SIG Dispatch – The New Procurement: Risk and Services Procurement (Individually and Together!)

I’ve been a good SIG delegate (as Dawn Tiura, the head of SIG, would like to say) this week. I will admit to not having spent much time in my room during the Global Executive Summit, opting to attend the breakout sessions rather than catch up on the 50 or so things piling up behind the scenes.

And that’s a good thing, for this is not your typical wide-themed procurement conference in which you’ve heard the same story or case study before. If you’ve been reading my dispatches thus far, you’ll pick up on two central themes in the SIG fall summit: supply chain/supplier risk and services procurement. I’d wager that topics surrounding these areas make up roughly around 50% of the content over the three-day event, and much of the content is deep.

Is this truly a risk-and-services-obsessed bunch? Not exactly. I’d wager SIG is a bit out in front of the game here in steering the discussion. There’s also the notion of an expanding definition of risk management, a topic I spoke about today on a lunch panel. Whereas years ago supplier and supply chain risk was narrow in scope, it’s now become a catch-up for a wide range of initiatives.

And services procurement, too, has evolved as well, encompassing not just the management of contingent workers and staffing firms, but the broader ecosystem of freelancers, independent consultants and small services firms as well (even that locally selected landscape of facilities maintenance firm, which we bet did not fully vet whether all its employees are citizens, or work visa- or green-card holders).

Of course, this raises a broader point about how we consume services in our companies, too — namely that procurement is increasingly becoming services procurement whether we like it or not. During one of the breakout sessions, a panelist shared a quote from Fast Company noting that “by 2020, about half of non-government workers in the U.S will be contract workers — not permanent, full-time employees.” And let’s not forget in this number we also need to account for the fact that a lot of these independent workers will be hired by multiple companies, further magnifying the challenge of onboarding, background checks, compliance management, credentialing, contracting, payment and many other areas.

So perhaps curiously the intersection of risk management and services procurement is the most fascinating of all — and far more challenging than general supplier risk management since we must take our monitoring and compliance approaches down to the individual worker level. I’d argue that this is a topic that many of the delegates are still just beginning to get their arms around (if we haven’t cracked and gotten basic worker classification under control yet — and believe me, we haven’t — we’re clearly not ready to address all the other forms of risk lurking in the services supply chain).  

Perhaps scarier is that this group of folks at SIG, by nature of their attendance at this event and participation in the organization, is generally out in front of the pack. Given this, it pains me to think how unprepared most organizations are for the broader intersection of services procurement and supply chain risk.

Stay tuned for more live coverage from SIG throughout the day tomorrow.

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