“‘How do you start and where do you begin with this?’ Measure. It starts with measurements. By getting measurements around it, that gives control. From control, we can drive process improvement. That’s really what it’s all about – driving better outcomes for the business, better buying optimization.” —Brian Salkowski, Chief Operating Officer at Guidant Global
Setting up an external talent management program is a complex undertaking for procurement, and there are usually multiple stakeholders – all with their own distinct sets of expectations and goals – that need to be considered along the way.
To give our audience a better understanding of how to handle this complexity and successfully launch and manage a services procurement program, Kelly Barner and I interviewed Guidant Global’s Chief Operating Officer Brian Salkowski and Marie France, their SVP of Client Relationships and a Procurement Operations Specialist.
According to Brian and Marie, there are four main components procurement should consider when managing services procurement: quality, relationships, compliance, and cost. Together, these serve as a kind of north star when it comes to measuring the effectiveness and success of a services procurement program.
4 Key Pillars of a Successful Services Procurement Program
Determining what quality looks like for your organization – the quality level of suppliers, talent, MSP providers, etc. – is the first success metric to establish for services procurement, say Brian and Marie.
Assurance of supply, especially when there is talent scarcity in the marketplace, is a critical component of defining quality and measuring success. Yes, competitive prices are important, but procurement needs to ensure that services are sustainable at a fair price.
“If we have the best price but no execution and no partners who will do it, we haven’t really accomplished anything,” said Brian.
Marie added to that by pointing out that when it comes to defining or measuring quality, many procurement organizations are afraid of losing influence or control within a statement of work. By looking ahead and always staying focused on the next evolution of the program, procurement can gain an even greater influence over the quality of services.
“It’s our [procurement’s] role to constantly determine how we can influence and how we can become better,” said Marie. “Don’t be comfortable with the status quo. Always think about what the next evolution within the program is.”
Building and nurturing good relationships with suppliers and stakeholders is always a high priority for procurement, but for services procurement it is particularly important to be fully transparent from the beginning because the supplier base is an extension of the business’s own workforce and of the organization.
The foundation of a good relationship, Marie says, is built on communication and transparency and a strong understanding of what the organization is trying to solve for, what the requirements are, and what success looks like.
“When talent is scarce and suppliers have a choice of customers, it is so important that we have partnership from day one. You need to be fully transparent around what’s going on within your organization and create connections,” said Marie.
Tactically, Brian pointed out, this requires procurement to take a little extra time at the start to understand the data, the requesters, the service users, and the consumers. Procurement will need the support of the whole business to undertake this kind of prep work. But, as he said, “a little extra time on the front end can generate significant benefits on the back.”
Procurement should also ask themselves a few key questions as part of this preparation:
- Are we managing our relationships with third-party vendors efficiently?
- How do we ensure that proper financial approvals are in place?
- If there are significant changes to scope which might place the organization at risk, are we making sure that everyone has an opportunity to chime in and ensure that they are right for the organization?
When building these relationships, Brian says it is important for procurement to be resilient and learn from any failures. “We have hundreds, thousands, tens of thousands of external contractors that could be in the scope of the program – not everything will go perfectly,” said Brian. But, he added, “If we understand where things are deviating compared to our expectations, we drill down into the root cause, we end up with a better program over time that’s consistently improving. Perfection is not the goal. It’s ongoing meaningful improvement.”
In the context of services procurement, compliance refers to organizational or enterprise stakeholders making or approving purchases that adhere to an established process and approved providers. For external talent procurement and management, compliance includes making sure suppliers are onboarding people in accordance with your guidelines for that type of service, in addition to the usual process considerations.
For procurement to ensure compliance, HR, Finance, and risk teams must be key collaborators, particularly in making sure that the right controls are in place and the scope of work is embedded in a contract right away so there is proper recourse in the case of noncompliance.
Brian also recommends procurement establish quarterly engagement sessions with executive stakeholders or governance teams because expectations around outcomes can change over time, and procurement should evolve their program to align with the business when this happens. And, while surveys and automated tools or scoring systems can be helpful to tease out insights, there’s really no substitute for having a good, meaningful conversation with your stakeholders.
“We always find that there is an outsized amount of buying from a small minority of the requester population,” said Brian, “engaging directly with those power users can really help inform the shape and strategy with which we execute our program.”
Knowing how much you’re spending, and perhaps most importantly, why you’re spending it, is essential for measuring the success of services procurement. Procurement should set strong benchmarks from the start while also setting up a process for long-term analytics and performance tracking.
Benchmarking will help procurement determine what’s needed in the program, especially when they consider factors like:
- What is taking place within the program today?
- What is broken?
- How long does it take to successfully onboard a supplier?
- Could we do it in a better, smarter way?
- What is the overall satisfaction level?
- Is procurement in touch with the business needs of the hiring managers?
- Is procurement achieving their milestones and deliverables within the parameters established in the contract?
- If a supplier fails to deliver, is there a rebate plan in place?
- Are there supplier performance issues that need to be addressed?
In services procurement, measurement drives improvement, which drives better outcomes for the business. The four pillars of measurement for services procurement – quality, relationships, compliance, and cost – give procurement visibility into additional opportunities for refinement and improvement. And this framework doesn’t just include short-term insights, but it sets procurement up for success in the long-term.
“We need to recognize that our success, our level of customer satisfaction with the customer is based off of what we’re going to be doing five years down the road and not what we’re doing today,” said Marie. “We should always be focused on the next phase in our journey.”
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