RPO from a Procurement's View

Accurate Facts Lead to Accurate Decisions.

RPO from a

Procurement’s View

Tomorrow

Accurate Facts Lead to Accurate Decisions.Copyright 2012 HCM Works Inc.

Who is HCMWorks?

HCMWorks helps procurement departments OPTIMIZE indirect spend.

A consulting, advisory and outsourced services provider focusing on the analysis, strategic direction, identification, implementation and management of indirect spend.

“High-level strategy and design, along with the critical hands-on management of daily transactions”…….“Ability to go beyond the services component to look holistically at all indirect spend to find opportunities for savings for the entire enterprise”…….“Works with user community (execs with buying power) to maintain compliance with standards that the company has setup; does not dictate the standards”….


Who is PSC?

Payment Services Corporation is a subsidiary of HCMWorks, Inc.

Payment Services Corporation is a leading North American Professional Employment and Payment Processing Company.

We manage the time allocated to the management of Contractor Payments and Employee Payroll tax filing so our clients can focus on their core business.

We aggregate Independent Contractors and Sole Proprietors to ensure compliance to legal, tax and regulatory statutes.

Since 1987 our management team has facilitated the payroll for well over a million employees and independent contractors. Our experts understand the provincial and federal regulations and work to ensure that all payments are facilitated in a timely fashion.


Control vs EMPOWER

MOTIVATE (positively / negatively)• Energy• Short-lived

COLLABORATE• Change Management• Time Consuming

EMPOWER • Viral• Self-managing


Survey Results 2011

Biggest challenges organizations are currently facing:

• Lack of visibility into indirect spend• Making people aware that a procurement group is available

How do you see things changing in the next 1-3 yrs?

• Will see a rebound in usage of contract labor as growth happens • Good time to be in the procurement space – much more visibility into cost side• Raised visibility with firms that have a lot of indirect spend with executive

team

What are the big problems you’ll be looking to solve over the next 12 months?

• Relationship mgmt is critical – anyone can source and negotiate, harder to manage acct on day to day basis


Renewed Focus on Procurement

Executive Mandates

Spend Under Management

Temp Labor

Professional Services

Legal

Marketing

Goods

Facilities

Sourcing & Supply ChainCompliance

Sarbanes-Oxley

Co-Employment

Thought Leadership


Typical Landscape


Supplier Enablement

Organizational Relationships

Internal “Customers” (requestors)

Suppliers

Hosting / Infrastructure Monitoring / SLA

Spend Management Solution(s)

Supplier Managers

Config

and

Supp

ort

Settlement Management

Category Management and Services

ContingentLabor

ProServices

Legal Facilities Marketing Goods


1) Need

2) Order

3) Source

5) Settle

Request-to-Settlement

4) Manage


1) Need

Where’s the Opportunity?

When you think of your internal customers as having needs, and the process and/or tools that they use – is it driving (empowering) adoption, or is it more like “you will do this” and as a result, driving adoption and change management issues? Who can assess, source and implement any number of initiatives to further this program’s success?

(procurement)

(HR)

(internal users/requestors)


2) Order


Is it easy? Is it different that what they’re used to? Does it take too much time/energy? Does they have to pay for a “service rep” to “broker” the order because of the difficulty and/or specificity of the order request? Does your RPO provider(s) have issues? How does the changing RPO/Staffing landscape effect this portion of your service? Is the process integrated into organizational systems (ERP/VMS/etc) for later reporting?

(procurement)

(HR)

(internal users/requestors)

(RPO)


3) Source


Is the sourcing process objective? Since the staffing owned RPO may be brokering the request and the staffing owned VMS may be facilitating the transaction, are your internal customers getting what they’ve asked for? In the end, who is looking out for your enterprise’s best interest?

(strategic sourcing)


4) Manage


(finance)

Legal Expenses

HR Management

Accounts Payable Management

Workforce Misclassification Exposure

Co-employment Risk Expense

Spend Management Expenses

Contractor Availability

Competitive Risk Costs

Finance Department Expenses

Timekeeping Expenses

Contingent Workforce Mgmnt Expense

Reduced:

(legal)

(HR)

(procurement)


5) Settle


Is the process fully integrated? How are invoices without PO’s handled for this category? Is the settlement/consumption (time/milestone submission) process as efficient as it needs to be? Is this leading to any adoption/change management issues?

(finance)


Find

Get

Keep

Deman

d Ana

lysi

s

Diagn

ostic

Supply Analysis

Strategic Sourcing

Procure-to-PayCompliance

“your” RPO


Where Do You Need Help?

