You cannot improve something that you cannot or do not measure.
Unless you have current and future state data, you cannot say with any degree of certainty that you are making quantifiable and meaningful improvements within your workforce program.
I recently witnessed during SIA’s CWS Summit in Europe a fascinating debate between a procurement professional and a CEO who were discussing maverick spend in the area of services procurement.
Within most organizations, the total spend on the outsourcing of projects and services is generally considered to be of higher value than that of staff augmentation. Therefore the desire to bring this category of spend under some form of governance is driven primarily by the level of spend and potential for more effective purchasing decisions. However, noncompliance and misclassification are growing drivers as well.
I remember speaking to so many companies ahead of the UK’s IR35 Off-Payroll Working legislation and asking: “Roughly, what percentage of personal service company workers within your organization are likely to be misclassified according to the new requirements?” The answer was almost always in the region of 100%!
Misclassification of this category of worker is not something to be ashamed of; it is a fact of our industry — and something that organizations around the world are looking to put right and to get ahead of any future compliance mandates.
In the debate between procurement and the CEO regarding caupturing services procurement spend within an established contingent workforce program, procurement passionately and professionally argued for the need for controls aligned to Quality, Efficiency, Cost and Risk (QECR) and the benefits to the overall organization; the CEO, with equal passion and professionalism, put forward a compelling case that under the current so called “maverick” processes, projects were being delivered on time and on budget to the desired quality requirements, so they saw no need to change.
I had a two-pronged question that I was keen to ask both parties, and I was able to do so after the panel session had concluded. I asked the procurement professional, “Would you be prepared for the business to continue its buying practices, allowing them to buy what they want from whom they want and however they want, so long as it was through your chosen VMS?”
I then asked the CEO, “If procurement allowed you to continue your current buying practices, allowing you to buy whatever you want from whomever you want and however you want, would you be prepared, going forward, to make those purchases through the VMS?”
The answer I received from both was what I hoped for: “Yes.”
What we have here is a clear path to visibility, working jointly with stakeholders to capture buying decisions and critical elements of those buying decisions, which in turn enables us to analyze and make fact- or data-based improvements for the benefit of the overall organization, including its profitability, shareholder value, risk mitigation and market competitiveness..
If we were to assume that there are no silent assassins within this stakeholder group who want to undermine the business (which is a far more serious matter to contend with), then this enhanced visibility enables procurement and business leaders to collaborate to improve purchasing processes and decisions — and ultimately the future performance of the overall workforce program.
Whatever can be done to create visibility — even if it means allowing maverick, uncontrolled and potentially noncompliant purchases, as long as they are made through the VMS — is far better than having these purchases occur beyond our visible horizon.