Six steps to a winning business case for contingent workforce technology
In 2023, Ardent Partners and Future of Work Exchange reported that “49% of the average company’s total workforce is comprised of external, extended talent.” This non-employee workforce, which has grown more than 20% in the last five years, includes temporary staff, independent contractors, consultants, and workers providing a variety of statement of work (SOW)-based outsourced services. To source and manage this growing external workforce, companies have implemented a range of technologies led, according to Staffing Industry Analysts (SIA), by vendor management systems (VMS). According to SIA, 79% of businesses worldwide with more than 1,000 employees use a VMS, and a further 20% report that they are likely to consider a VMS in the next two years.
If your company is still using manual processes or outdated contingent workforce management (CWM) automation tools, the time to begin building a business case for a VMS or other contingent workforce technology is now. The task can seem almost overwhelming, but it doesn’t have to be. These simple but thorough instructions for building a successful business case will help you: • Ask the right questions • Supply the right answers • Identify risks, rewards, and ROI projections •A ssemble and organize all the elements you will need to win approval to implement the latest contingent workforce management technology
49%
of the average company’s total workforce is comprised of external, extended talent
79%
of businesses worldwide with more than 1,000 employees use a VMS
Six steps to a winning business case 1
Assess your current state
2
Engage stakeholders
3
Prioritize goals and objectives
4
Define requirements
5
Evaluate and select a trusted partner
6
Build and communicate your case
Six steps to a winning business case for contingent workforce technology
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1
Assess your current state
If you don’t know where you are, it’s hard to get where you want to go. The critical first step toward a winning business case is to develop the best possible understanding of your current contingent workforce management processes. This requires gaining visibility into objective data, including headcount, current spend, business rules and processes, and subjective information, such as known inefficiencies, rogue spending, and other pain points. Many organizations find this difficult. As one Beeline client noted, “ Our biggest challenge was understanding our current state well enough to be able to determine the solution to meet our enterprise requirements. With many different business groups across a couple of countries and including several [labor] categories, it was a struggle to gather all the information.”
Tap stakeholders for information
Supply chain inputs
Designate contacts from key functional areas (human resources, procurement, sourcing, IT, hiring managers, finance, legal, security) across all business units and geographies. Each of these functions has a stake in the outcome, so these contacts should provide you with the data and insight you need from an internal perspective.
As well as probing your internal sources to understand your current state, it is also important to solicit input from your labor supply chain. Your partners and suppliers should be able to provide relevant information, including: • Headcount • Turnover • Skill sets • Classification mix • Cost structures • Financial metrics • Invoicing methodology
You will need to know: • Current contingent workforce spend • Number and types of workers • Applicable company policies • Sourcing/supplier strategy These factors should be itemized by: • Labor category • Geographic region • Business unit • Trends over time Your analysis should also include any known issues, such as: • Compliance concerns • Security problems •P rocess gaps, redundancies, or incompatibilities
Identify pain points As you collect objective data about current methodology from your stakeholders, also solicit their opinions about what causes them pain. It’s not enough to understand how your processes currently work. It is important to know what doesn’t work, and why. A thorough discovery process that incorporates the individual concerns of all functional areas will not only help you set the priorities for your VMS, it will also help you recruit supporters for your business case among stakeholders throughout your organization.
Six steps to a winning business case for contingent workforce technology
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2
Engage stakeholders
As you discuss your current state with internal and external stakeholders, you can begin taking steps towards your future state. Before evaluating potential technology providers, it is essential to engage internal partners who can help define the projected scope of the program and ultimately drive its adoption.
Identify key stakeholders
The role of the executive sponsor
All organizations are structured differently, but there are some universal truths when it comes to choosing the right stakeholders. According to Staffing Industry Analysts, engaging functional leaders from procurement, sourcing, human resources, and operations is most critical. Their buy-in is the preeminent driver of the success for any non-employee workforce program.
Executives and senior leaders provide the authority and credibility needed for a significant organizational change to be successful. Because the change involves new processes, new systems, and possibly new organizational structures, senior leaders must demonstrate their personal commitment as well as the organization’s commitment to the change.
