Traditional Workforce Models are Constraining Business Growth — Being the Solution, Not the Problem

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Today’s enterprises can no longer rely only on traditional intermediaries for sourcing and engaging talent. This is especially the case when it comes to the specialized, often scarce skills of high-end knowledge workers. At the same time, businesses need low-friction, low-overhead, end-to-end and often project-specific processes that can support speed, flexibility and agility — often enabled by emerging technologies.

Technology, however, is just one part of the puzzle. At least as important — if not more so — is initiating and sustaining change inside the enterprise. Adopting new talent models is not about making incremental improvements to your existing approaches, much less disrupting them entirely. Instead, it’s about ushering a new and potentially transformative innovation into the enterprise.

This presents both opportunities and challenges for procurement organizations. Today’s new talent models promise sustained, enterprise-wide value. Procurement is well positioned to help companies realize this value by supporting or even leading the transformation. But what’s the best way to get started when there are no established practices or roadmaps for doing so?

From Support to Leadership

Adopting new talent models is a dynamic process. Our research indicates there are three basic roles that procurement can assume in it:

Using this Spend Matters framework, you should be able to assess which level of maturity your procurement organization has achieved — or which level an executive within it has reached — and therefore which role you should adopt when it comes to innovating new talent models. That’s important, because you generally can’t jump from one level to the next without establishing the structures and practices needed for the intervening levels. Once you know where you are and where you want to get to, though, you can create a plan that’s more likely to succeed.

In only a few cases we’ve seen has procurement been able to assume the role of a Leader when it comes to pushing through workforce model innovation. In our experience, this happens when a procurement organization is at high level of maturity. Procurement Leaders anticipate and are knowledgeable about the challenges and priorities ahead, and they are able to allocate time and resources to the undertaking. Their enterprises may not be ready to adopt new talent models, but will be receptive to a pilot process that the procurement organization initiates and leads. The ultimate goal of a Leader is a scalable yet standardized approach that is easy for end users and that is well governed, with appropriate controls, transparency and reporting.

In most cases, however, a line function in the enterprise — IT or marketing, say — will initiate the process based on an interaction with an innovative solutions provider. Other functions in the business, from HR to finance and legal, must then align and participate if the transformation is to continue. In these cases, procurement can — and should, in our experience — assume either a Supporter or Enabler role, depending upon factors such as knowledge level and available capacity.

Participating as Supporters or Enablers offers procurement an opportunity to move up the learning curve and become more knowledgeable about different sourcing and engagement models and technologies, as well as what must happen within the organization to realize the benefits of adopting them. As Supporters learn to become Enablers and eventually Leaders, they can take strategic control of one of the most powerful opportunities for positioning the organization for growth—perhaps an appealing career path for new contingent workforce procurement professionals.

Procurement has an unparalleled view across the needs of the enterprise. It has deep expertise about strategic sourcing, contracting and process design. If it can manage the dynamic process of internal and external stakeholder interaction, collaboration and learning—where organizational authority matters less than contributions and sharing of skills and expertise—it can help the company ensure quality, transparency, accountability and more.

Participation Pointers for Procurement Practitioners

There are a few ways to facilitate the adoption of innovative talent solutions regardless of the role your procurement organization is ready to play.

  1. Understand the landscape. The market is confused right now. That’s why it’s important for anyone who’s serious about strategic sourcing to develop a map of new solution/suppliers and a portfolio of high-potential options.
  2. Boost internal awareness. Ask executive sponsors like business unit heads, marketing executives, and innovation and strategy leaders to identify talent needs and gaps so you understand your internal customers’ needs and pain points. Which groups spend the most with traditional consulting firms? Which of your business partners express the most dissatisfaction with their option set or budget limitations?
  3. Assess your organization’s capacity. Many new talent solutions fall between traditional procurement categories. You will probably need operational and system modifications to ensure that your procurement organization and your legal and HR teams are set up to work with the growing group of independent talent solutions. Think about what new KPIs (e.g., project success, velocity), tools (e.g., contracts), processes and technology are needed.
  4. Search for opportunities to get involved. Find areas of the organization that have a need and are ready to move down the path, or may have already started. Get involved in a pilot. Many of the most progressive companies have an alliance between a procurement leader and a business leader to build this new capability for the company.
  5. Do something — become a Supporter, Enabler or Leader in the process. Doing nothing is not an option. (If you think it is, go back to the beginning of this series). Discover how, and therefore in what role, you can contribute the most at this time.

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