> </div> </div> <div> <h3><em>How do you plan to ensure that the new model remains relevant and adapts to the future needs of the market?</em></h3> </div> <div> <div style="clear:both;"> <p paraeid="{6c137d00-48a5-40b8-ae3b-ad8efa1e0496}{80}" paraid="872280017"><span data-contrast="auto" xml:lang="EN-US">Many changes were in the form of improving processes and optimizing approach. These changes have been integrated into the client procurement team&rsquo;s way of working. For </span>e.g., the quarterly leadership governance framework has been implemented to ensure periodic top alignment between business teams and procurement.&nbsp;&nbsp;</p> </div> <div style="clear:both;"> <p paraeid="{6c137d00-48a5-40b8-ae3b-ad8efa1e0496}{90}" paraid="2093809555"><span data-contrast="auto" xml:lang="EN-US">Playbooks have been created wherever possible. For </span>e.g., a renewable energy playbook has been developed so that the strategy can be extended to more locations in the future.&nbsp;&nbsp;</p> </div> <div style="clear:both;"> <p paraeid="{6c137d00-48a5-40b8-ae3b-ad8efa1e0496}{100}" paraid="941188535"><span data-contrast="auto" xml:lang="EN-US">Procurement is now collaborating with the leadership on key business initiatives such as sustainability and inflation mitigation. As procurement is close to the supply market and has access to contract and </span>spend data, it is well placed to advice on managing inflationary pressures and future needs.</p> <p paraeid="{6c137d00-48a5-40b8-ae3b-ad8efa1e0496}{100}" paraid="941188535">&nbsp;</p> </div> </div> <div> <h3><em>What advice do you have for those who may want to implement this innovative approach in their own organizations? </em></h3> </div> <div><span style="font-size: 13.008px;">It is important to align procurement&rsquo;s goals with the goals of respective business units as well as the organization.&nbsp;</span></div> <div>In an increasingly unpredictable world, understanding the priorities of business as well as monitoring external developments helps anticipate challenges and deal with them proactively.&nbsp;</div> <div>&nbsp;</div> <div>Operating with a &#39;flat&#39; organization hierarchy that allows for rapid decision-making is important in times of crisis. Digitalization helps in unlocking huge opportunities and enables the procurement organization to reduce its effort on tactical activities, helping it focus on strategic priorities. Digitalization also empowers procurement because it increases ease of access to key information, which in turn enables rapid and accurate decision-making.&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <div> <h3><em>I&#39;m sure your company has many different processes and projects they are outsourcing. Why did you choose to submit this specific project? </em></h3> </div> <div> <div>While all projects require addressing different challenges, this project was unique due to the number and scale of challenges faced by the client. &nbsp;</div> <div>&nbsp;</div> <div>The Covid-19 crisis had a seismic impact on the retail industry, with stores forced to shutter and an escalating shift to e-commerce. The resulting furloughs and falling stock prices added to the sense of panic. External factors such as supply chain disruptions and trade tensions between US and China further exacerbated the challenges.&nbsp;</div> <div>&nbsp;</div> <div>Big businesses had to react with speed to this onslaught of external shocks as those who waited too long to adapt risked never being able to catch up. The client&rsquo;s procurement team partnered with GEP to steer the client through these challenges, which helped it emerge stronger through the pandemic. To achieve these results, GEP worked with the client on multiple goals like developing close supplier partnerships, managing costs, improving working capital, driving sustainability and optimizing the approach to capital expenditure.</div> </div> </div> <p>&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/outsourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Outsourcing</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/future-of-sourcing-awards" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Future of Sourcing Awards</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/technology" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Technology</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/software" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Software</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Innovations in Outsourcing: GEP - Future of Sourcing" addthis:url="https://futureofsourcing.com/innovations-in-outsourcing-gep-0"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div></div></div> Thu, 13 Oct 2022 15:15:35 +0000 Future of Sourcing Awards 2226 at https://futureofsourcing.com https://futureofsourcing.com/innovations-in-outsourcing-gep-0#comments Innovations in Outsourcing: Scientist.com https://futureofsourcing.com/innovations-in-outsourcing-scientistcom <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/fos-announcement-video_fos-site_hero_Innovations-in-Outsourcing_0.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/fos-announcement-video_fos-site_hero_Innovations-in-Outsourcing_0.jpg" title="Innovations in Outsourcing: Scientist.com" class="colorbox" rel="gallery-node-2225-fdq7tN1590g"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/fos-announcement-video_fos-site_hero_Innovations-in-Outsourcing_0.jpg?itok=jI78IZ7K" width="624" height="325" alt="Innovations in Outsourcing: Scientist.com" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <div> <div> <div> <p><em><strong>This October, the&nbsp;<a href="https://futureofsourcingawards.com/?__hstc=215510152.344406f4865c40604cf6029be7e958e0.1543422516683.1570835886974.1570842947555.661&amp;__hssc=215510152.2.1570842947555&amp;__hsfp=847670889">Future of Sourcing Awards</a>&nbsp;will celebrate organizations and individuals that have shown innovation, leadership and transformation in categories that are critical to the sourcing industry. Interviews with the finalists provide helpful insight about their projects, the problem they sought to solve and the impact to their organizations.</strong></em></p> </div> </div> </div> <p>&nbsp;</p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div> <h3><em>Can you outline why your team embarked on this project and the problem that needed to be solved?</em></h3> </div> <div>Early on in our company&rsquo;s evolution we realized that compliance within the pharmaceutical industry was not fit for everyday R&amp;D, as it inadvertently delayed research and increased indirect costs. &nbsp;Scientist.com seized the opportunity to create a new way of addressing compliance in outsourcing. Our goal was to enable increased visibility, traceability and control when outsourcing services while reducing the administrative burden on those outsourcing these services, promoting relationships that speed up scientific research, thereby reducing the overall cost of projects.</div> <div> <div> <h3>&nbsp;</h3> <h3><em>How were things done originally and what was the inspiration to innovate the process?</em></h3> </div> <div><span style="font-size: 13.008px;">Prior to COMPLi, compliance approvals within research organizations often varied greatly depending on the organization and their appetite for risk. &nbsp;Smaller organizations with limited resources had to focus only on critical areas of R&amp;D (like clinical trials) and took a more hands off approach to what they deemed &lsquo;lower&rsquo; risk areas. &nbsp;For larger organizations, years of bureaucracy had created overly complex, slow, burdensome processes that managed the risk but compromised efficiency and slowed projects. &nbsp;In novel areas of science companies struggled to develop a fit-for-purpose process so focused on finance approvals vs. scientific innovation.</span></div> <div>&nbsp; &nbsp;</div> <div>This variation across the industry lead to extended timelines, increased costs and a constantly a moving target for suppliers as they had to customize everything to the needs of each individual client vs. applying the same standards based on the services they were providing. &nbsp;This also demanded increased FTE support and could delay the drug discovery process, which drastically increased the costs to the organization and ultimately patients. COMPLi addresses compliance and governance requirements at every critical step of the sourcing process to speed up drug research.</div> <div>&nbsp;</div> <div>Scientist.com &ndash; as the world&rsquo;s leading online marketplace for scientific services, we were able to act as an independent third-party facilitator to ensure the needs of all parties were heard, addressed and resolved. &nbsp;Our experience as an online platform provider&mdash;over 10 years&mdash;and expertise in the sourcing or regulated services, such as human biological samples (HBS), enabled us to understand industry needs and translate them into industry-wide functionality.</div> <div>&nbsp;</div> <div> <h3><em>What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)</em></h3> </div> <div>COMPLi&rsquo;s success rested on two components: user adoption and continued usage. Currently, the COMPLi suite is the cornerstone of Scientist.com&rsquo;s outsourcing capabilities, allowing pharmaceutical companies, academic labs or small biotechs to easily acquire the necessary services and/or materials to complete studies with external third parties. &nbsp;COMPLi also reduces the administrative burden on suppliers of these services, enabling effective relationships to be formed that speed up scientific research. Our entire client list, which includes most of the world&rsquo;s top pharma, over 100 biotech organizations, the National Institutes of Health (NIH) and 4,000 global service providers all currently use COMPLi when outsourcing through the Scientist.com marketplace. Since its inception in 2017, COMPLi has supported hundreds of millions of dollars of research and is now the preferred solution for multiple pharmaceutical companies to support the sourcing of regulated services.