Therefore, stakeholders from these departments must be engaged from the start and should provide their insight into your technology. If you have involved them in the fact-finding process to define your organization’s current state, they should be well prepared to provide recommendations that will help define your contingent workforce program’s tech and automation goals, and objectives.
To implement contingent workforce management technology in your organization, your executive sponsor should be a key stakeholder in the system’s success—probably a senior executive in the company’s procurement, sourcing, or human resources department.
Show benefits to other stakeholders Other internal groups that should provide facts, opinions, and guidance are finance, IT, security, and legal. These departments will be directly impacted by a technology implementation and can help define what needs to be improved and any potential risks. They are also more likely to support the program and the adoption of new technology if they understand how a VMS or other software solution will help them. In addition, finance can play a crucial role in your business case development by helping to estimate investment risks and benefits and recommend ROI methodology. Remember, there are no facts in the future, only estimates.
The sponsor must be in the right position to authorize resources and provide guidelines needed to shape decision-making at all levels. The sponsor must also be able to rally the organization’s senior leadership in support of the initiative. If the organization’s executive stakeholders don’t visibly promote and support the technology, it is highly unlikely that those beneath them will do so. If that happens, the program will never be able to deliver its full value to the business. Therefore, it is critically important to choose the right executive sponsor (or sponsors) and to provide them with the data garnered from stakeholders throughout the organization. This way, they can apprise other executives of the benefits of implementing a contingent workforce management solution.
Six steps to a winning business case for contingent workforce technology
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3
Prioritize goals and objectives
Contingent and project-based labor usage is accelerating due to a variety of factors including economic uncertainty, skill shortages, and the popularity of flexible work schedules. With this increase, it is imperative that businesses maximize their vision for the performance and management of this segment of their workforce. Better visibility and management capabilities are not the only benefits advanced technology can provide.
Advanced technology also can:
Ranking program objectives
Reduce costs through the elimination of rogue spending
With all that state-of-the-art contingent workforce technology can do for your company, how can you set priorities? The answer is to start with the five primary reasons companies choose to implement this technology:
itigate compliance risk through M better categorization of workers Improve business intelligence through analytics and forecasting rovide real-time cost benchmarks P across skill sets and geographies I mprove the quality of contractors and staffing suppliers ptimize strategic workforce O planning by interfacing with existing IT infrastructure Consolidate billing and improve invoice accuracy
•P rovide better contingent workforce visibility •C ontrol costs • I mprove efficiency •E nhance quality •E nsure compliance All these are essential to your organization, but it is vital to determine which of these factors are most critical to your ability to achieve your business goals. When you have set your priorities, it will be much easier for you to work with potential technology partners to tailor the system that will best meet your needs.
Six steps to a winning business case for contingent workforce technology
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4
Define requirements
Before building a house, the owner, architect, and builder must agree on all the essential elements the house will contain. This blueprint will serve as a guide throughout the building process. It may be modified as construction proceeds, but the more complete and accurate the blueprint is, the better chance you have of achieving your goals on time and within budget. It is the same way with contingent workforce management technology. The better you can define your requirements according to your business priorities—separating “must-have” from “nice-to-have” capabilities—the more likely you will get the technology solution your organization needs.
Six steps to a winning business case for contingent workforce technology
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5
Evaluate and select a trusted partner
Armed with a thorough understanding of your current state and a vision for your ultimate objective, you should be ready to evaluate and select a potential technology partner. Whether you engage potential partners via an RFP, face-to-face meetings, or through recommendations from suppliers, the right partner is the one that can help you bridge the gaps from your current situation to the desired future state in terms of both process and quality.
There are many contingent workforce technology providers in the market today, ranging from well-established companies to recent start-ups. Because this technology represents a substantial long-term commitment for your company, you will want to choose wisely. Important considerations include:
1. Partnership commitment It is critical to find a firm willing to invest in a long-term relationship with your company and nimble enough to work through any organizational changes over time. As reported by client references, look for a company that involves its clients in its new product development process.
