Inside an unprecedented MSP for complex contingent workforce management.
Interview with Doug Cutrell, director of professional services, and Mary Hassler, program manager for professional services, at Siemens
Siemens AG (NYSE: SI) is a global powerhouse in electronics and electrical engineering, and operates in the industry, energy, and healthcare sectors. For more than 160 years, Siemens has built a reputation for leading-edge innovation and the quality of its products, services, and solutions. With 405,000 employees in 190 countries, Siemens reported worldwide sales of $102.9 billion in fiscal 2010.
Siemens’ United States headquarters is in Washington, D.C., and reported sales of $19.9 billion—employing more than 60,000 people throughout all 50 states and Puerto Rico.
IN PURSUIT OF STREAMLINING
As a global giant, Siemens’ contingent workforce was large and growing, and the procurement process was complex. The goal was to have a single point of contact, a single platform, and a single supplier. Siemens wanted to streamline the contingent workforce program and make it more efficient, cost-effective, and transparent. There wasn’t a central IT system, nor was there an easy way to compare costs and supplier quality. A strong and consistent compliance program was another key goal.
SourceRight Solutions, which had been working with Siemens Healthcare since 2006, was awarded a multiyear contract renewal and a significant expansion of its service footprint to additional business units in a competitive selection process. SourceRight’s resources, knowledge, and technical expertise to run a highly complex MSP were contributing factors to the win.
With a demonstrated ability to run complex managed services programs (MSPs) for companies worldwide, SourceRight took an innovative approach, with an inclusive supplier program, cost transparency, and significant cost savings.
The solution is designed to enhance compliance, increase efficiencies, improve cost-effectiveness, and centralize management and operations for the procurement of more than 5,000 contingent labor positions. The SourceRight program encompasses Siemens operations in nearly all 50 states, as well as Canada and Puerto Rico. SourceRight manages supply chain strategies across all Siemens job families, including IT, engineering, professional, technical, administrative, light and heavy industrial.
To overcome one of the major hurdles Siemens faced—an inability to evaluate its contingent labor programs—SourceRight’s centralized MSP not only drives measurable advantages in terms of cost, quality of hires, and efficiency, but also establishes meaningful metrics.
In the U.S., the Siemens/SourceRight solution is the first MSP designed in this unique commercial configuration on the Fieldglass technology platform, which is aimed at neutralizing the economic strains that both staffing suppliers and large employers are facing. SourceRight’s optimized services approach enables all parties, including suppliers, Siemens, and SourceRight, to have a clear view of the program’s financial structure, achieve cost advantages, and increase efficiencies, while delivering high-quality talent. Specific benefits of the delivery structure include:
• A break-out of statutory costs, such
as state, unemployment, social security, and workers’ compensation to provide maximum cost transparency and minimize risk exposure;
• Graduated supplier gross markups
based on sourcing demands and difficulty levels by job family;
• Realization of cost savings
through tenure discounts and volume incentives;
• Distribution of volume incentives
based on market share to ensure equity across suppliers; and
• Process optimization leveraging
Fieldglass, a leading vendor management technology system for contingent labor procurement.
SourceRight delivered a scalable outsourcing model that includes flexible configuration options, global program management oversight, optimized supplier management, and decision support analytics. Siemens will also benefit from SupplierEdge, which streamlines order processing and supplier management to ensure a measurable ROI, access to high-performing preferred suppliers, performance quality, and compliance with supplier diversity programs.
With one comprehensive technology platform, compared to seven or eight previously, efficiency and ease of use have skyrocketed. SourceRight also provides data and trend analysis to help Siemens develop better-informed strategies. Another success is SourceRight’s ability to provide proven, high-performing staffing suppliers, even in remote locations.
A Q&A WITH SIEMENS:
Doug Cutrell and Mary Hassler of Siemens discuss the implementation of the first-of-its-kind managed service program (MSP) to meet the needs of a growing and complex contingent workforce.
WHAT WERE YOUR MAJOR CONTINGENT LABOR CHALLENGES AND WHAT WERE YOU HOPING TO ACHIEVE?
Cutrell: Our contingent workforce is large and growing, and the procurement process is complex. Our goal was to have a single point of contact, a single platform, and a single supplier. We wanted to streamline the process and make it more efficient, cost-effective,and transparent. We also wanted to have a strong and consistent compliance program.