How to bring visibility and control to $1billion of SOW spend

Practical advice on combining curiosity, technology, the right stakeholders and a good MSP in driving successful SOW management programs.

With Michael Matherly, Global Head of SOW Strategy, eTeam

00;00;55;07 - Experiences bringing visibility and control to $1billion of SOW spend

00;09;40;23 - Contractors and vendors converging in SOW

00;19;51;18 - Staffing businesses talking about SOW

00;25;14;15 - Understanding SOW management services vs staffing

00;35;00;26 - Best of breed vs suites for internal procurement

00;46;01;23 - Addressing the issues in adopting SOW

01;06;20;23 - Pushing on the case for change

Episode Highlights

Transcript

Auto-generated. Please excuse any minor errors.

00;00;01;00 - 00;00;08;03

Jonny Dunning

Right. Well, let's get started. I'm very pleased to welcome Michael Matherly to the podcast today. Michael, how you doing?

00;00;08;05 - 00;00;11;04

Michael Matherly

I'm doing great, Jonny, Great to finally talk to you.

00;00;11;06 - 00;00;30;16

Jonny Dunning

Brilliant stuff. So I really appreciate you taking the time to join me. I'm super excited about all the statement of work service and stuff we got to talk about today because you and I really love this topic. We both we both our ability to talk about it by doing the hard yards I really think is going to be some great points are going to cover today.

00;00;30;19 - 00;00;40;12

Jonny Dunning

But I would introduce you as a statement work expert because you've got some amazing experience in this area. But firstly, thank you so much for joining me.

00;00;40;15 - 00;00;53;23

Michael Matherly

Yeah, thank you for having me. I I've loved our conversations over the years and this has always been a dream of mine to do this. And when I saw John Bolton was on your podcast, I said, I can't let him outdo me. So I got to get on there somehow.

00;00;53;26 - 00;01;14;17

Jonny Dunning

Good stuff. Excellent. So before we dive into the topic areas we're going to cover, which is really around where start fits into that kind of extended workforce technology stock. And would you just be able to give a bit of a background summary on your wealth of experience and particularly targeting this area?

00;01;14;20 - 00;01;51;10

Michael Matherly

Sure. Absolutely. So I started off at Capital One in their I.T. department in managing their finance group, and this was back when they were in hypergrowth mode. And I'm going to date myself by telling you that that was in the nineties. But as the finance manager in a large I.T. organization, I was handling all of the consulting invoices and budget and it didn't take me long to realize that they were an awful shape and there was no rhyme or reason to why we were being charged some rates.

00;01;51;10 - 00;02;20;21

Michael Matherly

And it was an awful lot of money. And so I opened up a conversation with our with our supply chain team, which is what they used to call them back then. And really started giving them feedback. And the, you know, after a while, you know, that the head of supply chain basically told me to either shut the bleep up and let us do our best or come over here and see if you can do any better.

00;02;20;21 - 00;02;57;00

Michael Matherly

So that's how I got into procurement. So I did. I took the opportunity to to join the procurement team and really focused on the consulting services spend. It wasn't a defined category at the time, obviously. So for three years, beating my head up against the wall, working with existing systems, working with the lack of visibility and the lack of control and starting to figure things out and brought consulting spend as well as the rest of professional services under management, which was about $1,000,000,000 annually at the time.

00;02;57;02 - 00;03;26;25

Michael Matherly

And during my tenure there, we we absolutely did the segmentation, we went to the strategic sourcing, we developed you all sorts of vendor performance category strategies and so forth, but also participated in building the one of the industry's first SOW workflow engines and the PeopleSoft platform. And it wasn't quite good enough to put on the manager's desktop to be self-service.

00;03;26;27 - 00;03;51;00

Michael Matherly

So it was just me and my team that were using it to manage. But we had, you know, Jonny we had close to 500, 600 SOWs per year that that led into that roughly a billion. And just the transactional, logistical operational aspects of it were, were crushing. And we needed a technology platform to, you know, and it's no joke.

00;03;51;01 - 00;04;20;04

Michael Matherly

I mean, I've been on that side that I, that I sell now to customers and prospects. You really need that control and visibility. So it took us a while, but we got it. And then we we really started to make some serious inroads into spending money wisely and, you know, saving was important, but it wasn't the most important thing for a hyper growth credit card company that was couldn't spend money and make money fast enough.

00;04;20;11 - 00;04;53;17

Michael Matherly

So they you know, we we were really focused on just, you know, ending the chaos and getting control of the process and and kind of doing the right thing with regards to managing our our suppliers and our spend. In addition to that, I also spun off a handful of contingent labor categories, which was part of the strategy shifting away from professional services where we were on SOW, where we were paying consulting firms, very high rates uncontrolled.

