The COVID-19 pandemic and its rapid impact on the global economy have made it crucial for enterprises to be adaptable and responsive to changes. Enterprises are now turning to their third-party IT Partner/Supplier ecosystem to effectively adapt and react in the fast-paced & highly competitive business landscape. The IT suppliers have enabled enterprises to scale up or down to meet the ever-changing demands of their business.
According to the IT services global spending forecast, with the economic impact of the COVID-19 pandemic, worldwide spending on IT services is expected to be 9.8% higher than 2020 at 1.2 Trillion US dollars in 2021.
However, with the challenges of being compliant to ever-changing regulatory oversight and tackling rapid market expansion & business transformation, managing third-party IT suppliers/partners becomes a costly and time & resource-intensive process.
Challenges for managing suppliers for managed services and staffing engagements
Many enterprises may already use traditional sourcing tools such as SAP Ariba*, Coupa*, or Contingent Workforce Management tools such as SAP Fieldglass* or Beeline*.
While these platforms address the core needs for intake management, resource management & invoice submission, and processing, they lack critical delivery governance, contract compliance, performance, risk & invoice validation capabilities that enable enterprises to boost value from managed services & staffing engagements.
Here are some of the common challenges enterprises face while managing their IT supplier ecosystem for services & staffing;
- Insufficient insights into demand & staffing for new Projects and required skills & resources.
- Determining whether the project/staffing pricing quoted by suppliers and delivery milestones are optimal.
- Getting suitable candidates as per the negotiated contractual rate.
- Tracking SLAs for staffing, project deliverables & quality.
- Validating invoices at the line-item level.
- Tracking and mitigating supplier risks.
Enterprises are now embracing Vendor Management Systems (VMS) with robust compliance & risk management capabilities to effectively manage their complex third-party IT suppliers & staffing provider ecosystem. An effective system provides the structure & governance necessary to gain control over IT supplier spend.
How can a Vendor Management System with Compliance, Performance & Risk Management Capabilities help?
A Vendor Management System is a web-based application that enables enterprises to manage their third-party IT suppliers/partners & secure managed staffing services on a temporary, permanent, or contract basis.
A robust VMS helps enterprises to centralize & simplify the complex issues around the manual management of the staffing process and realize higher efficiency, improved productivity, better compliance & risk mitigation, and significant cost savings through increased visibility and control. It also enables enterprises to streamline the sourcing of proposals & candidates from suppliers for managed services & staffing engagements and automate performance management & invoicing processes.
In addition, for enterprises that use external systems, the VMS should also provide seamless integration with external sourcing tools such as Ariba*, Coupa*, or Contingent Workforce Management tools such as SAP Fieldglass* or Beeline*.
Effectively Manage IT Partner/Supplier Ecosystem
A robust Vendor Management System enables enterprises to support their complete demand management lifecycle from creating opportunities, staffing & demand requests to tracking resources, allocation, timesheets, etc. It also improves collaboration and communication with third-party IT suppliers by enabling them to identify & submit suitable candidates as per project requirements. In addition, enterprises can also track and manage supplier contract compliance, performance, and risks.
With a Vendor Management System integrated with Supplier Compliance, Performance & Risk Management capabilities, enterprises can:
Track & Manage Supplier Contract Compliance & Performance
A robust VMS enables enterprises to effectively manage supplier contract compliance and performance by monitoring, reporting and analyzing vendor compliance, performance & quality.
With a VMS, enterprises can easily extract and set up Contractual SLAs and KPIs, including minimum & target thresholds, and for suppliers to report the SLAs/KPI actuals or track Service Exceptions or request Exemptions. In addition, the system makes it easy to report and analyze service performance, perform root cause analysis (RCA) of non-compliances, and track service Corrective Action Plans (CAP).
The system can also enable enterprises to ensure compliance, mitigate risks, & increase contract value by enabling them to track and manage Contractual Deliverables & Obligations effectively. In addition, the system also enables enterprises to streamline & automate the approval and acceptance processes.
Manage Outsourcing Opportunities and Staffing & Demand Requests
A VMS enables enterprises to create and manage opportunities based on the project requirements or import opportunities from existing external sources if needed. It can also auto-generate Staffing Requests based on the created opportunities and provide the vendor management team and project manager easy access to opportunities and staffing requests.
The system also enables the vendor management team to open staffing requests to relevant suppliers based on predefined requirements. In addition, the system can auto-create demand requests for staffing requests open to suppliers and automatically notify the suppliers.
Improve Candidate/Resource Submission & Selection Process
Once the Demand Request is created, the VMS enables the suppliers to submit suitable candidates. The Project Manager is then automatically notified for screening the submitted resource/candidate by accessing their details and profile (CV) and approving/rejecting them. Furthermore, if the Project Manager rejects a submitted candidate, the supplier is automatically notified to submit other relevant candidates for screening & approval.
Once the Project Manager approves suitable candidates, the supplier is automatically notified to schedule an interview. The system then enables the Project Manager to easily update feedback and accept/reject the application after the interview process. If the candidate is accepted, the supplier is automatically alerted to update the candidate’s details required for the hiring process. The candidate then gets assigned to the vendor management team to update Purchase Order details and onboard the candidate.
Enhance Resource Management Process
A VMS enables the vendor management team to easily onboard the candidate for projects or services under a Statement of Work (SOW) and automatically create a resource for allocation. The onboarding process can optionally include background check assessment, assignment of assets and seats, etc.
The system also supports synchronization with onboarding performed in an external contingent workforce tool. The vendor management team should also be able to easily offboard the resources once their tenure is completed in the organization.
Record & Track Resource Timesheet (Utilization/Accruals)
An effective VMS enables enterprises to record, track and analyze timesheet reporting by third-party IT suppliers at the resource level or the aggregated level by resource role. The system also enables the vendor management team to record & track the resource efforts for their tenure in the opportunities. In addition, the system can easily create timesheets for the resources monthly and capture their attendance details.
The system also enables the resources to easily update the actual hours for the day and automatically submit the timesheet to the Project Manager for review and approval.
Manage Resource Requests & Invoice Validation
A VMS enables the IT suppliers/partners to manage resource requests like travel, leaves, etc. In addition, enterprises can easily update resource details like Purchase Order, Project Manager, Department, etc.
In addition, the system also enables enterprises to quickly generate Proforma Invoices with rule-based line item validation of rate cards, utilization, etc. Once the invoice line-items are validated and approved, the system can automatically send an email to the Accounts Payable team or interface with external ERP systems like Oracle or SAP.
How can Enlighta help?
Enlighta’s Vendor Management System enables enterprises to augment their sourcing of proposals and candidates from suppliers for managed services and staffing engagements. In addition, Enlighta’s VMS goes beyond traditional VMS and enables enterprises with supplier contract compliance, performance, and risk management capabilities to help them drive higher business value from supplier relationships.
In addition, Enlighta provides seamless bi-directional integration with leading ERPs (SAP*, Oracle*), Sourcing tools (Ariba*, Coupa*), Workforce Management Systems (Beeline*, SAP Fieldglass*), and more.
Unlike traditional VMS, Enlighta addresses all facets of sourcing from suppliers for managed services and staffing engagements, including staffing & demand management, resource submission, selection, onboarding & offboarding management, resource timesheet tracking, invoice validation, supplier contract compliance, performance & risk management, and more.
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