Consider the Source

Reinventing Procurement as a “Go-To” Organization

By Michael Kushner, Director, CFO Services, TPI

No other department has as much reach both internally and externally as procurement. It supports every department and employee in the company, commits significant financial obligations on behalf of the company and has the ability to view and manage consumption. And yet, in most companies, procurement is not seen as the “go-to” department. A variety of challenges can dull its reputation, but it is possible to turn these negative perceptions on their head.

Here are the Top 5 essentials to make procurement a “go-to” group:

1. Find a strong leader. An effective procurement leader is NOT a procurement person – s/he is a sales and business leader who focuses on business objectives, leveraging procurement skills as a means to support them. An effective leader will build buy-in from the business, demonstrate a “service” mentality to foster a culture that enables the business units, and will develop people even as roles change.
   
   
2. Create a meaningful set of goals. A vibrant procurement organization will know what the department stands for, what it is trying to accomplish, and what to communicate to the business units and service providers. While the group’s objectives will include cost reduction and savings reported, more importantly, the goals need to align with the company’s larger imperatives and demonstrate how procurement enables the business units to deliver on the company’s mission.
   
   
3. Establish C-suite support. Procurement needs a consistent executive message that declares its significance to the business imperatives. Executive-level support provides a credible platform for procurement to demonstrate its value and build buy-in from the business. To maximize results for the enterprise, business unit executives should invite procurement to business unit meetings and department planning sessions.
   
   
4. Motivate individuals. Empower members of the procurement team to be in charge of their decisions and their relationships, and the business units will want to work with them. Well-developed roles and activities will give the team members a sense of ownership of their actions and the outcomes they generate. Align goals for individual employees with the procurement group’s goals to drive the appropriate team actions. 
   
   
5. Build a good reputation. Procurement needs to execute consistently and market itself, reaching out to the business units and sharing success stories. Let people know you are the group to call when they need to get something done, and the team will become recognized as a partner for the business units. Once a good reputation begins to take hold, it will snowball, driving more procurement demand from the business and more interest from people who want to be a part of the team.

For procurement groups that can reinvent themselves, a domino effect brings other positive changes. Attrition will increase as other parts of the company look to hire people from the team. Demand to get into procurement will increase as colleagues realize its broad reach and influence. And business unit demand will increase, driving the need to assess procurement’s growth and focus.

For more information about how to turn your procurement department into a “go-to” group, contact Michael Kushner, Director, CFO Services, TPI at michael.kushner@tpi.net or +1 435 327 2349.

Managing Your Service Desk for Quality and Efficiency

By Chris Pfauser, Principal Consultant, Compass; and James Kane, Director & Associate Partner, TPI


Editors note: Last month the parent company of TPI, Information Services Group Inc., acquired Compass, the premier independent global provider of business and information technology benchmarking, performance improvement, data and analytics services. This TPI Top 5 was co-authored by one of our Compass colleagues.

IT Service Desk management practices are evolving in response to a variety of technology innovations and new business requirements. As quality service at low cost becomes increasingly commonplace, top-performing organizations are seeking new and innovative ways to gain a competitive edge.

Here are the TPI Top 5 keys to optimizing Service Desk efficiency and value contribution:

1. Don’t just resolve incidents; manage problems. Analyze incidents and problems to identify root causes. Use this knowledge to take corrective action and drive improvement. Don’t fall into the trap of efficiently managing incidents; rather, seek to eliminate them at their source. Move beyond basic measures of incident resolution and link performance metrics to broader objectives. Clients increasingly favor a pricing mechanism where the focus shifts from quantity to quality. Be sure to integrate Service Desk measures with other parts of the IT organization and business to enable problem analysis and resolution. Use benchmarking to address three questions: What? So what? Do what?

2.  Manage contact volume. Use self-help and automation tools to reduce contact volumes and ensure that incidents are either resolved without any direct agent contact or sent to appropriate channels.  Invest in training and knowledge management databases and aim for first-contact resolution rates of 80 percent to 90 percent. For contacts involving agents, don’t just measure cost per contact; also analyze cost per resolution to assess the impact of activities outside of the Service Desk. Strike a balance between self-help tools and automation on the one hand, and the user experience on the other. Alternative contact methods, such as click to chat and video (Skype^TM) are rated highly in user experience and allow agents to manage multiple discussions in real time while leveraging contemporary social media interactions.

3. Train to retain. Use incentives and bonuses to promote “positive” turnover that moves agents up and out of the Service Desk and places them elsewhere in the organization. Avoid “negative turnover” – terminations, resignations, and poaching by other businesses. Use cross-training and “walk-a-mile” programs to build awareness of the Service Desk’s contribution. Invest in the development of industry vertical knowledge in your Service Desk staff.