</div> <div>&nbsp;</div> <div> <h3><em>How do you plan to ensure that the new model remains relevant and adapts to the future needs of the market?</em></h3> </div> <div><span style="font-size: 13.008px;">Built in collaboration with our biopharma clients and network of suppliers, COMPLi continues to take marketplace needs into consideration as we expand it to cover even more research areas. &nbsp;Its design enables COMPLi to be applied to any regulated service. &nbsp;It is also possible to deliver fast and efficient updates based on external changes to regulations or internal changes required by clients to ensure the needs of tomorrow are proactively addressed today. &nbsp;Flexibility is a key component of COMPLi and has ensured that as more clients use it, they do so based on constantly evolving requirements. &nbsp;</span></div> <div>&nbsp;</div> <div>Moving forward, the plan is to grow COMPLi in the pharmaceutical industry so that more companies can ensure all sourcing is done in 100% compliance of their internal policies and procedures while delivering the value procurement brings through cost effective sourcing to save time, money and resources. &nbsp;Scientist.com has the very lofty goal of helping to cure all diseases by 2050, and the benefits COMPLi offers our clients is critical to us achieving that.</div> <div>&nbsp;</div> <div> <h3><em>What advice do you have for those who may want to implement this innovative approach in their own organizations? </em></h3> </div> <div>We think the future of procurement and outsourcing will continue the trend of digital transformation. &nbsp;Successful companies will embrace technologies, such as Scientist.com, to enable their procurement professionals to re-evaluate their strategies and extract new and enhanced benefits from their offerings. &nbsp;Also, listening to your customers&rsquo; needs and pain points should help guide your processes and offerings. Finally, make every attempt to engage with your customers when developing your new tool/policy or product, because at the end of the day they will be the ones using them, and this will only help to drive adoption and continued usage.</div> <div>&nbsp;</div> <div> <h3><em>I&#39;m sure your company has many different processes and projects they are outsourcing. Why did you choose to submit this specific project? </em></h3> </div> <div><span style="font-size: 13.008px;">As a key component of an online marketplace that connects researchers (clients) with suppliers of outsourced services (including regulated services), COMPLi offers distinct competitive advantages. COMPLi allows clients to compare suppliers side by side under a standardized set of pre-defined criteria, access new suppliers and their innovations quickly and easily and perhaps most importantly, retain a direct contractual relationship with suppliers under COMPLi&rsquo;s unique legal framework. This means clients can benefit from COMPLi without increasing their risk profile.&nbsp;</span></div> <div>&nbsp;</div> <div>On the flip-side, suppliers can communicate how they adhere to compliance and regulatory standards to multiple clients in a single process and instantly increase their client base through a pre-negotiated contract, which provides visibility to all clients and reduces delays, allowing suppliers to focus resources on value-adding activities rather than administrative costs. Plus, suppliers can retain and benefit from the direct contractual relationship with clients through COMPLi&rsquo;s unique legal framework.</div> </div> <p>&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/outsourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Outsourcing</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/future-of-sourcing-awards" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Future of Sourcing Awards</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/technology" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Technology</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/procurement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Procurement</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/software" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Software</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Innovations in Outsourcing: Scientist.com - Future of Sourcing" addthis:url="https://futureofsourcing.com/innovations-in-outsourcing-scientistcom"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div></div></div> Thu, 13 Oct 2022 13:13:07 +0000 Future of Sourcing Awards 2225 at https://futureofsourcing.com https://futureofsourcing.com/innovations-in-outsourcing-scientistcom#comments How To Reduce CO2 Emissions In Your Value Chain https://futureofsourcing.com/how-to-reduce-co2-emissions-in-your-value-chain <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Copy%20of%20FOS%20June%202022%20Article%20Graphics_0.png"><a href="https://futureofsourcing.com/sites/default/files/articles/Copy%20of%20FOS%20June%202022%20Article%20Graphics_0.png" title="How To Reduce CO2 Emissions In Your Value Chain" class="colorbox" rel="gallery-node-2220-fdq7tN1590g"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Copy%20of%20FOS%20June%202022%20Article%20Graphics_0.png?itok=7WVdPLTe" width="624" height="325" alt="How To Reduce CO2 Emissions In Your Value Chain" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <div> <div><em>&quot;The majority of a company&#39;s carbon emissions occur in its value chain. By engaging your suppliers in carbon reduction, you can contribute to the fight against climate change while keeping your businesses competitive and legally compliant,&rdquo; says Kristian Rönn, Co-Founder and CEO of <a href="https://normative.io" target="_blank">Normative</a>. Kristian shares deep insight into working closely with your value chain and three main approaches to engaging suppliers.</em></div> </div> <p>&nbsp;</p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/addressing-carbon-emissions-in-the-supply-chain-through-a-circular-economy">Addressing Carbon Emissions in the Supply Chain Through a Circular Economy</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <div>Climate change will not wait, and companies need to enact immediate and drastic emission reductions if we are to meet global climate targets.&nbsp;<span style="font-size: 13.008px;">If your company is like most others, most of your emissions will originate in your value chain, including both the upstream emissions from your supply chain and the downstream emissions from product use and disposal.</span></div> <div>&nbsp;</div> <div>Because they don&rsquo;t originate directly from your company&rsquo;s activities, these emissions are tricky to measure and even trickier to reduce. However,&nbsp;<strong style="font-size: 13.008px;"><a href="https://cdn.cdp.net/cdp-production/cms/reports/documents/000/005/554/original/CDP_SC_Report_2020.pdf?1614160765">according to the CDP</a></strong>, it&rsquo;s vital to do so as these value chain emissions account for an average of around 90% of a business&rsquo; total carbon footprint.&nbsp;</div> <div>&nbsp;</div> <div>So, if your company is looking to reduce its climate impact, logic says you should begin by making high-impact changes in your supply chain. Add in that reducing emissions could also result in substantial cost reductions and efficiency gains, plus earning the trust of investors and employees, and you&rsquo;ll likely want to get started as soon as possible.</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <h2>Reduction Begins With Measurement</h2> <p>The first step toward reduction is to measure these value chain emissions fully. The most time-efficient way to achieve comprehensive and accurate emissions measurements is to use a carbon accounting platform.</p> <div>Once you have measured your emissions and identified your hotspots, devise a strategy for engagement and prioritization. Value chain engagement can take many forms: engaging your suppliers, switching to low-carbon financial investments, decarbonizing your product and service design, or implementing circular economy principles.</div> <div>&nbsp;</div> <div>For many companies, suppliers account for a large share of value chain emissions. So, in the following section, we&rsquo;ll explore methods businesses can use to engage their suppliers and reduce their value chain emissions.</div> <div>&nbsp;</div> <div>&nbsp;</div> <div>&nbsp;</div> <h2>Engaging Your Suppliers</h2> <div>Supplier engagement is a key mechanism to affect impactful emissions reduction &mdash; and those who work in procurement and sourcing are perfectly placed to begin this supplier engagement.&nbsp;<span style="font-size: 13.008px;">At Normative, we recommend three main approaches to engaging suppliers, with varying levels of complexity:</span></div> <div>&nbsp;</div> <div><strong>Informative Approach</strong></div> <div style="margin-left: 40px;"><strong>Summary</strong>: Sharing best practices and materials on addressing emission reduction</div> <div style="margin-left: 40px;"><strong>Level of Complexity</strong>: Medium to Low. Medium involvement for the company. Suitable for all companies.&nbsp;</div> <div>&nbsp;</div> <div><strong>Passive Enforcing Approach</strong></div> <div style="margin-left: 40px;"><strong>Summary</strong>: Updating internal procurement guidelines to prioritize suppliers that comply with sustainability criteria</div> <div style="margin-left: 40px;"><strong>Level of Complexity</strong>: High. High level of involvement for the company. Suitable for larger, high-revenue companies.&nbsp;</div> <div>&nbsp;</div> <div><strong>Active Enforcing Approach</strong></div> <div style="margin-left: 40px;"><strong>Summary</strong>: Updating supplier Code of Conduct to make it mandatory for suppliers to disclose their emissions. Obligatory reduction targets.</div> <div style="margin-left: 40px;"><strong>Level of Complexity</strong>: High. High level of involvement for the company. Suitable for larger, high-revenue companies.