CashCost

QualityService

Find

Get

Keep

Deman

d Ana

lysi

s

Diagn

ostic

Supply Analysis

Strategic Sourcing

Application InfrastructureCompliance

Map

Cur

rent

Prac

tices

Conso

lidat

eSp

end

Align

Capab

ilitie

s

Restructure

Supply Base

Increase

Competition

Establish

New Relationships

OptimizeProcure-to-Pay Process

Compliance and Savings

Report andManage

Knowledge of your buyers, buying

habits, business requirements and culture, requires

heavy stakeholder involvement

Knowledge of your supply market to meet your

business requirements through Strategic Sourcing

Joint implementation of strategies, processes and systems with Stakeholders and Suppliers to Lock in the Savings

Spen

d Sn

apsh

ot


SettlementManagement

Business Requirements


ProcessManagement

ProgramImplementation

StrategicSourcing

Advisory Services

Category Management

Strategic Planning

Process Consulting

Risk Assessment

• Market and competitive analysis• Business management alignment

• Technology automation opportunities• Identifying areas of spend leakage

• Risk mitigation recommendations• Implementation plan

• Organizational & supply-base review• Opportunity assessment

• As-is procurement process mapping• Industry benchmarking

• Risk assessment—Supply-base—Offshore/outsourcing services―Contingent workforce―Procure-to-pay process and

policies

• Strategic roadmap development• Implementation plan

• Best-practices recommendations• Implementation plan


SRM - KPI Program

Quality - 30% Percentage Target Points Actual Score

Percentage of positions filled 80.00% 95% 24 n/a

Kelly Services 78% n/a

Manpower 19.9% n/a

Percentage of No Show status 10.00% < 5% 3 4.02% 3

Percentage of Terminations for reason 10.00% <5% 3 2.5% 3

Cost – 25% Percentage Target Points Actual Score

Work Order Bill Rate Comparison by service (admin) 70.00% Average 17.50 MP – $ 20.97 Kelly – $ 16.24

n/a

Bid Bill Rate Comparison by service (admin) 20.00% Average 5 MP – $ 20.98 Kelly – $ 16.44

n/a

Regional Bill rate Comparison by service (admin) 10.00% Average 2.50 $ 18.61 n/a

Delivery – 15% Percentage Target Points Actual Score

Number of requests filled on time? 40.00% 95% 6 65% ** 4.08

Number of same day next day requests filled on time 40.00% 95% 6 44% ** 2.76

Average time to fill a request 20.00% Average 3

Support – 15% Percentage Target Points Actual Score

Problem Resolution 40.00% 3 6 2 3.96 Repeating or Persistent Problems 60.00% 3 9 2 3.96



Help You Source


ProcessManagement


StrategicSourcing

Advisory Services

Category Management

Spend Analysis

Supply Base Analysis

Requirements DefinitionRFX Execution and EvaluationSupplier Selection and Contract Negotiation

• Spend cube creation

• Profile of current supplier spend, performance capabilities compared to market

• Data gathering from stakeholders• Definition of RFX evaluation criteria• Cost savings analysis• Service level analysis

• AP and Purchasing data sourcing and cleansing

• Evaluation of market trends, supplier capabilities, performance benchmarks

• Assessment of incumbent supplier performance

• Execute RFX process• Evaluate RFX process• Supplier selection communication• Contract draft process• Contract review & final negotiation

• Opportunity assessment

• Opportunity assessment

• Development of RFX documents• Validation of requirements• Recommendation development• Approval process management



Program Implementation


ProcessManagement


StrategicSourcing

Advisory Services

Category Management

Application Deployment

Best Practices Implementation

Change Management

• PunchOut integration to ERP/procurement infrastructure (if desired)

• Phased rollout project plan• Program governance structure

definition

• Implementation of updated procurement and AP policies and procedures

• On-demand platform configuration

• As-is and to-be procure-to-pay process definition and gap identification

• Gaining and maintaining executive and business operations sponsorship

• Strategic communications planning and implementation

• Additional configuration and customization available

• Resource augmentation identification

• Employee training• Supplier transition and training



Process Management


ProcessManagement


StrategicSourcing

Advisory Services

Category Management

Requisition Management

Sourcing Support

Change Order SupportSystem Data Maintenance

Tactical Supplier ManagementCompliance Oversight

• Requisition expedites (e.g. same-day)

• Coordinate candidate reviews• Hiring manager / Requester status

update

• Order updates and extensions

• Rate adjustments and updates• Maintain supplier users

• Daily interface w/suppliers on performance issues

• Weekly analysis of PO and work order actuals-against-budget

• Daily monitoring of requisition flow• Create requisition on behalf of

managers• Verification of supplier/candidate

compliance (e.g., background check, education requirements)

• Manage candidate/supplier replacement

• Add/edit job types/descriptions/ locations and catalogs

• Sourcing rules management• Supplier training (ongoing)• Weekly KPI review• Weekly review of corporate/tenure

policy issues and compliance• Supplier SLA audit

• First day calls (ensure candidate arrival)

• Timesheet and receipt proxy entry

• Business rules updates (bid factors, supplier scoring, approval tolerances)

• Gather performance evaluations from managers

• Supplier spending limit approval audit



Settlement Management


ProcessManagement


StrategicSourcing

Advisory Services

Category Management

Invoice Processing

Supplier Payment

Exception Handling

• Invoice receipt and consolidation• Timesheet and progress log matching against negotiated ratesheets and work orders• Ensure correct pro-forma invoice generation• Customer invoice generation

• Settlement issuance• Supplier approvals• Payment schedule management to ensure SLA and terms are met

• Dispute resolution• Reconciliation• Invoice adjustments• Credit processing


Control vs EMPOWER

MOTIVATE (positively / negatively)• Energy• Short-lived

COLLABORATE• Change Management• Time Consuming

EMPOWER • Viral• Self-managing