4.  Get the right staffing mix. Employ a mix of veterans and new recruits. Focus on the staffing life cycle and establish strong relationships with local universities to develop a recruiting pipeline of talent. Seek staff that not only are not only highly competent in technology but can build relationships, manage conflict and develop, contribute to high client satisfaction and seek to drive continuous improvement.  Design training programs to advance people within the organization, while maintaining a supply of qualified new trainees. Incentive programs should reward both individual and team performance and involve some level of competition.

5. Strive for a balanced sourcing strategy. Seek a balance between in-house and outsourced functionality; one that achieves cost efficiency with the highest service quality. Segment contacts and direct them to appropriate channels. Route standard and simple tasks to self-help options and automated tools. Send basic inquiries to junior staff and offshore centers to further leverage cost efficiency. Complex problems and inquiries from high-value users should go directly to experienced agents and specialists. Develop consistent criteria and tightly coupled procedures with the “feet on the street” organization when a dispatch of service is required.

The experts at TPI and Compass can help you meet your service desk challenges through industry experience and specialized knowledge of your industry. Contact Chris Pfauser, Compass, or James Kane, TPI, for more information.

Five Easy Steps to More Effective Contact Center Performance Measures

By John Magliocca, Senior Advisor, TPI

“You can improve what you can measure” is an adage many contact center managers strive to realize. But while data collection and reporting systems are critical contact center tools, access to statistics alone will not ensure success in improving performance. Improper communication, unnecessary complications and inconsistent application of performance measures often cause the best contact centers to underachieve and cause key programs to fail.

How do you acquire the biggest bang through measuring performance? Here are the TPI Top 5 steps that can boost your chances of operational improvement:

1. Plan your direction carefully. Determine which key measure(s) is/are most critical to the success of the operation and develop the plan for improvement around that measure.

2. Limit key measures to a core four or five. Do not be trapped into developing multiple simultaneous improvement plans.

3. Ensure that all goals are achievable. In an attempt to improve numbers rapidly, do not be fooled into thinking a lofty, unachievable goal will provide sufficient incentive for an agent to stretch performance that much further.

4. Avoid metrics that send conflicting messages to the staff. Key performance indicators and metrics that are contradictory in nature can lead you down a path to failure.

5. Carefully explain the objectives to all members of the contact center team. Every member of the team must clearly understand your objectives and work together to achieve the primary target.

Read John's entire TPI Top 5 here . . .

Following these tips may not ensure performance improvement, but it can certainly improve your chances of success. TPI can help you to compare your contact center technology to best-practice enterprises and identify key technologies and how best to apply them.

E-mail John Magliocca, Senior Advisor, TPI, or phone him at +1 412 527 8964 to learn more.

Top 5 Staffing Considerations for Building a Procurement Team

By Bill Huber, Director ─ CPO Services, TPI

The most effective procurement organizations are able to attract, stimulate and retain top talent; and retain the energy and momentum to continuously drive change to their companies. Less effective organizations can succumb to bureaucracy, marginalization and the loss of talent.

How your procurement organization approaches staffing can make all the difference. Here is an overview of the
TPI Top 5 considerations for building and staffing your procurement team:

1. Focus on the 21st Century procurement leader. The traditional procurement focus on cost savings, negotiations and contract terms are all critical, but they have become non-differentiating table stakes for procurement leaders. 

2. Don’t overstaff. Every procurement organization is resource constrained and has more work than it can possibly complete. However the strategy of bulking up with bodies results in more overhead and the perception of an organization peppered with administrators, compliance cops and transactional buyers, all of whom will be accused of slowing down business. Find ways to make other organizations accountable for lower value activities, and reposition a smaller procurement staff as managers of spending strategy, governance and relationship performance. 

3. Build in flexibility. Create an environment that will ensure that the procurement staff is able to move across commodities and business areas. This means cross-training and balancing subject matter depth with adaptability and flexibility. 

4. Manage customer intimacy. To the extent possible, co-locate your key personnel with their most important internal clients. Your clients should see procurement leaders as members of their teams. Build formal partnership agreements with key clients, and involve them in the evaluation process of your leaders. 

5. Compensate well. A smaller team is easier to make a well-compensated team. If the core procurement organization is able to focus on the activities that will bring the largest bottom-line impact to the organization, and if budget is freed up through the strategies identified in consideration #2, it will be easier to attract top talent. 

Read Bill's entire TPI Top 5 here . . .

TPI’s seasoned sourcing experts can help you achieve your global sourcing goals through objective advice, robust market data, knowledge of your industry and extensive experience with sourcing negotiations.
 
