The effects of smooth procurement on contingent workforce optimization


One of the circumstances that make purchasing best procurement software a tough bargain is the effect these technologies execute on modern workforce management. According to a recent Ardent Partners’ study named The State of Contingent Workforce Management, procurement-led strategies pave the way of successful, non-traditional talent rule practices, and drive efficiency in creative teams. Put into perspective, this means that most of your small-biz’s performance revolves around affluent supply management, without you necessarily being aware of it.

How did procurement gain such importance in a talent-oriented world? Shouldn’t it be human resources software that we are discussing instead? All along experts’ efforts to ‘soften’ HR and ‘automate-to-our-benefit’ management skills we never really needed, procurement conformed itself with the role of an anonymous hero. We, as any lay audience that likes being told romantic stories of how business ought to flourish, took our time to swap that role for the one of a true cost-savior.

Nonetheless, we did. We not only activated procurement functions to manage spend more actively, but discovered an important collateral benefit: triggering efficient procurement to manage non-employee labor.

How does procurement software influence traditional and non-traditional labor management practices? Let’s see:

Without proper alignment between HR and procurement practices, there is little you can do to leverage the power of your workforce

Or, translated in plain English, you can’t know what your workforce is worth if you don’t know how much it costs. Sounds like an overambitious concept to put into action, but according to Ardent Partners’ study, more than 70% of all businesses and organizations expect workforce optimization to become a proper pillar of procurement suites in upcoming years. The only shortcut to enhancing productivity, as they say, is to centralize talent management resources regardless of where employees are coming from, and to capture all non-employee labor under existent cost, benefit, and compliance programs. The process won’t be simple at all, but workers are after all a natural wedge in supply chains, and incorporating recruitment in supply management solutions is a self-explanatory measure to get business up and moving.

Which will be the main benefit? In short, you are only ‘a procurement system away’ from purchasing works when you need them, and with the quality and quantity you need. Better yet, those works are reflected in all of your expense statements, and taken into account when planning your budget.

The expertise of supply managers is a critical source of freelance, service, and project-based workforce management wisdom

Like it or not, more and more business workers will come from places different than your regular employee database, are require you to govern their input under any type of consultancy, freelancing, or professional service acceptance policy. You will hire them for a single matter, project, or time-limited assistance, and figure out strategies to govern them outside the regular HR framework. Unfortunately, matters like these are rarely regulated by law, and the only internal standard to rely on will be the performance measurement components of your procurement tools and personnel.

Unified budget planning that will close the gaps between financial and HR processes

A great lesson we learnt from high-tier enterprises is that staffing plans are as good as they’re able to reflect unprovisioned changes. Described in HR terminology, this means that no budget draft without non-employee expenses can be perceived good enough to go. This, however, will be a daunting experience for those whose staffing plans include little to no financial information, and who must urgently add costs to their HR data. Tech specialists call this the ‘hub-and-spoke’ workforce planning model, and ascribe it the ultimate goal of planning contingent workforce costs in line with the rest of the company’s expenses.

Aligned HR and purchasing management improves total quality management (TQM)

Several years ago, the National Association of Purchasing Management examined the relationship between HR and purchasing management in an attempt to estimate its effect on total quality management in business environments. According to their findings, companies and organizations that consider (and pay formal attention to) purchasing employees achieve better TQM results compared to their counterparts. In fact, the most successful TQM performers were companies that perceive purchasing employees as a central part of their job planning strategies, being at the same time the only representatives on this list that find purchasing employees to be a rewarding practice. When asked to access their staff planning strategies, these companies described offering temporary jobs as an opportunity, rather than a risk.

Applied in conjunction with other productive technologies, procurement software improves the strategic position of any company

Despite of being overly optimistic with the HR+procurement idea, we didn’t fail to examine the benefits users are already experiencing with a traditional supply management tool in action. Companies and organizations which did a good job integrating their procurement system with other software record serious reductions in administrative working hours, and thus give employees more time to focus on competitive market strategies.

Overcoming the problem of employees’ reluctance to e-procurement: The solution hides behind your team

Maybe it is the complex workforce planning that makes procurement a less preferred operation among teams, or it is that teams that are suspicious to new software trends by default. Whatever the problem may be, you can overcome it choosing applications whose positive impact on productivity is clearly visible.

According to Batenburg’s 2007 study on implementing e-procurement software in Europe, companies reputed as risk adopters find it easier to implement procurement software, and that’s mainly because of their strong collaboration practices. Namely, teams with healthy information sharing habits and solid partner relationships are the most willing ones to entrust purchase management to a digitized solution, including one that will govern their performance and align it to the long-term goals of the company.

Ending thoughts

The market is about to welcome procurement software able to manage traditional and non-traditional talent, or it is at least well-prepared to do it. If nothing else, industry experts have confirmed procurement systems’ competence to drive successful and efficient budgeting practices based on sound purchase plans, and see no reason for depriving labor cost the right to be considered in these plans.

From an employer’s perspective, this means smarter budgeting and centralized asset management,  and a premium possibility to purchase the works he needs, when he needs them. Considering all expensive HR and budgeting applications that will disappear from the landscape, we call also agree that this is a very cost-efficient option.


About Author

Kate Stephens is a young and creative graphic designer as well as the mastermind behind her own startup company aimed at providing customers with reliable and often cheaper alternatives to various popular brands and products from all possible markets.

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