&nbsp;</div> <div>&nbsp;</div> <div> <div>Good communication is a crucial part of successful supplier engagement. Explaining why climate performance insights are important to you helps to build trust and identify opportunities for collaboration and support.&nbsp;</div> <div>&nbsp;</div> <div>Some of your suppliers may already be making good progress toward emission reduction, whereas others may not know where to start. Ask suppliers whether they are tracking emissions and following reduction targets. Make sure to communicate to suppliers what&rsquo;s in it for them:&nbsp;</div> <ul> <li>Contributing to the fight against climate change</li> <li><span style="font-size: 13.008px;">Staying ahead of upcoming regulation</span></li> <li><span style="font-size: 13.008px;">It&rsquo;s good business &mdash; they&rsquo;ll gain competitive advantages and unlock funding</span></li> </ul> <div>For suppliers still in the early stages and lacking know-how, consider running information-sharing sessions such as webinars. Point suppliers toward third-party services that can help them get started.</div> <div>&nbsp;</div> <div>There are many ways of encouraging suppliers to track and reduce emissions. For example, you can have a supplier recognition program. Additionally, within your procurement team, you can prioritize low-emission suppliers or impose specific sustainability requirements on suppliers.</div> <div>&nbsp;</div> <div>At Normative, we work with companies to reduce their carbon footprints, with a special emphasis on value chain emissions. In our work, we see that many companies want to act but don&rsquo;t know where to start. The good news is that a little bit of strategic focus and target-setting goes a long way &mdash; jump-starting your emissions reduction journey and bringing in new business opportunities.</div> <div>&nbsp;</div> <div>Find more about engaging your value chain to reduce carbon emissions in&nbsp;<a href="https://normative.io/insight/value-chain-engagement/?utm_medium=referral&amp;utm_source=partner&amp;utm_campaign=VCE_download_Future_of_Sourcing" style="font-size: 13.008px;"><strong>Reducing value chain carbon emissions: a practical guide</strong></a>&nbsp;at <strong><a href="https://normative.io/" style="font-size: 13.008px;">Normative.io</a></strong></div> </div> <p>&nbsp;</p> </div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="How To Reduce CO2 Emissions In Your Value Chain - Future of Sourcing" addthis:url="https://futureofsourcing.com/how-to-reduce-co2-emissions-in-your-value-chain"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div></div></div> Mon, 10 Oct 2022 17:50:12 +0000 Kristian Rönn 2220 at https://futureofsourcing.com https://futureofsourcing.com/how-to-reduce-co2-emissions-in-your-value-chain#comments How Much Can You Expect to Spend for Nearshore IT Services? https://futureofsourcing.com/how-much-can-you-expect-to-spend-for-nearshore-it-services <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Nearshore%20IT%20Services.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/Nearshore%20IT%20Services.jpg" title="Nearshoring digital transformation projects is becoming the fastest route to success for today’s businesses given the great worker resignation and the tech talent shortage." class="colorbox" rel="gallery-node-2154-fdq7tN1590g"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Nearshore%20IT%20Services.jpg?itok=XHWTtJqA" width="624" height="325" alt="Nearshoring digital transformation projects is becoming the fastest route to success for today’s businesses given the great worker resignation and the tech talent shortage." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Nearshoring digital transformation projects is becoming the fastest route to success for today&rsquo;s businesses given the great worker resignation and the tech talent shortage, says Carlos Meléndez, COO and Co-Founder of Wovenware. He shares four key considerations to select the right nearshore partner.&nbsp;</em></p> </div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>According to an <a href="https://www.wsj.com/articles/tech-talent-shortage-is-helping-drive-m-a-deals-11644235210" target="_blank">article</a> in the <em>Wall Street Journal</em>, citing analysis by COMPTIA, in January 2022 employers posted close to 340,000 unfilled IT job openings, which was 11% higher than the 12-month average. The huge demand for software and AI expertise can be attributed to heightened demand for IT services brought on by the pandemic, but also a growing tech talent shortage that has been in the works for some time.</p> <p>As a result, tech professionals are in the driver&rsquo;s seat when it comes to increased compensation. <a href="https://www.cnbc.com/2021/11/01/how-much-3-software-engineers-earn-around-the-us.html" target="_blank">According to a CNBC Make It news story</a>, &ldquo;U.S. tech workers earned an average salary of $146,000 per year in 2020, and it can go much higher in competitive markets like San Francisco or New York.&rdquo;</p> <p>It&rsquo;s difficult and expensive to find qualified candidates for internal IT positions. Companies everywhere are now recognizing a dramatic shift in how work is conducted via distributed work models and they&rsquo;re redefining what constitutes a team.</p> <p>Companies have not only become more accustomed to managing off-site teams, but they are recognizing that they&rsquo;re not losing productivity because of where team members are located. Nearshoring &ndash; especially when it comes to IT services &ndash; is on the rise as a result. Companies are seeing that nearshore partners were already adept at working remotely and becoming part of a distributed team long before COVID-19 hit.</p> <p>In fact, according to the <a href="https://www.accelerance.com/accelerance-2022-software-outsourcing-trends-and-rates-guide" target="_blank">Accelerance 2022 Global Software Outsourcing Trends &amp; Rates Guide</a>, the outlook for outsourcing in general is strong, and a projected five-year revenue growth streak in software application outsourcing is still on track. According to the firm&rsquo;s research, 64% of IT executives say they need outside expertise for digital transformation initiatives.</p> <h2>From Low-Cost Alternative to Strategic Partnership</h2> <p>While the offshore model of outsourcing has been traditionally less expensive for companies than nearshore or onshore models, rates are increasing across all models of outsourcing as it becomes a viable solution to meeting IT goals and digital transformation initiatives. Even with the rising rates, outsourcing continues to be a lower cost alternative to in-house software development given the rising cost of highly specialized professionals for in-house positions.</p> <p>Nearshore increasingly is becoming the preferred outsourcing model because it provides the best of both worlds &ndash; lower costs than traditional tech hubs like San Francisco or New York (50% less expensive), but closer proximity and easier collaboration than far-flung regions like India or Asia.</p> <p>So what can companies looking to fill key IT positions via the nearshoring route expect to pay? A general digital transformation development sprint, conducted over three to four weeks, could range from $25,000 to $30,000. The development of a basic chatbot to be used to automate customer service functions could average $15,000.</p> <p>These types of one-off projects are one model, but there also can be more long-term partnerships where IT teams are comprised of internal and nearshore experts who assimilate into a long-term partnership for extensive digital transformation initiatives.&nbsp;</p> <p>According to <a href="https://www.accelerance.com/accelerance-2022-software-outsourcing-trends-and-rates-guide" target="_blank">recent research</a>, hourly rates for nearshore services vary widely depending on the role, but for a lead developer in Latin America, a company can expect to spend anywhere from $56 to $105 per hour on average.&nbsp;</p> <h2>The True Cost of Nearshoring</h2> <p>Yet, while cost is important, companies that focus only on cost can do themselves a great injustice. Often, looking to cut corners, they can incur greater costs when projects are left incomplete or fail to meet end-user expectations.</p> <p>And, when it comes to highly regulated industries, such as government and healthcare, privacy and compliance to industry regulations becomes critical and can incur hefty fines and loss of brand reputation when mistakes occur because of less than stellar partners.</p> <p>The relationship between a nearshore firm and its client has changed drastically. The job no longer goes to the lowest bidder because companies are looking for a strategic partner with qualified team members willing to blend seamlessly into the internal team.&nbsp;&nbsp;</p> <p>Given the changing relationship, below are key considerations that should factor into any decision about selecting a nearshore partner.</p> <h3>1. Experience in Your Specific Project</h3> <p>Whichever nearshore firm you choose should not only tout extensive technology expertise, but experience in your specific project and industry. For example, a firm that has helped another insurance firm deploy predictive AI to address customer churn can apply lessons learned and best practices to help you reach the finish line faster with less glitches.</p> <h3>2. It&rsquo;s Not Only Expertise but Compatibility That&rsquo;s Important</h3> <p>While asking for the credentials, expertise and certifications of each team member involved in your project is important, but it&rsquo;s equally important that they have the same work ethic, work style and corporate culture as your own.</p> <h3>3. Seamless Integration With an Existing Team</h3> <p>Often, outsourcing options are explored only after digital transformation projects have been initiated internally, and found to be lacking the required resources. It&rsquo;s important to understand how quickly each new team member can ramp up and blend seamlessly into your existing team with minimal disruption.