The Coronavirus Response survey — In the procurement trenches with ISG/SpendHQ

Having worked for a few management consultancies, I can confirm the validity of the adage that consultants age in dog years — and also gain experience in dog years. So, if you’re interested in seeing a concentrated view into the coronavirus response work happening out in the field, it’s really useful to look at what one of the leading procurement consultancies is doing.

That firm is Insight Sourcing Group (ISG). ISG — not to be confused with the other ISGs like Information Services Group or SAP Intelligent Spend Group — has earned its seventh straight badge as one of our “50 Providers to Know” list (perhaps we should retire ISG and a few others to a “hall of fame” list and free up room for others) because of its prowess in transformation, category insights and a world-class analytics capability with its SpendHQ subsidiary.

We’ve asked organizations of all stripes to contribute to our Coronavirus Response series, which highlights solutions that can help in a crisis. (See the intro piece here for an overview). The responses from providers have been extremely diverse (and we’re still accepting input via our survey.)

But the ISG response that we received is so thorough and thoughtful that I’ve decided to simply publish it in its entirety in the Q&A style format that we used. ISG has a COVID-19 response site of its own here, and the firm features an interesting case study on how it helped a dialysis provider tactically source personal protective equipment (PPE) but also, more strategically, how it helped the client visualize and plan its site-level supply positions and spending requirements for critical spending.

Without further delay, here’s the multi-faceted ISG coronavirus response that it's pursuing with clients and also internally. We’d like to thank ISG for its input, and we’ll be featuring a few more deep dives like this in the coming weeks.

Q&A

Spend Matters: What are the biggest COVID-19 related issues that you're seeing in your customer base?

ISG: The top issues that we’re seeing are in the following areas:

  • Employee Health and Safety
  • Supply Chain Continuity
  • Acquisition of PPE and Cleaning Supplies
  • Cash Management
  • Rapid Cost Reduction to Preserve Margin
  • Planning for Re-engagement

How have your customers asked you to help them in dealing with these issues?

Given our focus on spend visibility, cost optimization and cost realization, our clients are seeking our help in related areas, including:

  • Assessing and addressing risk within their supply chain
  • Providing creative suggestions to drive cash preservation
  • Identifying and prioritizing opportunities for savings
  • Providing the insights, recommendations and best practices that enable the process and policy changes required to drive all of the above

What have you developed in response to customer needs?

We have rapidly refined our service offerings to focus on the things that are the most value-added at this time, and we’re already performing the following for our clients:

  • Supply Chain Continuity and Resilience Analysis and Tracking
  • COVID Impact Data Dashboards/Tracking
  • PPE Specific Supplier Risk Analysis and Tracking
  • PPE and Cleaning Supplies Supplier Identification
  • Stop Spend Rapid Diagnostic
  • Category Crisis Management (Category Specific Management Programs)
  • Zero-Based Budgeting Through Spend Benchmarking
  • Leveraged Sourcing Events
  • Facilitation of Third-Party Funding Mechanisms Supporting Cap-Intensive Energy Projects

Our response has required us to challenge, innovate and create in all of the areas you identified: process, technology, content, methodology, services offered as well as how we support our internal and external community. We’re leveraging our spend visibility and data visualization technology and knowledge to provide dashboards and a roadmap of where clients should focus their energy and effort. We’re also leveraging our deep procurement and sourcing experience, including the methodologies and expertise we’ve developed over the last 17 years and refined in the current market. We’re using our innovative services model focused on savings realization, which is a combination of cutting-edge technology and deep category expertise, to ensure the savings we’re helping our client achieve are effectively realized and enhanced.

As a firm that is connecting with so many clients and suppliers in the evolving market, we’ve also embraced the role of being a clearinghouse for best practices, creative ideas and insights into what’s working and what’s not across the entire community of companies that we’re privileged to work with. We've strongly encouraged all of our employees to seek opportunities to serve and connect the wider community during these times. Our service team developed a multi-page list of ways to help while still not traveling and maintaining appropriate social distancing, and our team has responded in amazing and impactful ways.

We’re also being creative with customers and prospects relative to fee structures for our services. We’re developing no-cost roadmaps to savings opportunity for our spend visibility clients, we’re underwriting low-cost assessments with customers and prospects who can benefit from them, we’re looking at hybrid performance fee models for consulting clients, and we’re leveraging vendor-paid fees with no direct client cost for many of our Insight Analytics and Energy customers. In addition, we’ve helped a number of clients, with especially acute needs, identify new PPE and cleaning supplies sources at no cost.

What types of early benefits (quantitative or qualitative) are emerging from your coronavirus response efforts to aid clients?

We believe that while this is an extremely challenging time, it also opens the door to new opportunities and inspiration. We’re seeing clients assess and rethink the diversification of their global supply base, re-evaluate spend categories they wouldn’t have normally touched from a price and demand perspective, and reconsider from ground zero where they’re spending their money and if they should.

Clients are also embracing ideas and best practices from other companies, throwing out the door any not-invented-here mentality or roadblocks, and getting more creative and innovative about what they can do to avoid more difficult cost-cutting decisions related to personnel and operations. Relative to the sourcing efforts and cost optimization, we’re helping facilitate on behalf of our clients, the results have been extremely successful, resulting in material savings (double digit %s) as vendors are motivated to maintain or acquire business in an uncertain market.

How do you think you might see this response evolving in the next 18 months for your clients and for your solutions/capabilities?

A crisis can create clarity and change for the companies that survive the experience. It can force a different set of values and practices driven by what was required to emerge on the other side. It forces services companies, like ours, to innovate and refine and get more focused on what drives value for their clients, leading to many of the refinements our services have already undergone. We expect that there will be new ways companies, including ours, regard remote work environments, on-site consulting, video-based conversations/events, cash reserve requirements, relationships with their banks, etc. We strongly believe the demand for our services will be extraordinarily high over the next 18 months because there will be a priority and long-lasting focus on supply chain visibility and continuity, cash management, cost optimization and savings realization.

Outside of your area, what's the biggest pain point, topic, unmet need, undiscussed topic or anything else that should be explored?

The economic consequences of this crisis on the global and domestic economy are unlike anything we’ve seen, and everyone is interested in the ripple effect and how long it will take to get back to normal, or at least whatever our new normal will be. The look beyond the immediate and how the current events will affect global supply chains and markets would be valuable given the short-term view that is so prominent in everyone’s perspective today.

What are the biggest COVID-19 related issues that you're dealing with at YOUR firm?

Given how quickly things are changing, maintaining transparent and open lines of communications with all remote employees has been critical, and providing them perspective and clarity on the future has been challenging. Given the State of Emergency and Shelter-in-Place mandates across the country, traveling to meet with customers and prospects is impossible. That makes it challenging to build new relationships and sell additional work at this time. In the meantime, we’re keeping busy driving value with current clients, and trying to strengthen and build on those relationships until companies in general recover from the current shock and open their doors to more strategic decision-making and new business.

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