3 pm GMT/4pm CET 7am PST/10 am EST SOW & Project Services ... · SOW & Project Services: Are...

©2015 by Crain Communications Inc. All rights reserved.Confidential Report – NOT for Distribution | ©2015 by Crain Communications Inc. All rights reserved.

SOW & Project Services: Are Europeans Late Adopters?Presented by:

Bryan Peña, VP, Contingent Workforce Strategies and Research, Staffing Industry Analysts

Manuel Roger , SVP EMEA Markets and Operations, Beeline

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25 March, 2015

3 pm GMT/4pm CET

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Our speakers today…

Bryan Peña, VP, Contingent Workforce Strategies & Research, Staffing Industry Analysts

Manuel Roger, SVP EMEA Markets and Operations,Beeline

Confidential Report – NOT for Distribution | ©2015 by Crain Communications Inc. All rights reserved.

Questions

Time for a poll?


Agenda

• SOW and Project Services

– What does the data say?

• How does this differ from “Staffing

Procurement”

• Elements of the Services Procurement

Market

• Are Europeans late adopters?

– Why/Why Not?


Programs are evolving….

Buyers are changing….hopefully

Adoption Curve

Innovators Early

Adopters

Early Majority Late Majority Laggards

Enthusiasts

Visionaries

Pragmatists

Conservatives

Skeptics

For now…..

Decentralized• Several suppliers

• Procurement done

on an ad-hoc basis

• Management

done internally

Master Vendor• One supplier

(possibly

managing 2nd and

3rd tier suppliers)

• One point of

contact

• Direct cost savings

on bill rate and

usage

• Customized SLA’s

and process

Managed

Service

Provider (MSP)• Contingent

workforce spend

under management

• One contact point


on bill rate/usage


and process

• Non-compliant

spend elimination

• Total cost of

ownership savings

Total Talent

Management • Total workforce

spend under

management

• Complete workforce

visibility


on bill rate and

usage


and process

• Non-compliant

spend elimination

• Increased total

cost of ownership

savings

• Additional

productivity and

process savings

• High degree of

value added services

CW as a

Strategic

Competitive

Advantage

• CW talent as

business

differentiator

• Management

strategies move

beyond tactical

considerations into

strategic ones

• Combination of

multiple CW models

to solve complex

business problems.

• Technology crosses

multiple platforms

in the enterprise

• Risks managed on a

total enterprise basis

with big picture

focus on risks of

action and inaction

Preferred

suppliers• Selective set of

suppliers selected

• Contracts in place

• Service level

agreements

(SLA’s) in place

Procurement

HR

Buyer Plans: 2014

Vendor Management Strategies

SOW management – “Services Procurement”

What is it? How does it work?

March 25, 201519

What is Services Procurement?

“Services Procurement is a process for

buying and managing strategic & non-strategic services and consultancy

through a Statement of Work (SOW)”

Services can be procured either on a fixed-priceor a time-and-materials basis.

Services Procurement vs. (Temp) Staffing Procurement

Temporary Staffing Services & Consultancy

General Staffing Professional Staffing Services Procurement

• Client is buying a person to staff augment their workforce

• Adds capacity, flexibility, and scalability

• Resource managed by the client (user company)

• Staffing law & regulations applicable (AWR, Phasing, Equal pay, etc.)

• Time & Material – compensated by the hour

• 3-party contractual relationship (Client / Temp. staff / Staffing agency)

• MSA – pre-agreed T&C

• Client is buying a service

• Adds expertise / Know-how

• Supplier managing and responsible for the delivery

• No (direct) link to staffing legislation / regulation

• Fixed priced – Delivery based – Milestones

• Bilateral commercial relationship (Client / Suppliers)

• MSA – T&C negotiated case by case in SOW

• Commoditised skills

• Task oriented/lower value

• Repeatable hiring process

• Weekly workers

• Short assignments (H – D - W)

• High value added

• Project oriented

• Thorough hiring process

• Monthly workers

• Longer assignments (W – M)

• Specialised skills not inherent to current staff

• Project oriented

• High value / high cost / high risk

• Fragmented

• Complex contracts and deliverables

• Longer time frames (M)

Candidate - Worker - Resume - Interview - Earning code / Coefficient /

Markup

Consultant – Skills / Know-how - SOW – SLA – Delivery based

– Milestone – Service

22

AW

AR

D

Source Engage Manage Report

Build Bid & Release to Vendors

Negotiate & Finalise SOW

ManageProject

Report

Review Bid Submission

Build SOW from Template

1 2 3 4

PR

OJ

EC

T

INV

OIC

E

AN

ALY

SIS

OverseeComplete work

All steps can be managed within an appropriately configured VMS

Services Procurement – How does it work?