</p> <h3>4. Quality Digital Transformation Projects From Design Through Development</h3> <p>Your nearshore partner should be able to provide you with the full lifecycle of services &ndash; from designing a solution that will meet real needs to development and deployment of the solution. Switching from different firms to provide each stage can not only lengthen the duration of the project because of technical transfer, but it also creates disconnected projects that can cost much more than if accomplished by one firm.&nbsp; &nbsp;&nbsp;</p> <p>Outsourcing and nearshoring digital transformation projects is becoming the fastest route to success for today&rsquo;s businesses given the great worker resignation and the tech talent shortage. With careful planning, the lines between remote and internal staff and outsourced partners will blur and simply become a unified team working toward a common destination &ndash; successful business outcomes.&nbsp; &nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/digital-transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Digital Transformation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/wovenware" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Wovenware</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/nearshore" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Nearshore</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/it-outsourcing" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">IT Outsourcing</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="How Much Can You Expect to Spend for Nearshore IT Services? - Future of Sourcing" addthis:url="https://futureofsourcing.com/how-much-can-you-expect-to-spend-for-nearshore-it-services"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div><div class="field-item odd"><a href="/regions/latinamerica-caribbean" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Latin America/Caribbean</a></div></div></div> Mon, 21 Mar 2022 02:00:00 +0000 Carlos Meléndez 2154 at https://futureofsourcing.com https://futureofsourcing.com/how-much-can-you-expect-to-spend-for-nearshore-it-services#comments Sourcing Disruption to Continue In 2022 https://futureofsourcing.com/sourcing-disruption-to-continue-in-2022 <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Sourcing%20Disruption%20to%20Continue%20In%202022%20%20Breteau.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/Sourcing%20Disruption%20to%20Continue%20In%202022%20%20Breteau.jpg" title="While 2021 was a bust for many who hoped that supply chain disruptions would abate, it appears the trend will continue well into 2022." class="colorbox" rel="gallery-node-2144-fdq7tN1590g"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Sourcing%20Disruption%20to%20Continue%20In%202022%20%20Breteau.jpg?itok=8Fo4AHZ6" width="624" height="325" alt="While 2021 was a bust for many who hoped that supply chain disruptions would abate, it appears the trend will continue well into 2022." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>While 2021 was a bust for many who hoped that supply chain disruptions would abate, it appears the trend will continue well into 2022 says QIMA&#39;s&nbsp;Sébastien Breteau. He shares recent data that sheds light on sourcing diversification activities in China, Vietnam and India, as well as troubling data on human rights and worker safety.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/five-technologies-to-future-proof-supply-chain-inspections">Five Technologies to Future Proof Supply Chain Inspections</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <h1>Sourcing Disruption to Continue In 2022&nbsp;</h1> <p>A volatile 2021 taught businesses a tough lesson about the fragility of supply chains. Just when many thought we were out of the woods, the promising trends toward recovery reversed. Supply chains quickly snapped amid the resurgence of COVID-19 outbreaks, China&rsquo;s utility crisis, logistics woes, labor issues, and mass supply shortages.</p> <p>In more positive news, consumer demand is strong. Even against records shortages, consumers splurged during the holiday season, and spending hit an all-time high in the United States according to the <a href="https://www.cnbc.com/2021/12/03/holiday-shopping-2021-spending-set-to-blow-past-records-nrf-says.html" target="_blank">National Retail Federation</a> (NRF). After predicting a year-on-year increase of 8.5% to 10.5%, NRF revised this figure to a whopping 11.5%, affirming consumer appetite to spend.</p> <p>However, with supply still short, this means unprepared businesses are missing out on a big opportunity to seize consumer demand.</p> <p>While some of the media headlines positioned the supply chains&rsquo; issues as a &ldquo;<a href="https://www.npr.org/2021/12/13/1063901970/the-toymakers-supply-chain-nightmare-before-christmas" target="_blank">nightmare before Christmas</a>,&rdquo; recent data from QIMA suggests that the disruption is poised to linger long into 2022. Businesses should take note of the following trends, as they are projected to shape the sourcing landscape this year.</p> <h2>China Sourcing Veers Off Track, but Recovery in 2022 is Still Possible</h2> <p>Reflecting a pattern observed in many of Asia&rsquo;s sourcing markets in 2021, China flaunted a remarkable rebound in the first half of the year as it outpaced most other countries in containing the virus.</p> <p>While this success stuttered in Q3 onwards in Asia at large, the world&rsquo;s leading manufacturing market is showing itself to be even more resilient compared to its regional competition. Notably, inspection and audit demand in China exploded +21.5% in 2021 over 2020. This growth even trounced pre-pandemic 2019 by +13%.</p> <p>Unfortunately for China, though, the second half of 2021 proved disappointing for its giant manufacturing industry as widespread power outages shut down factories and stymied orders. Adding salt to the wound, the blackouts happened in September &ndash; just as factories were looking to fill holiday orders from their buyers.&nbsp;</p> <p>However, demand for inspection and audits in China rebounded relatively quickly in most major consumer goods categories, including textile/apparel, toys and homeware. An important exception was the electronics and electricals industry, which has seen inspection and audit demand diminish steadily since May 2021. This is happening as more electronic manufacturers feel the pain of the global semiconductor chip shortage.</p> <p>QIMA data on inspections and audits reflects caution from Western buyers, with buyers being hesitant to expand sourcing in China throughout 2021. Instead of returning to China in droves, the data suggests many buyers simply maintained their existing business relationships with Chinese manufacturers. Subsequently, China&rsquo;s share among the top-five sourcing regions of both U.S.- and EU-based buyers in 2021 remained at a three-year low.</p> <p>China&rsquo;s sourcing patterns in 2021 foreshadow a post-pandemic recovery that, while not being derailed completely, has veered off track. In addition, power outrages may remain a threat in upcoming months. Accompanying this threat, the upcoming Winter Olympics in Beijing may impose further manufacturing restrictions in northern China. Subsequently, while there is reason to be optimistic for China&rsquo;s sourcing footprint in 2022, buyers should nonetheless heed caution and be prepared for further disruption.</p> <h2>Vietnam&rsquo;s Boom and Bust Reflects Buyer Hesitation</h2> <p>The collapse of sourcing in Vietnam in 2021 sheds light on how volatile the modern global sourcing landscape is, revealing the compounding effects of pandemic-related disruptions.</p> <p>In the first half of 2021, Vietnam experienced a tremendous growth spurt as enthusiastic buyers from the West eagerly flocked back to a familiar sourcing market that had been enjoying much attention pre-pandemic. In January through June 2021 &ndash; a period where Vietnam was successfully containing the spread of the virus &ndash; QIMA recorded a robust +67% growth versus pre-pandemic 2019.</p> <p>This rosy success story was interrupted in late July by the arrival of the Delta variant, when the country entered a stifling lockdown period. The latest data from QIMA shows Vietnam&#39;s manufacturing industry remained sluggish through the end of the year, even though the virus containment measures were lifted in October.&nbsp;</p> <p>Sharp labor shortages are likely a factor in Vietnam&rsquo;s slow path to recovery, as factory staff left the cities en masse. This left a shocking shortage of over 100,000 workers in the south of Vietnam. As a result, in late November, over a third of factories in Vietnam were reported to be operating below 80% capacity. In many cases, orders were even being delayed by more than eight weeks.</p> <p>The footwear and apparel sector in Vietnam has been among the hardest hit by the lockdowns and accompanying labor shortages, with inspection and audit demand plummeting -29% year-over-year in the fourth quarter. As a result of this dramatic reversal of fortune, Vietnam inspections and audits grew by a modest 3% in the first half of 2021 compared to the double digit booms it tracked during the pre-pandemic period. Based on this lethargic rebound, Vietnam&#39;s recovery is expected to be gradual and should last well into 2022.</p> <h2>India Enjoys the Benefit of Sourcing Diversification</h2> <p>Even though <a href="https://thediplomat.com/2021/08/the-rcep-conundrum-japan-awaits-indias-return/" target="_blank">India infamously bowed out</a> of the recently launched Regional Comprehensive Economic Partnership (RCEP) free-trade agreement, it&rsquo;s nonetheless experiencing exciting new surges in sourcing. Acclaimed by experts as an increasingly attractive sourcing market among many product categories, recent QIMA data shows buyers are shifting their gaze from China and making India a preferred alternative sourcing market.