4. Visibility, analysis, and decision support Robust reporting and analytics capabilities are critical to maximizing the value of your investment. Ensure your technology partner can deliver data-driven insights to support your current and future business intelligence requirements.
2. Innovation
5. Ease of use
Your technology partner should have a track record for understanding and anticipating market trends, including new sourcing channels and the use of ethical AI.
The technology should be intuitive enough so that users can learn about 90 percent of the functionality on their own. Professional training, online help, online tutorials, and 24/7/365 help desk assistance should be available to supply the remaining 10 percent.
3. Geographical reach Select a provider who understands and can accommodate the local regulatory, tax, and labor laws in all geographies where you do or intend to do business.
6. Data security and process compliance Any firm you’re considering should undergo rigorous independent security audits and examinations and be certified to SSAE 18 and ISAE 3402 standards.
Six steps to a winning business case for contingent workforce technology
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6
Build and communicate your case
Building a business case shouldn’t be intimidating. While your organization may have some specific content and formatting requirements, in essence, your business case should: •D escribe the problem •P ropose the solution—with detailed deliverables and implementation plans •E stimate the risks and costs •S how how the benefits will recover the investment (ROI) in direct financial terms and in more abstract but still measurable improvements such as improved KPIs. For more information about ROI, see Forrester Consulting’s study, titled “The Total Economic Impact Of Beeline Extended Workforce Platform.”
As you construct your business case, you should consider the opportunity cost—and organizational risk—of NOT implementing the latest contingent workforce management technology. For example, according to an Ardent Partners research study, 88% of best-inclass contingent workforce management programs currently utilize a VMS, and top-performing organizations are 38% more likely than all others to leverage VMS technology. As companies worldwide accelerate the rate of contingent workforce technology adoption, both to enhance and protect their competitive positions, you will want to embrace the powerful benefits the latest CWM automation technology can offer your company and not cede those advantages to your competitors.
88%
of best-in-class contingent workforce management programs currently utilize a VMS
38%
top-performing organizations are more likely than all others to leverage VMS technology
The importance of communications Even after you have chosen your technology partner, signed your contracts, and undergone implementation discussions, cultivating a business case continues. You must continue to sell the program to your stakeholders and end-users to ensure that you get maximum value from your investment. Communications with end-users should be direct and target specific audiences to delineate how the new program will impact them specifically. But don’t just focus on the day-to-day changes. Instead, in each communication, paint a clear picture of how individuals and the organization will benefit from buying into the program. Effective communication also means engaging end-users via various tools and forums that provide one-way and two-way communications—emails and e-newsletters, flyers, satisfaction surveys, intranet blogs, town hall meetings, etc. Your technology partner can help you craft these communications. Still, ultimately, it is your responsibility to ensure these messages resonate with your end-users and inspire confidence in the program and technology. If you have secured executivelevel buy-in early in the process, you will have increased your chances of success since having a C-level champion will help others see the value and importance of the program.
Six steps to a winning business case for contingent workforce technology
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When is the right time to start building your business case? Right Now. When it comes to managing your contingent workforce, adopting an effective VMS is no longer a luxury—it is a business imperative. With nine out of ten companies expected to explore or adopt a VMS within the next two years, now is the time to prepare a business case that resonates with your company and prepares you to select the right VMS partner to meet your needs.
Let Beeline help you build your business case For over 20 years, Beeline has empowered businesses worldwide to achieve competitive advantages with their extended workforce. Beeline’s contingent workforce management solutions give companies the visibility to mitigate risks, achieve cost savings, and meet dynamic business needs. With tailored solutions that solely focus on the complexities of the extended workforce, clients leverage Beeline products that fit their unique requirements. Through thousands of integrations, clients can connect their extended workforce data from all technology stacks, including major procurement and HR systems. Join the list of renowned brands benefiting from Beeline’s deeply seasoned experts, collaborative innovation, and industryleading partner network.
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