00;04;53;19 - 00;05;34;10

Michael Matherly

We we established several categories as offshoots to that as staff augmentation, and that was part of the results that we achieved. And it would make sense once you had the visibility and you saw that you were paying PWC and KPMG and other large audits and consultancies to do internal audit work, it only made sense for us to create an internal audit category in negotiated staff org like rates as opposed to the rates that those big boys charge when when their audit advice is on the line.

00;05;34;12 - 00;06;09;06

Michael Matherly

So it's just one example of how we leverage the control and visibility into the spend after that. The last initiative I had, a Capital one was to support our CFO and our CPO in a organizational change, which included a procurement transformation. So we brought in McKinsey to do the organizational change, but we chose at Kearney to do the the procurement transformation.

00;06;09;08 - 00;06;36;13

Michael Matherly

And lo and behold, one of the targets that AT Kearney took in the their assessment was my role because I was the originating category guy. So I wore the contracts hat, the sourcing hat, the vendor performance hat, the category strategist's hat, and rightfully so. They recognized that that wasn't a sustainable practice. And they they you know, they made me the offer to wear one hat or take a package.

00;06;36;13 - 00;07;06;02

Michael Matherly

So I took a package and started my own business called Sourcing for Services that was effectively taking what we were able to do with Capital One, with an internally managed MSP and create a private label offering that several MSPs in the US partnered with us ultimately to support their accounts on the SOW side. So that's kind of how I got into it.

00;07;06;05 - 00;07;31;20

Michael Matherly

We were supporting the Oracle account with GRI, our partners there managing all their IT. SOWs and we we recognized that a lot of them coming in were at risk for independent contractor status. So that's where I made the connection that, hey, we've been managing. IC SOWs along with Corp to Corp, SOWs all along, but we haven't, hadn't been screening them.

00;07;31;26 - 00;07;59;29

Michael Matherly

So we incorporated that into the solution. We, you know, Oracle stakeholders were gracious enough to grant us the opportunity to bid to be their AOR. So that followed a recommendation that they needed to do that. But we didn't win because we were pretty much a SOW focused shop and we didn't have the IC compliance expertise that was necessary, but that did springboard myself and my business partner to develop that capability.

00;08;00;03 - 00;08;41;03

Michael Matherly

So an offshoot of sourcing for services was IC Pre-Check, where we did set ourselves up as a agent of record that really did focus on US based screenings and everything. Since then, you know, we sold our company in 2020 and dissolved the partnership and I worked for an MSP and FMS, and now I worked at eTeam building their SOW capabilities, which very intentionally is spanning across IC and Corp to Corp, so very much doing their global AOR business and their global SOW business.

00;08;41;03 - 00;08;48;17

Michael Matherly

So I think that's enough of an introduction, but certainly happy to field any questions about that that you might have.

00;08;48;20 - 00;09;15;22

Jonny Dunning

Yeah, I mean, there's some great stuff in there. I remember I think we first met when you were doing some some work consulting and to spend matters. Yeah, looking at technology across the market. And that's one of the things that I find really intriguing about this conversation, because your subject matter expertise is so deep in this area of services, services, procurement, but it's also across that kind of FMS direct sourcing, vendor management systems, you know, gig economy marketplaces, all that sort of stuff.

00;09;15;22 - 00;09;25;07

Jonny Dunning

You you had so much exposure to the various platforms that have kind of come and gone on a growing now. But you've got a good context of see the wider view.

00;09;25;10 - 00;09;53;02

Michael Matherly

Yeah, absolutely. I mean, I love that period of my career and I'm very thankful to Jason Bush and Andrew Karpie for allowing me to participate with them in doing that, because it gave me a great exposure to the different technologies that were out there. What can happen sometimes is when you get into service delivery, you get focused on the one platform that you're using and that becomes everything because that's a decision that was made.

00;09;53;05 - 00;10;36;19

Michael Matherly

And the reality was there was there was a plethora of of other providers out there that we that I wanted more information on. So, you know, I was very thankful that Andrew and Jason sort of allowed me to participate with them and take the lead on the SOW side of it. And you're right, Jonny, That's where I was exposed to the FMC, which is, you know, your predecessor company and system exploring all the different F messes out there and the VMs I helped with the for extended workforce capabilities, but obviously I took the lead on the SOW side and really got a view of where the different platforms were coming from and as you and

00;10;36;19 - 00;11;16;12

Michael Matherly

I have talked before, you know, FMS freelance management systems originated with one goal in mind, whereas the VMSs kind of originated with a different goal in mind. And they but we find them even today converging on the same spot. They're just coming at it from different directions. And, and I think that's one of the the things to be on the lookout for is how will that investment and those two different approaches kind of coalesce into supporting, you know, the modern the new contingent labor workforce.