</p> <p>When comparing 2021 to the pre-pandemic period, the South Asia region at large flaunted double-digit expansion in inspection and audit demand. But India, specifically, has emerged as the conclusive favorite &ndash; outperforming its neighbors and the region as a whole in three out of four quarters of the year.</p> <p>India&#39;s newfound success can be attributed to surging interest among U.S.-based brands by and large: QIMA survey data shows the share of buyers naming India among their top-five sourcing regions nearly doubled in 2021 compared to 2019.</p> <p>After crossing the 2021 finish line with an impressive overall +60% spike in inspection and audit demand compared to pre-pandemic 2019, this figure astoundingly jumped +129% among U.S.-based buyers. Now, the next test for India is whether it can combat the threat of Omicron and keep the momentum going in 2022.</p> <h2>Sourcing Volatility is Wreaking Havoc on Human Rights and Worker Safety</h2> <p>Against the turbulent headwinds of the pandemic, workers around the world face <a href="https://www.worldbank.org/en/news/press-release/2020/10/07/covid-19-to-add-as-many-as-150-million-extreme-poor-by-2021#:~:text=The%20COVID%2D19%20pandemic%20is,severity%20of%20the%20economic%20contraction.">rising poverty and mass job losses</a> estimated to be around four times that seen during the 2008-2009 global financial crisis, according to a report released last year by the <a href="https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_766949/lang--en/index.htm">UN International Labour Organization</a>.</p> <p>Even though diversification helped many buyers navigate disruptions in the short term, 2021 saw ethical compliance in global supply chains crumble at an alarming rate. Factory scores clocked in at a four-year low and nearly a third (29%) of the factories QIMA audited were identified as being critically non-compliant and in need of immediate intervention. This represents the highest share since 2017.</p> <p>Due to specific challenges presented by the pandemic, violations were unsurprisingly extensive in areas related to health and safety. In this area, 2021 scores dropped -7.5% compared to 2020. QIMA also tracked rampant violations in the area of working hours and wages, with scores dropping -8% in 2021 compared to 2020.&nbsp;</p> <p>By geography, QIMA audit data indeed shows deteriorating ethical scores in many key sourcing markets &ndash; especially in Southeast Asia. For example, Myanmar is among the worst offenders in the world: its 2021 ethical scores plunged -18% compared to 2020.</p> <p>These disheartening trends in human rights and worker safety are perhaps all too unsurprising and familiar. Unfortunately, data from recent years have shown human rights and ethical compliance falling by the wayside more and more as businesses are forced to operate in survival mode, prioritize cost concerns and diversify sourcing to less familiar geographies.</p> <p>We saw ethical compliance drop first during the throes of the U.S.-China trade war. Now the decline in ethical compliance continues to rear its ugly head during the pandemic and the ongoing supply chain crunch.&nbsp;&nbsp;</p> <h2>Looking Ahead</h2> <p>After a devastating 2020, many had placed their bets on 2021 being a year of recovery and a return to the pre-pandemic normal. Despite some glimmers of hope, the year did not live up to these expectations. Moreover, by some measures of sourcing metrics &ndash; such as ethical compliance &ndash; the situation became even more bleak.&nbsp;&nbsp;</p> <p>Amid new COVID-19 variants, disparate vaccination rates and varying regional approaches to virus containment, the pandemic continues to burden global supply chains. When you combine this with the woes of raw material shortages, logistics hurdles, labor issues and rapidly escalating ethical risks, global supply chains are expected to remain volatile throughout 2022.</p> <p>The struggles businesses have faced thus far do not have to be all for naught, as there have been many teaching moments throughout the pandemic. If emerging supply chain trends are kept top of mind, businesses will be able to exercise higher levels of agility and resilience &ndash; and nimbly adapt to the everchanging sourcing landscape.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/compliance" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Compliance</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/qima" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">QIMA</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/covid-19" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">COVID-19</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Sourcing Disruption to Continue In 2022 - Future of Sourcing" addthis:url="https://futureofsourcing.com/sourcing-disruption-to-continue-in-2022"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div><div class="field-item odd"><a href="/regions/asiapacific" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Asia/Pacific</a></div></div></div> Thu, 03 Mar 2022 17:00:00 +0000 Sébastien Breteau 2144 at https://futureofsourcing.com https://futureofsourcing.com/sourcing-disruption-to-continue-in-2022#comments 7 Takeaways From the 2021 Hackett 1000 Research Study https://futureofsourcing.com/7-takeaways-from-the-2021-hackett-1000-research-study <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/7%20Takeaways%20from%20the%202021%20Hackett%201000%20Research%20Study.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/7%20Takeaways%20from%20the%202021%20Hackett%201000%20Research%20Study.jpg" title="Seven findings from the annual report and his analysis for sourcing, procurement and supply chain teams." class="colorbox" rel="gallery-node-2126-fdq7tN1590g"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/7%20Takeaways%20from%20the%202021%20Hackett%201000%20Research%20Study.jpg?itok=HMGE4a7f" width="624" height="325" alt="Seven findings from the annual report and his analysis for sourcing, procurement and supply chain teams." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>Working capital improved in the first nine months of 2021, but key opportunities remain says Craig Bailey, an Associate Principal with The Hackett Group and an expert in working capital and supply chain issues. He shares seven findings from the annual report and his analysis for sourcing, procurement and supply chain teams.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/how-digital-world-class-procurement-organizations-outperform-peers">How Digital World-Class Procurement Organizations Outperform Peers</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The Hackett Group&rsquo;s annual working capital research &ndash; The Hackett 1000 &ndash; shows that the largest public U.S. companies have run a tight ship during the crisis, employing cash and working capital management strategies to increase liquidity and cash on hand as they navigate uncertainty and demand shocks. Nevertheless, those companies collectively had nearly $1.3 trillion of excess cash tied up in working capital at the end of 2020.</p> <p>Given the continued state of flux as the pandemic plays out, demand recovers and supply chain issues persist, The Hackett Group updated its annual working capital research at the end of the third quarter of 2021. This new analysis looked at changes in cash and working capital metrics during the first nine months of the year. It found evidence of improvement. But not surprisingly, it also showed significant variances by industry &ndash; with some sectors improving while others still face significant challenges.</p> <h2>7 Key Changes During the First Nine Months of 2021</h2> <h3>Revenue Rebounded</h3> <p>Among the companies analyzed, revenue increased 14% in the first nine months of 2021. Of the 48 industries in the study, 38 experienced revenue growth. Top-performing sectors &ndash; such as airlines, oil and gas, and hotels and hospitality &ndash; saw revenue growth in excess of 25% during that period.</p> <p>Price increases drove revenue growth in some sectors, such as lumber, steel, oil and building products. On the other hand, material shortages and changing consumer demand patterns limited revenue recovery in other sectors. Motor vehicles and auto parts, telecommunications and internet retail were among those with revenue decreases.</p> <h3>Working Capital Performance Improved</h3> <p>Cash conversion cycle (CCC) &ndash; the combined measure of working capital &ndash; fell to 29.9 days from 33.4 days, a 10% improvement.</p> <h3>Inventory Levels Increased</h3> <p>Inventory increased by 11% in the first nine months of 2021, but days inventory outstanding (DIO) remained flat as cost of goods sold (COGS) grew at the same rate through the end of the third quarter.</p> <p>Key factors affecting performance include rising materials costs, product availability and changing consumer demand. For example, material shortages and supply chain issues constrained product availability and, thus, revenue, in the motor vehicles, auto parts and recreational products sectors.</p> <p>Companies in electrical appliances and consumer durables built up inventory stock as supply chains replenished the network. Several sectors &ndash; including airlines, hotels and hospitality, marine shipping, and oil and gas &ndash; registered DIO improvements, largely due to external factors rather than intentional inventory rebalancing.</p> <h3>Companies Moved to Optimize Payment Terms</h3> <p>Accounts payable increased 15% in the first nine months of 2021, while days payables outstanding (DPO) increased to 57.6 days from 55.4 days, a 4% improvement &ndash; evidence that companies have extended payments to suppliers to improve their own cash flow.</p> <p>Key factors affecting performance included rising material costs and increased purchasing volumes as consumer demand returned. Industries with DPO increases included those where higher accounts payable balances outpaced increases in COGS, such as textiles, apparel and footwear, beverages, homebuilding and machinery.