Staffing Industry Analysts’ Hackathon series continued last month at the CWS Summit Europe. SIA invited conference attendees to address one of three scenarios that represent common dilemmas faced by contingent workforce programs and their suppliers today. Attendees representing all areas of the contingent workforce spectrum formed teams to address the scenarios created by SIA.
A hackathon, originating as a collective computer-programming problem-solving event, is an exercise where like-minded individuals pool their expertise to solve real-world problems. Staffing Industry Analysts applies the concept to the workforce solutions ecosystem. “Our hackathon was developed to enable buyers and participating suppliers identify and resolve some common workforce challenges in a non-selling and collaborative environment,” said Bryan Peña, senior VP of contingent workforce strategies, “leveraging the best ideas and insights from some of the most sophisticated buyers on the planet.”
Participants at the CWS Summit London last month were tasked with identifying four to five key priorities and/or actions that they would focus on in resolving their chosen scenario, and to detail the means and key tactics that would help them achieve their objectives. More than 15 teams took part in the session, and two teams were named as co-winners by SIA last week.
One winning team tackled the “Supplier Strongarm” scenario:
Supplier Strongarm. You are the program manager for a global pharmaceutical company based in London. You have been in the role for some time and your global remit includes multiple disparate geographies and covers thousands of contingent resources. These resources include everything from IT personnel to world-renowned scientists to pickers in your remote warehouses. You have spent the last three years building the business case, educating stakeholders and being an evangelist for the cause of implementing an MSP enabled through VMS technology. After an exhaustive RFP process involving stakeholders from corporate finance, HR, risk and legal, you have just signed the 100+-page contract with Atapstad to be your global MSP, with Beefieldcup as your VMS technology. The contract includes an execution incentive of €150,000 for an on-time implementation. With so much time having been spent on the RFP process, you are behind on your savings goals for the year, and you need to hit that date.
But over the weekend, your CEO sends you a terse message asking for background information on the program process and go-forward strategy. Apparently, he had an informal meeting with the CEO of Manstadecco — your largest global IT and light industrial provider — who stated Manstadecco’s unwillingness to participate in the program and threatened to pull all of its resources should the vendor-neutral program be implemented.
Normally, such pushback is to be expected, but because Manstadecco represents more than 35% of your IT volume and 70% of your total light industrial, the threat is all too real to not consider. And your CEO’s involvement is giving the plan managers an opportunity to voice similar concerns, which could at best add months to your implementation and at worst get you fired!
You need a game plan ASAP to get the program back on track and rebuild momentum. What do you do? How can you enroll your new program partners to help? What sorts of strategic considerations need to be taken into account to build a got to market plan?
Addressing the strong-arm scenario were Kinga Boboc, HCL Technologies Ltd; Melay Ulker, Hewlett-Packard Company; Madelyn Abreu, Roche Bioscience; Alberto Tomatis, Roche; Marcel Brouwer, Ernst & Young GmbH; Ashan Weerasinha, Ernst & Young Global Limited; Sabrina O’Connell, Paypal; and James Waite, Gibbs Hybrid.
The team got right to work discussing solution approaches that had worked for them in the past. The members agreed on their preferred outcome and then molded that into a Plan A — communicate, collaborate, convince everyone the MSP was the right approach. “We did discuss a Plan B — i.e., push Manstadecco out of the MSP — but decided that was far too risky,” relates Waite, team leader.
The team established a six-step plan for the program manager to follow to bring the implementation back from the brink, with heavy emphasis on communications and demonstrations of the program’s offerings and benefits to all parties — as well as intense training in the process and the technology.
“Our team dynamic was fluid conversation with a lot of good real-life experience, but also with a diverse approach to solving the problem,” Waite explained. Each team member contributed their thoughts and ideas, which was “why it was so comprehensive and complete.”
The other winning team chose to address the Commoditization scenario:
Commoditization. Acme staffing has been HTT’s largest supplier of IT and engineering resources for the past three years in part by being able to provide a high-touch service for the right price. HTT’s pricing contract allows for a target bill rate program with visibility to the underlying pay rate at the program office level and on demand. The recruiters work closely with the MSP program office to make sure they provide a competitive bill rate while at the same time pay their resources — internal hires and on assignment — a higher-than-market rate to keep their resources motivated and committed to filling HTT roles. This leads to an engaged staff of several dedicated Acme team members. The dedicated team assigned to HTT gives Acme ability to find top-notch talent which sets Acme apart but compresses the possible margin to a razor thing percentage. HTT is far and away Acme’s largest client — its revenue is five times that of the next-largest in Acmes roster — and provides the company’s lion’s share of dollar profit contribution. That said, 2017 EBIT for the HTT business is less than 4%, so ACME put an initiative in place to increase its mark-ups on HTT business to a more reasonable profit level. But the last few weeks have revealed a disturbing trend with a steep drop in new orders.
One day, HTT procurement holds a mandatory supplier summit, at which the new CPO makes an unusual appearance and announces the company will be deploying an aggressive supplier rationalization initiative. Cutting down the current crop of 75 suppliers competing for €55 million in total spend to 10 preferred providers or fewer. You feel confident that your excellent service over the last few years would set you up for success, but the CPO declares to the assembled crowd that in his mind “all providers are the same” and that moving forward “agency services will be treated like the commodity it is and will be priced accordingly in future contracts.” These are disturbing words to say the least and you feel the dramatic culture shift at HTT could be disastrous for your teams’ morale and the future of your business.
How do you respond to ensure Acme is positioned long-term survival? What are the core issues as presented? What actions can you take in the near term to create an opportunity and what options can you avail your team in the long term. How do you fight the “commodity” label and communicate to HTT the value you bring? What additional services can you provide which may turn the tide towards commoditization?
The winning team comprised David Ainsworth, TAPFIN; Giulia Bianchin, Exxon Mobile; Renauld Clavel, Exxon Mobile; Myles Gilbertson, Unilever; Kendarnath Iyer, Uniper Energy; Tara Simon, BNY Mellon; and Remi Van Der Sloot, Draftrucks.
“We had great team dynamics,” Simon said, and a team leader in Ainsworth who set them up for success. “We definitely had varied thoughts, but after brainstorming, the team was satisfied and agreed” on its course of action, Simon noted.
The goal was not only to make clear to HTT the value provided by ACME already, but to map out the future path of ACME’s service delivery and value to HTT.
The team wanted to educate HTT that talent and ACME’s service is not a commodity in these times, Simon explained. “Our track record proves ‘we know what you need before you know it.’”
Starting with conducting a discovery of HTT’s requirements and market trends, through to establishing new service delivery components, to painting the picture of the final realized value for HTT, the team detailed a 12-month process by which ACME would go from providing “value to hyper-value.”
ACME would discuss with HTT the state of the IT talent market and, based on its track record and proven value, demonstrate enhanced service delivery through a committed roadmap to becoming a trusted partner to HTT in the future. “We planned to demonstrate how the incorporation of new ACME service lines, an optimized delivery model and the inclusion of AI-based technology would drive enhanced value and access to talent at HTT,” Ainsworth said.
“We had many good responses with varying levels of detail and creativity,” Peña said. The winning teams displayed a strong grasp of the problem as presented and identified viable and creative solutions in an engaging and interesting manner. “They both exhibited a significant amount of sophistication in the quality of their response as well as their obvious teamwork, which resulted in a holistic solution.”