Strategic Technology Planning: A New Imperative for Contingent Workforce and Services Procurement (Part 2)

In Part 1 of this series, we provided a context and rationale for the adoption of strategic technology planning for contingent workforce and services (CW/S) procurement. We also began the discussion of what strategic technology planning explicitly means for an organization and how it can be enacted. Part 2 of this series continues that discussion.

By way of summary, we defined “strategic technology planning” as a specific type of strategic planning that lets an organization (i.e., CW/S procurement) know where it is now, where it wants or needs to be some time in the future, how technology can be leveraged as an enabler and what changes in resource allocation and investment must occur or what constraints will condition progress. We should emphasize that strategic technology planning is not the same as a tactical plan or roadmap, though ideally it would lead to these.

Strategic planning is more about high-level understanding (insight and foresight) than it is about immediate, direct action. We believe it must become a critical component to any CW/S procurement function and program that wants to avoid being caught flat-footed and aims to deliver a new (and necessary) level of business value over a reasonable planning horizon (e.g., three to five years). This type of planning effort may represent a shift of gears for many procurement practitioners. For this and other reasons, we suggest and outline a process in this Spend Matters Plus research brief that is intended to help practitioners get started and pointed in the right direction.

The Strategic Technology Planning Process

First, it is important to note that strategic technology planning is not just about new technology-based solutions — it is about creating business value by supporting the activities of business end users. It means providing the broader organization with efficient access to new forms and sources of human resources/capabilities and services. Spend Matters research suggests that this is considerably more important now than in the past, in part because established supply channels and sources are being disrupted by new forms of “direct” access to external talent.

From the Spend Matters standpoint, the strategic planning process consists of three basic stages:

This is a process that starts “in the weeds” (most of the heavy lifting in the first two stages, especially Stage 1). Below, we unpack each of these stages.

Stage 1: Researching

The first stage is basically about establishing an information baseline. It consists of three separate research activities, conducted in parallel. A reasonable target timeframe for completing Stage 1 (given time and resource constraints of a procurement function) could be up to six months. (Using a third-party research and advisory firm would shorten this time frame and reduce the applied time of internal staff.)

Stage 1: Researching

Understand Business’ CW/S Requirements/Expectations

It is totally fundamental to get a clear and comprehensive grasp of the business’ unmet needs and expectations with respect to sourcing and utilizing contingent workforce and services. For example, is there a desire to use online freelancers? Information should be gathered across a spectrum of business personnel from top management down to the level of the functional managers that actual initiate sourcing events. It is likely that different areas of the businesses will have very different needs. Given the scope of this task, using an online survey tool may be the best way to go; some sort of sampling may be necessary in a large business.

Understand Current CW/S Technology Solutions Inventory

It is essential to have an inventory of technology solutions that are (or no longer) supporting CW/S procurement activities. While some rely just on ERP, most large businesses will have at least one VMS. Is it legacy or “state of the art?” Is the functionality adequate? What about invoicing and payments? Are there other point solutions? Are there “rogue” solutions, like departments using external online talent platforms? It is critical to understand what solutions are in the business today, what they do, what they are used for, how they come together. Since procurement is basically focused on sourcing, contracting, etc., and not asset management, partnering with IT, Finance and HR may be necessary.

Understand CW/S Emerging Technology Solutions and Trends

An examination and analysis of the current technology-based solution environment and where it is headed obviously goes to the heart of this whole planning process. As new technologies become available and new needs/requirements arise in organizations or are expressed by business users, new solution opportunities emerge for new and existing solution providers. It is necessary to develop a clear picture of these different solutions, where they are trending and what other solutions may arise (doing this may require or be greatly facilitated by an expert third party). It is possible that solutions are emerging that address problems business users never thought of or are current low priorities because they seem infeasible.

There is another activity that should be ongoing, too: having some understanding of what is happening or what is being thought about in peer procurement organizations. This tends to happen in the course of normal professional networking with colleagues at other companies or conferences.

At the conclusion of Stage 1, a complete information set has been assembled to proceed with the Stage 2 analysis.

Stage 2: Analyzing

Stage 2 is essentially about bringing it all together and connecting the dots (i.e., business needs, technology solution gaps, emerging/future technology solutions) to identify potential, high-value combinations that will support execution of the company mission well into the future. It consists of a sequence of three steps. A reasonable target time-frame for completing Stage 2 (given time and resource constraints of a procurement function) would be six to eight weeks. A third-party research firm could prove helpful in identifying which technology solutions (current, emerging and future) could be applicable and could potentially help accelerate this time-frame, as well.