E-mail Bill Huber, Director ─ CPO Services, TPI, or phone him at +1 704 806 3910 to learn more.

Actions to Take When Developing a Service Strategy

By: Mark Lockard, Director, TPI


Nobody develops a service strategy with intentions of failing. However, if everybody’s service strategy were a success, we would all be gaining market share and achieving top quartile performance! While we know that is not the case, we frequently don’t understand the root causes when our realities deviate significantly from our plans.

Consider these TPI Top 5 tips for developing a service strategy that has a high chance of success:

1. Know what is important to your internal customers. Never assume that you know what matters to your customers. The marketplace is constantly changing. Review your last customer satisfaction survey with your customers to ensure you are measuring what matters most to them now, and also make sure you focus a portion of the agenda on their future needs.
2. Have an objective view of your current capabilities. Isn’t it a bit peculiar that when most of our staff is asked about their capabilities, they are top quartile or best in class? It’s a quirk of human nature to be optimistic; great accomplishments rise to the surface while mediocre performance remains unexamined. Understand how you really stack up to an external view and whether you are providing the right services. Compare your service levels and costs to the broader marketplace, not just a comfortable niche.
3. Understand your total cost of ownership. While gaining that objective view of your capabilities, make sure you understand your total cost of services. In most companies, budgets mask costs. Employee-related costs are usually clear; however, the costs for technology, facilities, recruiting and other services usually reside in the budgets of other corporate functions.
4. Have an objective view of the benefits and the risks of the proposed service strategy. The benefits of the proposed strategy are often compelling. It’s easy to get caught up in the initial excitement. But have your risks been adequately identified? Do you know how likely those risks are to occur? And if they do, how much damage might result? Know what your risks are and create plans to mitigate your risks.
5. Socialize your service strategy and the roadmap for change. Strategies that have not been shared and vetted with all of the affected stakeholders aren’t ready for implementation. Be sure your roadmap clearly describes how you’ll get from point A to point B. Gaining buy-in to your service strategy is critical to success and can be the hardest part of the process.

TPI’s experts can help you achieve an objective assessment of your current service strategy. We provide objective, risk-balanced, and forward-oriented strategies for establishing shared services and/or outsourcing delivery relationships. Contact Mark Lockard, Director, TPI, to learn more.

Investing in Future Talent

By: Hary Bottka, Project Director, CHRO Services

I recently had an opportunity to blog for Pinstripe, in which I discuss why forward thinking organizations are using the economy to invest in their future talent pool.  I was taken aback by some statistics that I heard at a recent Roadshow by Taleo which supports my point:  42% of employed workers are disengaged from their jobs.  The reality is these statistics underscore the need for the RPO industry to prepare for the future.

Stay tuned for more insights on the latest RPO and HRO market issues as our HRO Group will be making more appearances on Pinstripe. 

Interviewing New Service Provider Relationship Manager – Ask the Tough Questions!

By: Cynthia Batty, Global Competency Lead, Service Management, TPI

You are in the second year of a service provider relationship, and your first relationship manager is ready to roll off to a new assignment. Your service provider has offered two candidates to interview – what should you ask them?

You’ll want to know how they perceive the service provider’s role: you need someone who is experienced and smart, with the wits and wisdom to discern when things need to be changed or improved. You want someone with the guts to stand up for what is right – no matter which side that might be. You need dedication to governance ideals, to innovation, to a good and peaceful relationship, and to working together with each player in the environment. Here is a list of questions you might consider asking your two candidates, by category.

Experience

• What is your experience in managing other relationships? What were the areas you found most challenging to the relationship?
• If you could change one thing about your last engagement, what would it be and why?
• Have you found situations where you would have recommended the client organize themselves differently than they were? What was the situation and how would you have changed it?

Governance

• What kinds of governance meetings do you think are important in a services relationship? How do you see the service provider’s role in the governance meetings?
• How would you help your client ensure that the services remain aligned to the business needs?
• Do you think that the contract must be amended from time to time to keep the relationship in synch, or should the contract be a static document?

Services

• What do you think makes for the best service delivery structure in a services relationship?
• How important do you think service levels are in a relationship? The statement of work?

Relationship

• What are the things you think make for a successful services relationship?
• How do you approach problems in the relationship?
• What are the things you think are most damaging to a services relationship, and how do you work to ensure that these challenges are addressed?
• How do you approach the paradox that it is your job to deliver services to the contract and budget, while the client is motivated to get whatever they need to manage their business requirements?

Innovation

• What do you think your role is in ensuring that innovation is encouraged and developed in the services relationship?

