Creating the Well-oiled Machine

Best practices for managing a massive contract workforce program

Creatingthewelloiledmachine 10269371
By Stan Mefford and Ed Bordi

In today's volatile economy, articles and advice on ways to slash costs and streamline operations abound. Procurement, HR and IT groups tasked with managing a contract workforce should always be focused on this goal — streamlining processes, implementing technology and looking for best practices both internally and externally. When implementing and maintaining contract workforce programs, organizations with the largest volumes of spend are faced with unique considerations, such as varying needs of distinct business units and regional entities and vast systems integrations. In addition, internal policies and cultural complexities grow exponentially with company size.

At Verizon, we recently undertook a major contract workforce transformation across our entire company, spanning three very distinct business units. In 2007 Verizon was using eight requisition processes and systems to manage managerial-level contract workers across these business units and associated divisions. We faced many challenges as a result, including:

  • Decentralized reporting: HR had to pull separate reports to account for contract worker spend, headcount or total workforce costs;
  • Processes for procuring contract workers were decentralized;
  • Challenging HR and Sarbanes Oxley (SOX) compliance issues; and,
  • A supplier base that had not been optimized.

We decided to streamline processes and standardize on one platform across the entire company. After a rigorous evaluation, we selected Fieldglass InSite as the technology platform to implement the entire company's contract talent. Some divisions within Verizon Wireless had been using InSite since 2001, and its tangible results, including decreased overall spend and bill rates, contributed to our decision.

When undertaking a large project of this nature, it is difficult to predict issues such as when to retire legacy systems or how to move between managed service providers (MSPs) — the groups that run the programs' day-to-day operations. Project owners should be prepared to quickly identify, categorize and mitigate risk.

We offer three primary approaches that assured the success of our massive contract workforce initiative:

Apply a phased approach and accommodate evolving business needs

With multiple business units and hundreds of spending categories, the most successful large contract workforce programs must be managed using a phased approach. This method allows you to better manage the process, track progress more easily and make systematic changes without overwhelming those required to enable the program. We expanded on this incremental approach two-fold, in terms of both program scope and depth. Once we migrated all three business units' contract workforce programs onto one platform, we continued to bring on board smaller groups of workers that had not yet converted. We even transitioned workers within our unique Business Continuity Planning (BCP) division, which is responsible for monitoring issues that could impact the business and for business continuity planning. This evolutionary process will continue. The next step is to move statement of work and project-based spend onto InSite and consolidate more legacy systems.

The second recommended way to take a phased approach is in regard to program depth. At Verizon, we migrated all the workers onto one platform to centralize and capture data, not necessarily to reinvent each group's way of doing business but to obtain a holistic view. A natural byproduct was that managers gained insight into their spending trends. This motivated them to look for new opportunities to increase efficiencies and savings by better leveraging suppliers, for example. Now, with a more detailed and in-depth view of actual spend and goals, Verizon designs efforts to better manage spend across the board.

Proactively communicate to effectively manage change

Without a doubt a major key to success in implementing an enterprise-wide contract workforce program is to communicate change effectively. With so many moving parts, including multiple business units, ERP systems and processes, a large implementation can seem daunting. The very first, and perhaps, most important, step is to outline the project to each group of stakeholders, from the top-level executives to the end users. Each group needs to understand the business drivers, expected timing, direct impact on the organization, expected benefits and even potential future initiatives. Communicating in this way will establish a clear understanding of the project from every aspect and help manage expectations. While tedious, this is a very important step that will set the tone from the beginning.

After establishing this baseline plan, all users must be properly trained on the system. Because we took a phased approach to the rollout, this process was more manageable and ultimately effective. If we had decided to move all our contract workers all at once, or if we had decided to upload contract or project-based workers, it would have been impossible to train and help all users adjust to the new system.

Institute a flexible program structure to preserve cultural nuances

Verizon is not unlike other large corporations that have grown, in part, by mergers or acquisitions. We recognized the importance of moving all workers to the same technology platform, while still allowing each group to choose how best to manage its unique programs. We decided to utilize InSite's "tenant" structure for this reason. It allowed different groupings of workers to be housed under separate tenants so they could be managed independently but still be viewed holistically.

Prior to the transition, Verizon's three business units — Business, Communications and Wireless — and divisions within those units were being managed as eight separate groups. A main goal of the project was to simplify this. We decided to establish a separate tenant for each one. This allows each unit to structure how it operates its contract workforce based on its unique needs. A small division continued to manage its program in-house, and the Wireless unit kept its successful and longstanding relationship with Adecco as its MSP. The Communications and Business units transitioned over to a new MSP, Bartech Workforce Management, chosen for its diversity expertise, depth of implementation knowledge and its longstanding relationship with Fieldglass.

The Results

By carefully defining a program ahead of the implementation and following the process outlined above, we achieved optimum results right from the start. Verizon was able to streamline its program by retiring four legacy systems, thus reducing systems integration points by more than half and creating synergies related to invoice process, procurement system and master suppliers. In regard to costs, it is estimated that Verizon will save $300 million over the next five years by automating a previously manual requisition process. In addition, we avoided approximately $2 million of cost in 2008 during the project's implementation.

Many business problems were solved as a result, including:

  • Centralized reporting and data for better visibility and management;
  • Improved contracts with suppliers as a result of greater leverage;
  • Auditable, time-stamped transactions across all contingent labor; and,
  • Consolidated invoice and payment process.

The project was recognized by the company, and 15 members of our team received the Verizon Performance Excellence Award for implementing a technology solution that truly revolutionized the contract workforce program.

About the Authors: Stan Mefford is the senior consultant for program and project management of supply chain systems for Verizon Service Operations. Ed Bordi is a manager of systems analysis and programming of information technology for Verizon Services Operations.

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