</p> <p>In the motor vehicles and internet and catalog retail sectors, revenue declines outpaced decreases in accounts payable. DPO increased in the pharmaceutical, utilities and marine shipping industries as COGS outpaced growth in accounts payable balances.</p> <h3>Collections Accelerated Slightly</h3> <p>Accounts receivable increased by 11%, while days sales outstanding (DSO) decreased from 44.4 to 43.1 days &ndash; a slight improvement &ndash; as revenue increases outpaced the increase in open accounts receivable balances. Many companies strengthened credit and risk management and explored customers&rsquo; ability to pay up front.</p> <h3>Overall Cash and Debt Levels Both Decreased 1%</h3> <p>Cash decreases are largely the result of increased operating cash flows, capital expenditures and debt repayment. Some industries &ndash; for example, pulp, paper and forest products; air freight and couriers; airlines; oil and gas; and semiconductors &ndash; recorded cash increases due to price increases and/or increased demand.</p> <p>Debt decreases, which were greatest in industries such as pulp and paper and textiles, were primarily due to early payment of debt, enabled by increases in operating cash. Some sectors, particularly telecommunications, saw debt grow due to increased capital expenditures.</p> <h3>Implications for Sourcing and Supply Chain Functions</h3> <p>Optimism is returning as demand drives revenue improvement. But volatility and uncertainty aren&rsquo;t going away quite yet. Sourcing and procurement processes have a direct influence on cash flow and working capital, particularly inventory and accounts payable, so it is important to maintain diligence and strategic management around these areas.</p> <p>In 2022, supply disruptions will continue to impact top-line sales in some sectors and margin pressure will remain. Organizations will need to balance inventory levels with service levels. Companies should revisit current planning parameters and inventory levels to look for quick-win opportunities to release cash for strategic investments.</p> <p>This is also a good time to conduct a supply chain risk assessment to identify weak links, including implications for strategic inventories in the short run and sources in the midterm to longer term. Assessments should also look at demand spikes and supply limitations to make sure cash is not invested in the wrong inventory and incorporate cost and margin criteria for making stockkeeping unit/product prioritization decisions.</p> <p>On the accounts payable side, analysis of supply base risks and payment performance can reveal opportunities to further optimize payment terms. Mapping of payment terms by supplier category and region should encompass goods receipts, invoice timing and payment runs, as well as opportunities to eliminate early payments. There also may be opportunities to introduce liquidity mechanisms into the supply chain to ensure its stability and investigate dual-sourcing options to ensure supply continuity.</p> <p>As companies continue to optimize their supply chains by making changes such as reducing inventory, cutting back on product offerings, and/or diversifying vendors, taking a cross-functional approach is critical. Otherwise, improvement will be stalled by conflicting demands of internal stakeholders such as manufacturing, sales and finance.</p> <p>Finally, improving sourcing and supply chain agility requires good insight. Therefore, accelerating initiatives to increase supply chain visibility and improve analytical, modeling and reporting capabilities &ndash; both technology and talent &ndash; will pay dividends.</p> <h2>About the Research</h2> <p>The Hackett 1000 is an annual analysis of cost and cash performance based on publicly available annual financial statements of the 1,000 largest nonfinancial companies with headquarters in the United States. The report takes an industry-based approach to ranking companies according to selling, general and administrative (SG&amp;A) expense, as well as the four key working capital metrics: DSO, DIO, DPO and CCC. The 2021 Q3 update includes data from more than 900 companies that were part of the 2021 Hackett 1000.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/the-hackett-group" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">The Hackett Group</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/inflation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Inflation</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/digital-transformation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Digital Transformation</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="7 Takeaways From the 2021 Hackett 1000 Research Study - Future of Sourcing" addthis:url="https://futureofsourcing.com/7-takeaways-from-the-2021-hackett-1000-research-study"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div></div></div> Wed, 09 Feb 2022 02:00:00 +0000 Craig Bailey 2126 at https://futureofsourcing.com https://futureofsourcing.com/7-takeaways-from-the-2021-hackett-1000-research-study#comments How Energy Performance Contracting Creates Savings https://futureofsourcing.com/how-energy-performance-contracting-creates-savings <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/To%20Fix%20One%20Problem%20for%20Some%2C%20This%20District%20Solved%20More%20for%20All.png"><a href="https://futureofsourcing.com/sites/default/files/articles/To%20Fix%20One%20Problem%20for%20Some%2C%20This%20District%20Solved%20More%20for%20All.png" title="A decades-old ventilation issue leads to improved science labs and athletic facilities for schools." class="colorbox" rel="gallery-node-1940-fdq7tN1590g"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/To%20Fix%20One%20Problem%20for%20Some%2C%20This%20District%20Solved%20More%20for%20All.png?itok=OdtTIUR8" width="624" height="325" alt="A decades-old ventilation issue leads to improved science labs and athletic facilities for schools." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <h1>How Energy Performance Contracting Creates Savings</h1> <h1><em style="font-size: 13.008px; font-weight: normal;">A decades-old ventilation issue leads to improved science labs and athletic facilities for schools.</em></h1> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/how-energy-performance-contracting-eliminates-wasteful-spending">How Energy Performance Contracting Eliminates Wasteful Spending</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The Board of Directors for McKeesport Area School District had a problem. The main high school building was completed in 1961 without air conditioning (AC), and every contractor and company was submitting bids to install it that the district couldn&rsquo;t accept. The space wasn&rsquo;t designed with an AC system in mind, and construction issues from roof plenums to piping kept the price tag too high. Students and teachers labored to learn with non-optimal temperature and airflow, while the cost to remedy it remained, literally, through the roof.&nbsp;</p> <p>The answer, in the end, wasn&rsquo;t bringing down the price. Those contractors and companies weren&rsquo;t exaggerating &ndash; the older but beloved building&rsquo;s design challenges demanded extensive work. The real roadblock was how to pay for what McKeesport&rsquo;s high school needed, while making sure funds for other schools, and other students across the community, weren&rsquo;t unfairly impinged.&nbsp;</p> <p>As financial stewards of their community resources, the school board decided to focus on a solution with a guaranteed outcome. They wanted a firm, fixed price without change orders.&nbsp;</p> <p>That guarantee became possible with an energy performance contract. And the financial structure of an energy project brought something else to the table they needed: funding.</p> <h2>Not Your Standard Energy Project</h2> <p>Energy savings performance contracts usually pay for upgrades with guaranteed savings, freeing much-needed funds trapped in energy and operational spending to fuel improvements. Many measures contribute to that savings, with HVAC and lighting efficiency often leading the list. McKeesport High School, however, didn&rsquo;t have an air conditioning system to replace, so that facility&rsquo;s energy budget wasn&rsquo;t bloated by inefficient AC. That savings would have to come from somewhere else.</p> <p>What McKeesport did have was more schools and learning environments in need of updates. At first glance, what looked like a list of additional costs in the eyes of an energy project engineer was a list of opportunities to create savings. To make up for the energy spend added by the new AC, an energy performance contract could generate savings across the district with improvements in multiple facilities.&nbsp;</p> <p>That also broke down another key roadblock to previous solutions, because bids to fix the high school&rsquo;s ventilation problem were always just an expense focused solely on the high school. An energy project that delivered infrastructure upgrades to every school would mean improvements and benefits for all the students across the community.&nbsp;</p> <h2>When More Is More</h2> <p>Making the project bigger than one AC system opened the door to addressing other student needs. The funding solution for McKeesport&rsquo;s energy project expanded to improve ventilation quality and efficiency in multiple schools, but didn&rsquo;t stop there. There were other priority projects that hadn&rsquo;t been able to fit in their recent capital plans. McKeesport asked its energy project partner to help the district also achieve improvements to school labs and athletic facilities.</p> <p>In total, $7.8 million in energy and operating cost savings were identified to allow McKeesport the power to put that bigger slate of improvements in place. McKeesport was able to renovate four science labs, including gas valves, sinks and work surfaces and critical safety equipment: fume hoods and eyewash stations.