Companies Can’t Get No VMS Satisfaction: Exploring the HR Disconnect With Services Procurement Technology

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In a recent multi-phase poll by Spend Matters and the Institute for Supply Management, we explored the poor adoption of services procurement technology within buying organizations. This lack of adoption (at least with best of breed tools) would appear to have a relationship with why so many companies aren’t managing external labor supply chains as efficiently as direct materials ones – and aren’t satisfied either with their program results.

Here is a sampling of qualitative responses from the study centered on a procurement and human resources disconnect:

  • “[We are] one of the biggest technology companies in the world and [our] in-house technology is average.”
  • “Mainly this is due to our HR not taking ownership of the 'big picture' of managing contingent labor and implementing a structured program/policy.”
  • “Disorganization. [We are] not effectively leveraging vendor relationships – too many different areas/lines of business involved with no one owning it or understanding the whole picture.”
  • “Relationship controlled by HR, no procurement visibility beyond contract.”
  • “There's not a defined or structured process for recruiting for the organization.”
  • “Our organization cannot get a handle of total spend of contingent labor. This function is not managed by one group.”
  • “There's not a focused approach on evaluating contingent staffing needs.”
  • “Lack of integration between business requirement needs for services and human resources department.”

What jumps out at me from looking at these qualitative responses is that the management of contingent labor (and in many cases broader services procurement) lacks a clear owner and sponsor inside many companies – it is caught between procurement and HR (and often lines of business and specialized departments as well).

Curiously, this is precisely what I don’t hear when I speak to users who have stronger VMS and MSP adoption. But these customers are most likely those with relatively higher levels of program maturity.

Download the results (and our analysis) from the first wave of this research conducted in 2014 here: Applying Supply Chain Rigor to Contingent Workforce Management

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