Integration

• What is your perspective on working with other service providers in the environment? What is the best way to work together effectively?
• How do you plan to work with the client’s retained IT organization?

Business Process

• What are the strong points of your company’s approach to business process with clients? What would you change if you could?

When you know each candidates position on these areas, you will be in a good position to make a truly informed and three-dimensional decision about who is right for you – and if neither candidate meets your criteria, ask for another one.

Top 5 Actions to Heighten the Strategic Impact of Your Procurement Organization

By Bill Huber, Director, CPO Services, TPI

During tough economic times, procurement is often called upon to “win” price and payment term concessions from suppliers and service providers in order to boost the bottom line. While there is no question that part of procurement’s role is to ensure that a company is paying the best price, the “blunt instrument” approach tends to simply focus on supplier profit margins without doing anything to improve quality or drive innovation that ultimately, permanently removes real costs from the supply chain. 

                                                                                              

Here are five actions that you can take to raise the strategic impact of your procurement organization.

1. Define the target role for your procurement organization. Review your department objectives and formalize the role and results that you would like procurement to achieve for your company during tough economic times. Set strategic objectives in terms of innovation, quality, cost savings and customer service that the procurement organization will embrace as a response to recessionary times, and measure your progress toward those goals.

2. Segment your supply base. A formal tiering of your supply base, with best-practice supplier management processes for the top tier, can have a dramatic effect on the value that you derive from your most important suppliers. Set frequencies for reporting, monitoring, collaboration and financial reviews with each, and require that your most strategic suppliers bring a certain number of innovation suggestions to the table each period. Set a formal process whereby these suggestions will be vetted, with the best ideas submitted for review by an executive-level procurement governance team.

3. Realign your resources. Identify underutilized or misaligned resources, and shift roles to focus talent on your greatest areas of opportunity. Often individuals who have been focused on a particular commodity because of their expertise could bring a fresh perspective to other categories. People who make the greatest impact in their current areas can have an even greater effect on an entirely different category.   

4. Review processes and technology to identify roadblocks and underutilized capabilities. Processes can be slower and more cumbersome than they need to be. Stay on the lookout for procurement processes that were designed to address a past problem that is no longer relevant today. Also, organizations often have only partially deployed procurement technology solutions for lack of resources to support a more ambitious rollout. A second look can reveal underutilized technology that could be leveraged with a different support model to drive faster cost savings or improve visibility or user satisfaction.

5. Evaluate governance structures, and change if necessary. Good procurement governance should enable transparency and balanced decision making. In order for it to be effective, procurement governance must be designed to ensure that important decisions are made at the right level to balance risks with rewards, and to ensure a timely flow of information to the right levels of the organization.  

Implementation of these five actions could ultimately improve the effectiveness of your procurement organization by 3 to 5 percent or more, increasing your impact on the bottom line and transforming the role that procurement plays within your company.

TPI’s CPO Services experts can collaborate with you to assess your current procurement processes, then help you identify and implement strategies to improve quality, drive innovation and permanently remove real costs from the supply chain.

Contact us today to begin the dialogue.

Getting a Handle on Total Absence Management

By Felicia Palmer, Director, HRO Services, TPI

Did you catch the tidbit about a new leave bill proposed on Capitol Hill?

In case it escaped your notice, it essentially builds on the Family Medical Leave Act and offers the same 12-week leave on a “paid” basis. Yes, “paid”. It strikes me that the number of births, adoptions and ill parents to care for is going to skyrocket – once foregone compensation is no longer a factor in an employee’s decision. Note that this legislation was proposed in 2008 and is being re-proposed in the new session of Congress. Technically speaking, it is bill 1723, the “Family Leave Insurance Act of 2009”.

For HR professionals trying to get a handle on absence management, this is just one more dynamic – albeit dramatic – one to consider when grappling with managing absence. The topic of Total Absence Management (TAM) is getting more attention as employers come to realize there is an opportunity to influence the quality and cost of this HR function.

So, some of the key issues facing companies with respect to leave administration include:

• Decentralized management, which results in inconsistent application of policies
• HRIS systems don’t generally provide effective functionality to support comprehensive intake and management of leaves
• Employers without adequate tools to manage absence are likely less restrictive in granting leave, thereby increasing loss of productivity unnecessarily
• These factors, in combination, increase the risk of noncompliance with regulations governing leaves

And the financial aspect is intriguing, if not compelling – per Mercer Consulting, the direct and indirect costs of absence - including overtime, lost productivity, overstaffing and hiring/training of replacements - can exceed 14% of payroll.

So, as an unscientific sample, where is your dial as it relates to TAM? Is it an area of concern where you see a need to tighten and/or improve the process? Is it on the radar at all?