</p> <p>Stadium facilities were repaired and weatherproofed. Locker rooms for the high school and McKeesport Stadium were renovated, with upgrades and repairs to flooring, plumbing and lockers. The project was able to fund a new track surface, which restored the district&rsquo;s eligibility to host WPIAL (Western Pennsylvania Interscholastic Athletic League) events. Additionally, window and wall damage repairs at Founders Hall Middle School helped to seal the building envelope for that facility, a positive impact on HVAC energy use, and an existing geothermal system at Twin Rivers Elementary was upgraded with a new control system, putting a previous sustainability project back in the win column.&nbsp;</p> <h2>Creating the Savings</h2> <p>The energy conservation measures for educational and athletic spaces included retrofitting and replacing lighting with efficient LED technology and upgrading building automation systems at every MASD school. Boiler plant controls were upgraded and domestic water heaters were replaced. HVAC systems were replaced or upgraded. Building automation systems were integrated into a web of new controllers and sensors, all tied into a web-based management system the district&rsquo;s facility leaders can use to monitor the system closely and drive more efficiency.</p> <p>Water conservation and electrical safety measures also made contributions. A rainwater harvesting system was repaired at Twin Rivers Elementary, and oversized transformers were replaced for more energy-efficient power distribution systems in three of the four schools. A new pool heater was installed, rated for 98% thermal efficiency. The measures and specific equipment engineered for each space were different, but each energy-efficient HVAC or lighting upgrade contributed to the cost savings and learning space improvements.&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;</p> <h2>Ready to Move Forward</h2> <p>McKeesport Area High School received the modifications it needed to house a new air-conditioning system. The required on-site construction and piping was completed, and the air conditioning equipment, ducts and controls were installed, all as part of project that helped them address their funding needs.&nbsp;</p> <p>The Board of Directors had a solution to their cooling and ventilation problem, and with it, they&rsquo;d achieved additional improvements to school facilities that had been waiting in the wings. With an energy project moving a years-old issue to the win column, without adding new fiscal burdens to their community, McKeesport Area School District leaders had saved future energy and capital for moving forward.&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/energy-performance" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">energy performance</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/water-conservation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">water conservation</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/infrastructure" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Infrastructure</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="How Energy Performance Contracting Creates Savings - Future of Sourcing" addthis:url="https://futureofsourcing.com/how-energy-performance-contracting-creates-savings"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div></div></div> Thu, 18 Mar 2021 02:00:00 +0000 Joel Lowery 1940 at https://futureofsourcing.com https://futureofsourcing.com/how-energy-performance-contracting-creates-savings#comments Are Independent Contractors Covered by Workers’ Comp Insurance? https://futureofsourcing.com/are-independent-contractors-covered-by-workers-comp-insurance <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Are%20Independent%20Contractors%20Covered%20by%20Workers%E2%80%99%20Comp%20Insurance.png"><a href="https://futureofsourcing.com/sites/default/files/articles/Are%20Independent%20Contractors%20Covered%20by%20Workers%E2%80%99%20Comp%20Insurance.png" title="Independent contractors are workers who offer their services to a business but are not considered employees." class="colorbox" rel="gallery-node-1930-fdq7tN1590g"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Are%20Independent%20Contractors%20Covered%20by%20Workers%E2%80%99%20Comp%20Insurance.png?itok=k5rKWSk8" width="624" height="325" alt="Independent contractors are workers who offer their services to a business but are not considered employees." title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/commercial-insurance-buying-guide">Commercial Insurance Buying Guide</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <h1>Are Independent Contractors Covered by Workers&rsquo; Comp Insurance?</h1> <p>Independent contractors are workers who offer their services to a business but are not considered employees. As a result, they receive no benefits such as paid time off, sick pay and health insurance coverage. In addition, independent contractors must pay their own taxes, including self-employment taxes, at the end of each year. If you are an independent contractor, you and the businesses you work with may wonder how your independent contractor status affects workers&rsquo; comp insurance.</p> <h2>How Do You Know If You Are an Independent Contractor?</h2> <p>Although laws regarding the classification of independent contractors vary by state, and the sharing economy continues to blur the lines between employees and independent contractors, independent contractor/employee status typically can be determined by tax documents. Workers who receive a W-2 at the end of each year are considered employees, while workers who receive a 1099 are considered independent contractors.</p> <h2>Do Businesses Employing Independent Contractors Have to Provide Workers&rsquo; Compensation Insurance?</h2> <p>Usually, only workers who are considered employees fall under the jurisdiction of local workers&rsquo; comp laws. However, there are some states that require that businesses provide workers&rsquo; comp coverage for independent contractors. It&rsquo;s important to check the regulations regarding workers&rsquo; comp in your state to be sure you&rsquo;re in compliance.</p> <p>For businesses operating in states that require workers&rsquo; comp coverage for independent contractors, providing coverage is a matter of classifying employees and independent contractors correctly and abiding by the law. State penalties for noncompliance can vary, but knowing and abiding by local laws will ensure that business owners avoid costly fines and criminal charges.</p> <h2>Why Would Independent Contractors Purchase Their Own Workers&rsquo; Comp Insurance?</h2> <p>For the most part, independent contractors are not usually required by law to have workers&rsquo; comp insurance coverage. However, there are reasons that someone who is classified as an independent contractor would want or need to get a policy. First, some businesses require workers&rsquo; comp coverage before they will enter into an agreement with an independent contractor. This helps to mitigate the business&rsquo;s risk of liability and financial responsibility in the event that the independent contractor is injured while working.</p> <p>In addition, some independent contractors may choose to purchase their own workers&rsquo; comp coverage to help protect themselves against the financial risks associated with on-the-job injuries. If a self-employed person is injured at work, comprehensive workers&rsquo; compensation insurance can help cover the costs of medical bills, lost wages, and more. Having a personal workers&rsquo; comp policy is particularly important for independent contractors in high-risk industries, such as construction.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/workers-compensation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">workers compensation</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/independent-contractors" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">independent contractors</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/1099" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">1099</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Are Independent Contractors Covered by Workers&amp;rsquo; Comp Insurance? - Future of Sourcing" addthis:url="https://futureofsourcing.com/are-independent-contractors-covered-by-workers-comp-insurance"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div></div></div> Mon, 01 Mar 2021 17:09:00 +0000 Tracey Berg 1930 at https://futureofsourcing.com https://futureofsourcing.com/are-independent-contractors-covered-by-workers-comp-insurance#comments Interview - Addressing the Full Contingent Workforce Management Lifecycle https://futureofsourcing.com/interview-addressing-the-full-contingent-workforce-management-lifecycle <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Future-of-Sourcing_Kevin-Akeroyd_PRO-Unlimited.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/Future-of-Sourcing_Kevin-Akeroyd_PRO-Unlimited.jpg" title="Addressing the Full Contingent Workforce Management Lifecycle" class="colorbox" rel="gallery-node-1849-fdq7tN1590g"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Future-of-Sourcing_Kevin-Akeroyd_PRO-Unlimited.jpg?itok=QbiATKD_" width="1024" height="426" alt="Addressing the Full Contingent Workforce Management Lifecycle" title="" /></a></div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/direct-sourcing-and-digital-transformation-of-contingent-labor-programs">Direct Sourcing and Digital Transformation of Contingent Labor Programs</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>PRO Unlimited, a global innovator of contingent workforce management software and services, recently announced the appointment of&nbsp;<a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=2871737-1&amp;h=1501507708&amp;u=https%3A%2F%2Fwww.linkedin.com%2Fin%2Fkevinakeroyd%2F&amp;a=Kevin+Akeroyd" target="_blank">Kevin Akeroyd</a>&nbsp;as its Chief Executive Officer. Having run large business units at some of the tech industry&rsquo;s most successful, dynamic and innovative companies, including Oracle and Salesforce.com, Kevin is poised to further strengthen PRO Unlimited&rsquo;s position as an industry leader. Kevin recently shared his insights with the <em>Future of Sourcing</em> on why he chose to join PRO Unlimited, his vision for the company, and the transformation that&rsquo;s taking place within the contingent workforce management industry.