Most contingent workforce professionals can agree that a major reason to implement a Vendor Management System (VMS) as a part of a contingent worker program is collecting and analyzing the data that can be extracted. It is exciting to be able to report to leadership about how many external workers are contributing to the company’s goals, and how to maximize their value.

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With a VMS in place, the program can provide greater insight, such as keeping hiring managers in the know how much they have spent on contractors in the year to date. The functionality of the VMS can also be used to make sure all workers are following business processes by tracking onboarding and offboarding requirements.

But how can the data that is collected be used to strengthen a relationship with the external work suppliers we have invited to be part of the program? Through three steps: Plan, Communicate, and Report.

  1. Plan (Supplier KPIs and configure SAP Fieldglass accordingly)
  • Define the Key Performance Indicators (KPIs) that to which you expect suppliers to comply while participating in your program before you configure the VMS if possible. This will allow your system to capture all relevant KPI data from launch.
  1. Communicate (KPI plan to suppliers in an RFP)
  • If the plan is to release a request for proposal (RFP) to determine which suppliers participate in the program to engage contingent workers, you may want to think about communicating the specific program KPIs in the RFP document. In addition, asking for current data from the responders that reflects how they are doing with their existing customers is enlightening. The potential agencies will be fully aware of expectations if they win the business.
  1. Report (KPI results regularly to suppliers)
  • Suppliers really want to know how they are performing and appreciate the regular feedback. SAP Fieldglass offers functionality that allows the Buyer to create reports and deliver them to users on a consistent basis, including suppliers. The regularity of report delivery should be combined with a schedule to discuss the results in a transparent manner. The outcome should be that the client can easily determine which suppliers are high performing and which suppliers are having trouble understanding the business or if they even have the resources to respond to the company’s needs.

Following this process and using SAP Fieldglass for vendor reporting will strengthen the client/supplier relationship through regular transparent KPI conversations with the supplier about KPIs with data extracted from SAP Fieldglass. This creates an atmosphere of trust as all parties accept the data as valid. Best practices dictate that meetings take place each month, each quarter, and compare year-over-year activities. These meetings can be web-based, but at least once a year it is recommended to meet in person.

So, here are the payoffs for building that trusted relationship with suppliers:

  • Feedback that is offered for the program from the suppliers should be reviewed and considered. Suppliers participate in other contingent labor programs and can provide valuable feedback and suggestions about best practices.
  • Regular supplier contact makes it easier to have difficult conversations when they are needed.
  • Reviewing KPIs regularly allows for early intervention to make corrections so that supplier poor performance will come as no surprise to anyone, including and especially leadership. In a worst-case scenario, making a supplier change can be completed with little business interruption
  • If a supplier needs to be removed, it can be done with respect and allow for salvaging the relationship for future engagement.

Success of a program is ultimately measured by customer delight and this occurs when hiring managers find the right contractors at the right time at the right price. Suppliers are essential to an excellent external workforce program. The best partners are those that welcome KPI results and always work to achieve excellence. Clients can ensure vendor success by creating the right KPIs and continuously communicating the data generated in SAP Fieldglass.

For more on building an external workforce program, watch the Rizing HCM webcast “Enable total workforce management with SAP SuccessFactors Employee Central and SAP Fieldglass.’

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