In the first of this three three-part series, we explored the various reasons why an organization may assign ownership of its contingent workforce program to human resources. While there are several business reasons that support this, HR is not the only valid place for contingent workforce management to reside. This article examines why procurement may also be an appropriate program owner.
Budgetary mindset. With many procurement groups sitting close to finance in the org chart, they are understandably familiar with how to control budgets. When cost is the driver of centralizing contingent workforce management, procurement may be the group to start finding the savings opportunities and enforcing the processes that help the business be more mindful of its spending. Strong financial governance and oversight can help drive cost savings as well as cost avoidance opportunities.
Outsourcing intent. The CW strategy can play an important part of the decision on who should own the program. The decision to “make versus buy” often varies from one enterprise organization to another. When the strategy is to leverage outside solution providers such as a vendor management system or managed service provider to share risk and fully own the technology and operational support, the focus can shift to procurement to ensure the right partners are identified, the right cost is established and the right terms are put into place to safeguard the relationship. These are items that procurement does well. Although HR can make decisions to outsource a CW solution, they will often need procurement’s help to go to requests for proposals and structure agreements to execute an outsourced solution.
Supplier partners. While the talent is an important component of any CW ecosystem, a business also must be mindful of its supplier partners. Because these partners are a conduit for the talent being utilized in CW programs, the value of building the best partnerships possible with these service and technology providers can be critical to the success of the program. Strong procurement strategies can help drive the best supplier behaviors when there is a high volume of suppliers in the CW program. When there are high volumes of these partners, the best support may be centered around vendor management and contractual assistance.
Category management. Category management is the practice of buying common goods and services as an organized enterprise in order to improve the efficiency and effectiveness of acquisition activities. With the diversity of various engagement types to choose from, there is often complexity in the options available to find talent. Another area in which procurement excels is managing the uniqueness of each acquisition through a category model that creates best practices and operational processes that in turn best compliment what is being purchased. This model naturally lends itself to CW as an organization continues to add new avenues to talent.
There can be strong valid reasons for giving procurement ownership of a CW program. Specifically, when CW programs require structured cost management and a focus on control and oversight, procurement can be the best solution for enterprise buyers.
The next article in this series about program ownership will expand on other ownership opportunities beyond HR or procurement.