Stage 2: Analyzing

Analyze and Synthesize Potential Business Opportunities

The next step in the process is to review and, to make sure they are understood, analyze the potential business opportunities in greater detail. In the process, these opportunities should be clearly documented. The should also be a synthesis of opportunities — for example, when many users or groups have expressed the same or similar interests/requirements or when procurement is able to see a broader opportunity than that expressed in specific business user inputs.

Match Business Opportunities with Technology Solutions

Using the template below (or similar), identify from the CW/S “technology solution inventory” and emerging technology solutions and trends that could each given opportunity. Solutions should be identified by whether they are current, are emerging or are only likely or possible in the future. Some solutions can be identified with more than category. For example, a solution may be currently in an emerging state, with an expectation that a more robust and functional solution will be available in the future.

Narrow Down Top Opportunities and Related Technology Solutions

Select the top five or more opportunities based on the highest potential benefits estimated. Out of these, identify all associated technology solutions across those top opportunities. Note that some of these technology solutions may address more than one opportunity. In any case, all of the technology solutions that have been identified will constitute the key areas of technology where the organization should be focused to aim for maximum benefit.

It is worth emphasizing again technology planning is not planning for technology solutions in isolation, rather in relation to business needs/requirements. It is this filtering that narrows the focus on a more manageable set of technology solutions that can be mapped over time, aligns to business value and ensures relevance within the organization.

Stage 3: Planning

Stage 2 is basically the articulation of a coherent vision and the formulation of high-level plan with respect to where the organization will go from here in terms of CW/S technology solutions. A reasonable target time frame for completing this stage (given time and resource constraints of a procurement function) would be about one month.

At this stage, the heavy lifting has been done, and the rest is basically a synthesis and presentation of the information, analysis and judgments of the prior two stages of the process. It should be noted that this strategic technology plan is not only a guidance instrument for procurement, but will also be consumed by senior management.

The following is suggested as a strategic technology planning document outline:

• Statement of the organization’s CW/S technology solutions vision
• Discussion of evolving CW/S technology solutions landscape
  • Current inventory
  • New technologies and trends
  • New kinds of solutions
• Review of specific business opportunities (1-N) identified as priorities:
  • Descriptions and explanations of opportunities 1-N
  • Estimated value (benefits) of opportunities 1-N
• Review of technology solutions that can enable capitalizing on opportunities 1-N
  • Descriptions and explanation of types of technology solutions
  • Maturity of the different types of solutions (current, emerging, future)
  • High-level budgetary cost estimates for implementing specific solutions to address specific opportunities
• Articulation of high-level three- to five-year plan and conditional timeline to pursue specific opportunities, with any adjustment of opportunity prioritization/timeline based on:
  • Budgetary assumptions
  • Technology solution maturity (e.g., can’t implement what is not available, etc.)
  • Organizational readiness
• Note opportunity costs of not moving forward

The content of this document will represent services procurement’s seriousness about moving the business into a future where the innovative organization of workforce, talent and services becomes ever more critical and where technology is a foremost enabler of that innovation and the benefits that will be derived from it.

Conclusion

As discussed in Part 1 of this series, a need for strategic technology planning has recently arisen for CW/S procurement due to at least two changes in the environment.

First, CW/S sourcing options have been static for quite some time. Not only are they reaching a point of diminishing marginal returns, they are also being perceived by business users as inadequate in an increasing number of important use cases.

Second, new technology is giving rise to new ways to source and consume what is needed by business users, while giving procurement an ability to manage the buying and consumption of workforce, talent and services.

This kind of planning exercise is typically unprecedented for most CW/S functions, so it really is a groundbreaking exercise for procurement. It is likely to be as eye opening as it is challenging. However, given the changes in technology solutions and related opportunities that are likely to occur in the coming years, not beginning to understand and prepare seems risky.

There is no established methodology for going through this process, and every organization/business is different. In this series, we have presented a guide to how such a process may be conducted. If nothing else it may serve as catalyst for thinking about this planning activity, realizing its importance and considering suitable steps to begin to address it. This is definitely a case where making some steps in the right direction is much better than standing still.