WED 14 MAY 13:45-14:45 WESTBOURNE 1 Concurrent Session: Thought Leadership Vendor Neutral vs Non- Vendor Neutral MSP What will Work Best for You? Moderator: Dawn McCartney, Director, Con7ngent Workforce Strategies & Research, Staffing Industry Analysts Panellists: Sallie Crook, Associate, BrighEield Strategies Erik Ekström, VP, Sales EMEA, ZeroChaos Michael Werblun, EVP, ZeroChaos Sponsored by: 13-14 May 2014 Lancaster Hotel
Vendor neutrality
Market-influenced definition of neutrality Vendor Neutrality: A term used to describe a model in which a managed services or VMS technology handles its tasks based on client-defined policies that mandate that all staffing suppliers (vendors) be given an equal opportunity to fill each order or are selected for each order based on the same criteria. Staffing Industry Analysts An appropriate division of labor and separation of interests between staffing fulfillment and program management. Human Capital Institute 3
Definition of true neutrality Vendor Neutrality: A state in which no affilia(on exists between an MSP provider and a staffing/service provider. Truly neutral models Non-neutral models Board of Directors Board of Directors Board of Directors MSP Provider Staffing Company Holding Company Wholly-Owned MSP Subsidiary Customer Customer 4 MSP Division Staffing Division Customer
The proof is in the profits 20.47% 16.13% 16.92% 17.8% 17.83% 3.8% Company 1 Company 2 Company 3 Company 4 Average Truly neutral Non- neutral MSPs 5 5
Freedom to innovate A truly neutral MSP is willing to drive expenditure to your lowest- cost talent pools not 7ed to individual margins. 6
Innovation under true neutrality F500 customer Crowdsourcing program Pushed technology development work to independent contractors in low cost countries Significant cost savings 800 developers 98% project success Talent pool owned by customer 7
How does it impact you? MSP organiza7onal priority MSP independence from conflict Supplier trust and engagement True customer alignment Expanding the scope to new markets and regions It is the only way for a customer to receive customer centric agnos7c advice 8
Neutrality and reality The three major drivers for MSP in Europe: Cost savings Control and visibility Vendor Neutral MSP Finding the right Talent/CW 9
Optimizing Supplier Performance Business Needs Assessment Alignment to objectives and goals Determine supplier mix (global, regional, national, niche, local) and develop supplier evaluation criteria > 90% Rationalization of suppliers Optimize all existing suppliers, understand their capabilities, and review their past performance Change management Develop and manage supplier performance improvement Action plan including routine audits Quality surveys Diversity and community initiatives Ra(onalize exis(ng suppliers and applying ZeroChaos op(miza(on methodologies minimizes disrup(on and promotes adop(on 10
What do customers say? From our point of view, we never even consider working with an MSP that wouldn t be Vendor Neutral. We don t believe that that you can be a part of the supply chain and in the same 7me work for the customer s best interest. Director Procurement, indirect purchasing The vendor neutral MSP/VMS solu7on has provided increased visibility and control over our Statement of Work program spend. This has ul7mately improved our strategic planning and influenced our policy decisions for service provider op7miza7on, program compliance and cost save measures Senior Manager, Strategic Sourcing We had a Master Vendor solu7on in place handled by a staffing company. What we found out was that almost every posi7on was filled by the agency s own workers. Once we shibed to the neutral MSP model and they started to put every requisi7on under higher compe77on, we saved money and were able to bring on new suppliers who wouldn t work for the Master Vendor Chief Procurement Officer 11
Case: Global medical technology company The challenge The client stood in front of large challenges. They wanted to increase quality, efficiency, control and visibility in their procurement of consultants within the R&D department and during the same time achieve major savings Eliminate Maverick spend Reduce the administrative burden A single supplier agreement that mirror all agreements to supplier. The Solution Implement MSP solution with integrated VMS-tool One streamlined process for requisitions, approval and payment Opened up bidding process to much wider range of suppliers resulted in competitive pricing and significant cost savings Adding data from client into VMS for increased visibility and control of the purchasing process The Result Cost savings, 16,6% on new request, 10 % on renegotiated The end of Maverick spending and elimination of sub-contractors 18 hours from request to CV Wider base of supplier (competence), higher degree of competition between suppliers (cost savings) Reduced administration burden due to automated processes (VMS) and more effective processes to work with. Reporting and visibility of the entire program opens up for wellinformed decision-making From 31 to 1 suppliers (legally) and from 31 to 110 Operationally 12 MSP for Medical tech company Headcount: Around 220 consultants Scope: R&D, 5 business units, around 20 line managers Yearly spend in the CW program: 18 million Euro 1 2 3 Implementation & Transition Go-live Daily operation Program setup including establish new rate cards and competence matrix Streamlined processes for req, approval and payment. Dedicated team onsite that handle all new requisitions and admin
Exceptions Isolated/rural loca7ons On demand/day labor Regional talent pools Recruitment Process Outsourcing (RPO) Re7ree programs 13
What Do The Consultants Say? We stay independent and able to disagree, regardless of the popularity of our views or their effect on our fees. We have the courage to invent and champion unconven7onal solu7ons to problems. One of the most visible demonstra7ons of our integrity is our ability to be independent and objec7ve in providing services and advice to our clients. In order to render such unbiased (or independent) judgments, we must each be free of perceived or actual conflicts of interest with our clients. 14 14
A New Definition Independent + Unbiased + Free From Conflict = Vendor Neutral True neutrality requires that no affilia7on exist between an MSP provider and a staffing/service provider, whether through direct or common ownership. 15 15
ZeroChaos overview Specialized on efficient management of con7ngent workforce Over 300 enterprise customers 1,000+ total customers globally Over 100,000 workers managed Y- to- Y 8,000 suppliers globally Over 2,3 Billion Euros in spend managed Vendor Neutral MSP Top 10 Workforce Outsourcing Providers SOC1 Cer7fied (formerly SAS70 Type II) SIA Top Overall Performer MSP HROA Thought Leader of the Year Peter Yessne Award for Innova7on HRO Baker's Dozen Savings: An average of 10,3 % in savings in our Managed Service Programs Client sazsfaczon: Best of Staffing Diamond Award - ZeroChaos customer Net Promoter Score was more than nine 7mes the industry average, with the industry as a whole scoring 8%, while ZeroChaos score was over 76%. 16
Sallie Crook 13-14 May 2014 Lancaster Hotel
Vendor Neutral MSP what worked well.. Provider s sole focus was on oversight and success of the overall program solu7on, not on filling posi7ons Focus was on filling the posi7on with a quality candidate regardless of staffing agency Introduce niche suppliers as required into the program or look outside PSL for a one off posi7on. Ensured all staffing agencies felt there was a level playing field Created a high degree of compe77on at the transac7onal level on every posi7on requirement Created highly compe77ve program dynamic, resul7ng in lower rates and beper supplier performance Greater checks and balances, truly working in partnership with client