Over the past month, I've had the chance to catch up with two IQNavigator customers, exploring not only their experience working with their provider of choice but also the opportunity for services procurement in general inside their organizations. Both customers are ones that I would describe as operating in the context of sophisticated P2P environments. In this column today, I'll describe the experience of one of the customers that I spoke with. This organization, an Ariba customer in the P2P, sourcing and contract management areas, initially selected IQNavigator's software and enabling MSP capabilities primarily for its services spend to focus on both contingent and project-related spend based on statements of work where vendors needed to be held accountable for certain deliverables and performance expectations (previously, they had just focused on contingent labor using Ariba).
They opted to make the switch over to IQNavigator in the services procurement area because they were after services expertise in addition to just software -- a theme that seems constant in the majority of companies that I've interviewed recently that have opted to work with a single provider that either offers their own -- or resells -- software capabilities in addition to services. In their selection process, this organization considered a range of providers (all MSP organizations, except one software-only provider that was working in conjunction with an MSP) in addition to IQNavigator. But in the end, they opted to work with IQNavigator as a dual software/service provider, albeit one that lets them pay suppliers directly -- while relying on IQN's consolidated billing and invoicing capabilities -- in the wake of the Chimes fall out.
Prior to getting their program with IQNavigator up and running, the procurement organization had little organizational control over services spending. "Anyone could pretty much do what they wanted to do and our organization put a rubber stamp on it" in the prior state, but after implementing the new program, individuals who use the system "can put controls in place for quality resources" which then allows procurement to lead the charge "in getting good rates and introducing competition" to the process. Under this model, this organization, "purposely decided that we did not want hiring managers to make a decision on which vendor to use". Their deployment of IQNavigator forces hiring managers to "tell us they want to hire a position and we mask who the vendor is, forcing the manager to look at the quality of the resource beyond just the rate and the vendor". While the initial months of this approach proved rocky, the company adjusted and is satisfied with the results of this type of blinded model.
One of the areas in which this organization is satisfied working with IQNavigator is from a reporting perspective because every field, including the skill sets of potential candidates or teams, is captured and can be reported on directly (versus captured only in the form of an attachment). This allows searching, filters and analysis on direct fields and attributes versus having to manually enter data from an attachment into Excel.
On a broader level in regards to why they opted for IQNavigator, this organization initially thought it would make sense to "separate the tool from the services" in choosing a partner "but then began to look at what was needed as a comprehensive package". Having gone down the integrated path, the program owner can "definitely say there are some advantages [to the dual MSP/VMS choice] in the sense that as you expand the program and customize and make changes to how the processes flow or how you manage a partner can help guide the process and increase savings and returns".
And in the case of their current implementation, the returns are impressive and include a weekly analysis of hard-dollar savings, comparative costs (current year to prior year), and billing and invoicing (accuracy). In this organization's view, "Every vendor had their own method of doing invoices and the back-up. This varied by vendor. Some vendors were good at line-items. Others just gave summary. With IQNavigator, since everything is populated in system, there is no discrepancy in the billing rates." Moreover, since launching with IQ Navigator, "anytime there was ever a question [regarding billing and invoicing], we could always validate what we agreed to. Billing audits are [now] a moot point. Everything has an historical record [attached to it]."
IQNavigator is helping this organization get its cost structure down through other means as well such as eliminating statements of work where such models are not necessary. In their words, "Now that we have the machine running, we realize that there are some statements of work that are clearly contingent labor masquerading as statements of work." In addition, the company has also learned to be more "cautious around the type of spend that we have and putting controls in place. We're now more informed about spending patterns. Last year, I could have told you how much we spend with services providers, but not what types of services they were. These are critical pieces of information that we were not capturing."
Part of the success owes to leveraging MSP services along with the platform that creates greater flexibility and visibility. In this regard, the organization noted that "We've been able to evaluate on a monthly basis if we can fill them, how quickly, candidate success in positions, adjustments to rate cards, etc. In general, when you have a tool and a service provider for managing external labor expenses, the more information you have in a particular process, the better decisions you can make."
In the past, the company "struggled with understanding what staffing firms and individuals we had onsite and who they worked for let alone doing analysis on them. But now we can do monthly reports on such areas as: who contingent workers and providers are doing work for, who do they report to, what are their rates, how are they performing, etc." As a result, this lets the organization "take a step back and make strategic recommendations and actively and proactively manage our services spending versus simply reacting to it." Which is something that should be a near-term goal for all companies that decide to tackle services procurement regardless of whether they take an integrated VMS/MSP service like IQNavigator or opt for another approach.
Stay tuned for the final posts in this series covering IQNavigator and coverage of additional services procurement industry happenings in the coming days on Spend Matters.