SOW management – “Services Procurement”Some insights on the market

March 25, 201523

Ciett 2014 Economic ReportAgency Workers

36 million temporary workers

11.5 millionjobs

300 billion eurosspend

36.5%Europe’s share of global market

28.9%United States share of global market

Global Temporary (Contingent) Staffing

1.6%Europe

2.0%United States

3.5%United Kingdom

Agency Worker Penetration Rates

© Prisme

11 500

2 696

96

3,5%

1 500

18 667

350

1,9%

9 078

4 583

95

2,1%

3 540

2 458

59

2,4%

363

63 085

331

0,5%

85

296 471

2 529

0,9%

142

34 507

599

1,7%

500

9 800

130

1,3%

265

19 623

264

1,3%

# ETT différents

Population active / ETT

ETP Intérim / ETT

Tx de pénétration TT

# Staffing agencies

Active population / supplier

FTE staffing / Supplier

% Penetration rate

Liberal Legislation

Restrictive Legislation

European Temp Staffing Market Structure

$354.7

$250.5$122.1

$345.2

Value of SOW by Sector ($bn)

IT Consultancy Law Accountancy

Asia Pacific Europe Americas Rest of World

Total by Sector

Information Technology 67.5 105.5 173.2 8.5 354.7

Corporate Strategy 2.3 15.8 47.8 0.4 66.3

Operations Management 8.3 38.5 49.4 0.5 96.8

Human Resources Management

6.8 9.9 21.7 0.2 38.7

Other Consultancy 3.1 15.1 30.3 0.3 48.7

Law 16.1 36.9 67.4 1.7 122.1

Accountancy 43.8 133.2 159.8 8.3 345.2

Total by Region 148.0 354.9 549.6 19.9 1.072.4

Value of SOW by Region (USD billion)

Source: Staffing Industry Analysts Global Contingent Market Estimate, 9 March, 2015 (based on Informa MarketLine 2013 data)

$354

$1,055

$1,072

$673

Value of Contingent Work ($bn)

TAW (FTE) Independent Contractors SOW Other Temporaries

Europe is 33% of SOW spend

SOW is 34% of global spend

SOW is 3x Temporary Agency Work (TAW)– I/C is 3x TAW

Spend (

€B

illio

ns)

of Top 3

Glo

bal V

MS

Europe trailing in VMS adoption

March 25, 201528

SOW management growing more slowly than Contingent Staffing in Europe. Why?

More fragmented spend and markets

Market less mature & structured

Niche suppliers

Staff Aug first – then SOW

Professional Services considered:

– “too strategic”

– “too difficult”

– “too risky”

for indirect procurement to manage

EMEA laws/regulations are complex – Perceived risk

Are MSPs ready?

Possible explanations

Many organisations use ERP and eProcurement

– Right tools for buying goods and commodity services

from a catalog

– Wrong tools for managing SOWs

Unaware of VMS’ ability to manage Services Procurement

– Just learning value of VMS for Contingent Staffing

– Not aware that “staff aug tool” can solve same

problems for

Services Procurement

Misunderstanding about tools to use

“I have untracked workers in my facilities.”

“My managers go outside

our systems & processes

to procure projects.”

“Non-standard SOWs require additional

reviews that create bottlenecks in our

process.”

“Manual processes have

caused delayed payments and

gaps in productivity.”

“We continue to use poorly

performing suppliers that deliver

late.”

“Our only performance

reports are generated by

our suppliers.”

“I have no visibility or safeguards to know

if suppliers are following our rules and

regulations.”

“I don’t know our true amount of spend

for services.”

“We’ve used consultants when a lower priced

contractor would have been more

appropriate.”

“Our managers have ‘reused’ project funds or purchase orders

to bill for unplanned work.”

What we hear…

Early adopter? Lagger? Still thinking about it?

Does your organization have a process in place to manage your

SOW/Services Procurement engagements?

A. Yes

B. Somewhat

C. No

D. Not sure

E. What do you mean?

What about you?

Recap – now you know:

• The core elements of Services Procurement management

- What it is

- Where it fits

- Significance as percentage of overall extended workforce

spend

• Reasons for slower adoption rate in Europe

• There is light a the end of the tunnel

Innovative organisations increasingly engage consultants and outsourced services as a way to achieve leaner, tighter business models. Engaging outside experts can reduce costs while helping businesses become more competitive and improve customer service, but only if the services procurement process is well managed. Learn how.

Download our whitepaper at

http://www.beeline.com/thought-leadership/whitepapers/services-procurement/

Services Procurement Management: Optimise the Value of Your Extended Workforce

Contact information:

Manuel RogerSVP EMEA Markets and [email protected] House, 6 Kean Street, London, WC2B 4AS

Thank You!

Thanks!!!!!

Mark Your Calendar

2015 Contingent

Workforce Conferences

CWS Summit Europe | April 21-22 Hotel Okura, Amsterdam | cwssummiteu.com

CWS Summit Asia Pacific | July 22-23Shangri-La Hotel, Singapore | cwssummitap.com

CWS Summit North America | October 19-20CW Solutions Forum | October 21-22Omni Dallas Hotel, Dallas, TX cwsolutionsforum.com | cwssummit.com


Take the class.CCWP is the only accreditation program for the CW

management professional.

Pass the test.CCWP certification is earned by taking the

class and passing a rigorous certification exam.

Get Certified.Join an elite brand of industry professionals and get the

respect and recognition you deserve.


New 2015 Dates:

March 17th & 18th (Tue/Wed) Orlando, FL

April 14th & 15th (Tues/Wed) NYC, NY (Pfizer)

May 12th & 13th (Tue/Wed) Washington, DC

July 14th & 15th (Tue/Wed) Chicago, IL

Oct 6th & 7th (Tue/Wed) London, UK

Oct 21st & 22nd (Wed/Thur) Dallas, TX

Dec 8th & 9th (Tue/Wed) Northern California

Contact Member Services for more information:

Phone: +44 (0)203 478 5287 or

Email: [email protected]

Join us next time for:

Managing Risk & Understanding Operating Models

For European Programmes

29 April, 2015

3 pm GMT/4pm CET

7am PST/10 am EST

Full schedule at www.staffingindustry.com

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