</p> <p><strong>What interests you about the Contingent Workforce Management industry, and what specifically interested you about wanting to join PRO Unlimited?</strong></p> <p>The contingent workforce management industry is incredibly important right now. As the marketplace has evolved in recent years, contingent labor has emerged as the &ldquo;workforce of the future&rdquo; for both employees and the CHROs of employers. Beyond that, it&rsquo;s becoming such a large spend category that it&rsquo;s now an enterprise valuation driver, so it&rsquo;s front and center with the CFO. Looking back over the past 30 years, you have this industry that&rsquo;s gone from a small temp-staffing niche to a C-suite strategic priority, both from a talent and procurement standpoint, and a technology and innovation perspective.</p> <p>This platform, including the technology stack, is going to evolve, and more importantly it <u>needs</u> to evolve. The established Procurement/Spend Management and HCM platforms don&rsquo;t currently address the full contingent workforce management lifecycle. Furthermore, they aren&rsquo;t capable of managing its complexity, or harnessing the data to provide analytics and intelligence on companies&rsquo; contingent workforce segments that executives demand.</p> <p>PRO Unlimited is the market leader and is uniquely positioned to become the holistic platform for the industry. That&rsquo;s one of the main reasons I decided to not only make the jump to the contingent workforce management industry, but also to join PRO specifically. This company is incredibly well positioned in terms of technology, data/analytics, managed services and, most importantly, its people.</p> <p><strong>What expertise, successes and learnings from your previous positions and organizations are applicable to both PRO Unlimited and the success of its clients?</strong></p> <p>There are six key areas that I&rsquo;ll be focused on at PRO based on my previous roles and industries. They include the following:&nbsp;&nbsp;</p> <p>First, in the past I&rsquo;ve led companies where they went from only offering point solutions and made the evolution into holistic platforms. At PRO, we&rsquo;ll continue evolving our Managed Services Program (MSP), Data/Analytics, Integration Ecosystem and Vendor Management Software (VMS) offerings toward an even more comprehensive contingent workforce management platform that will continue to drive our clients&rsquo; program success as the marketplace shifts.&nbsp;</p> <p>Second, the scale player is going to win in this industry. The need for scale is critical, and that means scaling both organically and through M&amp;A. I&rsquo;ve run a number of large businesses that have gone through this explosive scale, and I&rsquo;m looking to apply many of these tenets and lessons learned to PRO as we look to widen the scale gap versus our competitors in the industry.&nbsp;</p> <p>Third, there&rsquo;s a global need for our software, data, analytics and services platform. Providers need to become more global as this industry expands and the use of contingent labor grows with both Fortune 500 and Global 2000 companies. I will draw upon my deep expertise in globalization to continue to expand and extend PRO&rsquo;s global reach.&nbsp;</p> <p>Fourth, I have been through several industry transformations, and the contingent workforce management industry is about to embark on its own transformation. As stated earlier, PRO is uniquely positioned to become the holistic platform for the industry by not only providing our solutions to our customers, but leading them up the maturity curve as they go through their own FTE to contingent transformations inside their companies.</p> <p>Fifth, the importance of Diversity and Inclusion (D&amp;I) needs to grow at scale worldwide inside of both large Fortune 500 and Global 2000 organizations. The platform we provide will continue to support moving D&amp;I front and center at companies, as well as us investing heavily in our own company on this mission-critical front. I have spent the last decade driving large-scale D&amp;I and social/corporate responsibility programs, and am excited to do that at PRO.</p> <p>Sixth, the importance of developing a holistic partnership ecosystem is critical to how PRO will grow and transform the industry. This ecosystem will be comprised of analytics, data, service and advisory, and technology partnerships.</p> <p><strong>What are PRO Unlimited&rsquo;s competitive differentiators, and how do you intend to exploit them for increased growth both strategically and operationally given PRO Unlimited&rsquo;s 30-year history of success?</strong></p> <p>First and foremost, the strengths of PRO reside in its people and talent. For 30 years, PRO has always had the best talent within the industry. Moving forward, we&rsquo;re going to continue evolving from the trusted advisor that has delivered program management, service delivery and flawless execution to a strategic advisory, intelligence and business decisioning partner leveraging our world-class best practices, insights, data and analytics.</p> <p>Second, PRO has industry-leading VMS technology that&rsquo;s been recognized and validated as best-in-class by leading third parties such as Gartner. We&rsquo;re going to leverage our highly configurable and interoperable platform, and tap into our deep network, to build a new ecosystem that clients will need as this industry evolves.&nbsp;</p> <p>Third, the importance of data, analytics and business intelligence has permeated every industry, and ours in no different. Our Strategy, Analytics and Metrics (SAM) team, coupled with the powerful analytics/intelligence SaaS solution we offer, will help propel new solutions that organizations will be able to use to elevate their contingent workforce management programs.&nbsp;</p> <p>Fourth, while we&rsquo;ve already established ourselves as a global leader, we&rsquo;ll continue to expand our footprint very aggressively and extend our lead over our competitors.</p> <p><strong>What trends do you anticipate that will influence the contingent workforce management space?&nbsp;</strong></p> <p>I see several trends taking form over the next several years. These include the continued preference of knowledge, specialized-skilled, white-collared workers across the globe to only be willing to work on a contingent basis, not FTE. This will be a career choice for many, which will radically accelerate the complexities of this segment. Companies will need to not only navigate these evolving areas at a rapid pace, but to also expertly address localization, globalization, changing regulatory and labor laws, remote work, and diversity and inclusion, among others.&nbsp;The notion of things like the &ldquo;gig economy&rdquo; is going to dramatically expand across virtually all categories of the skilled workforce, and in many industries, the leaders in those industries will have more contingent workers than they have FTEs.&nbsp;</p> <p>In addition, as the spend under management continues to expand, it will be mission critical for the C-suite to be more involved. Currently, for the most part, the selection and management of outsourcing a company&rsquo;s contingent workforce management program has been relegated as &ldquo;tactical&rdquo; and pushed fairly far down the organization&rsquo;s org chart. This will change as C-level executives will play a much greater role in the decision to not only outsource the non-employee management function, but also to deploy a technological ecosystem to harness data and intelligence to drive their businesses forward as part of their human capital strategy.&nbsp;Furthermore, the use of machine learning, artificial intelligence and other emergent technologies tied to both data analytics and VMS is going be more important than ever. They&rsquo;ll need to provide stakeholders with the ability to enhance sourcing, managing and tracking of the non-employee workforce by region and around the world.&nbsp;</p> <p>To this end, integration will be critical. The ability to span across siloes where vendors have lived for the past 30 years is going to be a more integral part of a much larger technology stack and services ecosystem. Being the platform that seamlessly interoperates with ERP, HCM, HRIS, P2P, and Data and Analytics systems will be paramount.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/contingent-workforce-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">contingent workforce management</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/c-suite" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">C-suite</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/vendor-management-software" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Vendor Management Software</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/managed-services-program" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Managed Services Program</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/diversity-and-inclusion" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Diversity and Inclusion</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Interview - Addressing the Full Contingent Workforce Management Lifecycle - Future of Sourcing" addthis:url="https://futureofsourcing.com/interview-addressing-the-full-contingent-workforce-management-lifecycle"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/north-america" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">North America</a></div></div></div> Wed, 09 Sep 2020 17:00:00 +0000 Kevin Akeroyd 1849 at https://futureofsourcing.com https://futureofsourcing.com/interview-addressing-the-full-contingent-workforce-management-lifecycle#comments