Motorola Takes on Services Procurement

Taps Elance solution to streamline buying, management of services; Elance releases upgrade

Sunnyvale, CA  February 24, 2003  Motorola has tapped solution provider Elance to provide a services procurement and management (SPM) application to streamline the buying and management of services.

The solution provider says its Elance 3 application provides capabilities for sourcing, procuring, managing suppliers and engagements, invoicing and analytical reporting. Elance today also announced the release of version 3.5 of its solution, which adds features that enable the contracting, procurement and management of complex service contracts, including volume of service contracts and service level agreements.

For its part, Motorola will initially deploy Elance 3 for a variety of service categories including information technology (IT) consulting, as well as software license procurement and management. Elance 3 will be integrated with Motorola's existing indirect e-procurement system.

The solution will be deployed domestically and globally in a number of phases throughout 2003 and 2004, ultimately making the Elance software available to tens of thousands of end-users. Motorola expects to manage more than $1 billion in outsourced services through the Elance software annually.

"Automating services procurement and management is the next logical step in Motorola's overall e-procurement strategy, representing a very large opportunity for cost savings and efficiency improvements," said Toby Redshaw, corporate vice president and director of IT strategy for Motorola.

Fabio Rosati, president and CEO of Elance, suggested that the SPM solution will help Motorola improve the way it sources, procures and manages a variety of services.

Motorola follows FedEx as an early adopter of Elance's SPM technology. The latter went live with Elance in August 2002 to manage all contract workers, including offshore IT staff.

Meanwhile, Elance today also released version 3.5 of its SPM application suite. The new version adds features that enable the contracting, procurement and management of complex service contracts, including volume of service contracts and service level agreements.

"Global 2000 companies are increasingly interested in the cost savings and visibility gains offered by services procurement and management solutions," said Rosati. "But to provide maximum return on investment, SPM solutions must address all types of service engagements. Elance 3.5 meets this requirement by allowing customers to model more complex services engagements, composed of multiple service types."

Elance says that 3.5's upgraded service category framework supports both simple and complex service contracts. The new version adds the ability to define "volume of service" rate structures to support services  such as call center contracts  that are charged based on a volume of service delivery. Version 3.5 also introduces support for service level agreement (SLA)-based, "continuous" service engagements, such as Web hosting agreements.

In addition, 3.5 adds enhanced support for services where payment is based on pre-defined project milestones, including "upon receipt," fixed payment and recurring milestones. And finally, the new version supports different types of time and expense-based services, from temporary labor, to project-based consulting, such as offshore IT development, and retainer-based services, such as legal services.

The solution supports both one-time and recurring service relationships. In addition, support for split line item accounting allows individual parts of a complex service to be attributed to different cost centers or projects, according to Elance.

New contract management and compliance features include support for master service agreements (MSAs) that are based on complex volume of service rate structures and milestone-based projects, and the application offers functionality designed to help companies track and adhere to the complex discount and penalty structures defined in most SLAs. The solution also enables the direct creation of new contracts to simplify the process of working with known suppliers.

New service engagement management features include "service receipts," intended to help users more easily manage service engagements at any point within the service lifecycle. Improved support for change orders allows work order and contract amendments to be made at any time, with automatic invoice generation and reconciliation based on the change order. And invoices now can be automatically generated and sent via either EDI (electronic data interchange) or XML methods.

Elance 3.5 is available now.

For more information on professional services procurement solutions, see the article "It's All About People," the Net Best Thing column in the January 2002 issue of iSource Business.