00;11;16;15 - 00;11;42;29

Michael Matherly

And because they haven't really been cohesively doing that to date, you know, the VMs have started off as staffing, temp, labor, workflow support, which they've done a great job. FMC has started off doing freelancers really focused on building talent communities, both public and private, focused on building the profiles, but really the engines on the back end of them.

00;11;42;29 - 00;12;20;14

Michael Matherly

When you were talking about SOW, the workflows were very similar. It's just the upfront activities are very different for a corp to corp where you have to do due diligence, you have to check their DUNS number, you have to do, you have to do the insurance check. You have to do a lot of things to align with your client company's regulatory environment and other requirements for their position in the market, which is different than when you're hiring freelancers, where the real focus on the due diligence phase, the upfront onboarding phase, is, you know, proper work or classification.

00;12;20;16 - 00;12;59;05

Michael Matherly

But once you get past that stage, you really are in the SOW space. You're putting a statement of work in place with both of them. So the functionality that we need in the platform, the value that the platform can add to those two different channels really converges and should be the same. And I don't think it's too far of a stretch to suggest that the upfront, the onboarding, the initiation of those requests can also be have a common entry point, if you will, and be handled almost on the same and the same workflow.

00;12;59;12 - 00;13;11;11

Michael Matherly

It's just you're diverging two different checklists within your platform to to, to onboard them properly according to their type of vendor ship that they being engaged at.

00;13;11;13 - 00;13;34;16

Jonny Dunning

Yeah, definitely. I mean I think when you when you break into services procurement and you and you kind of segment it that kind of aspect of it where you lean more towards the kind of freelancer side again is quite different to the real heavy duty I.T services, big consulting firms, you know, real kind of heavy duty services procurement, I think.

00;13;34;18 - 00;13;39;27

Jonny Dunning

But you have you worked within the VMs landscapes as well. You've got experience on that side as well.

00;13;40;00 - 00;14;24;25

Michael Matherly

Yeah. No, when, when Capital One gave me that great opportunity to go out and start my, my own business, I was the supplier diversity champion of Capital One and as such I had been going to the NMSDC, the National Minority Supplier Development Council conferences on an on a regular basis. So, you know, I had hung my Shingo out as independent consultant sourcing for services and decided to go to the very next conference, which was in New Orleans of the SDC, And lo and behold, on the floor of that conference I met a good guy named Doug Levy, and Doug Levy was at that time the head of sales for Beeline.

00;14;24;28 - 00;14;53;01

Michael Matherly

And he and I somehow started talking about SOW and what I'd done at Capital One and how I had both managed our internal MSP, but also it developed the technology and Doug being a part of Beeline, which they hadn't spun off Pontoon yet, So they had both the MSP and the VMs. There. So he engaged me from my first consulting engagement shout out to Doug every time I see him.

00;14;53;01 - 00;15;28;28

Michael Matherly

I thank him profusely for for giving me a start and give me the confidence to continue being an independent provider. But we worked on developing that strategy for Beeline, both on the MSP side and the VMS side, and that was wonderful. We had a great experience and it was a nice long engagement and but it did lead me into the space of saying, Look, you know, Beeline is not the only one out there that could probably use some support or help with with their SOW capabilities.

00;15;29;00 - 00;16;01;17

Michael Matherly

So after that, I actually went to work for IQN and before Beeline or before they bought Beeline and was their SOW practice lead. And interestingly enough, John Martin, the late, great John Martin, who was the chief operating of chief technology officer at App IQN at the time, hired me in between him making the offer and me actually starting is when they made the decision to bifurcate their business VMs and MSP.

00;16;01;20 - 00;16;37;15

Michael Matherly

So I thought I was coming into another situation where I was going to be supporting MSP and technology. But you know, overnight IQ, it became a technology platform only. So I found myself, thankfully it was a great experience working with the team there selling, strategizing, designing solutions, developing strategies. And really cool to me was working with the MSP partners and was part of the group that sort of had to convince all these MSPs who IQN and used to compete with.

00;16;37;18 - 00;17;00;17

Michael Matherly

Now we had to convince them that, no, we're just technology. We want to partner with you as a VMs. So that was a bit of a challenge and conversations, but you know, a couple of drinks, you know, several dinners, consistent confidence building, trust building and it worked out. So I really had the opportunity to work with some great people, really just that team over there, you know?

00;17;00;19 - 00;17;28;17

Michael Matherly

Kelly Tapfin says lots of the MSPs that that ended up working with IQN and I would kind of be the SOW. technology guy that would join in the presentations or help with the discoveries and so forth. So it was a great exposure for me to learn that side of the business, but also be focused on the technology. And truth be told, I really love the technology aspect more than the service side.

00;17;28;19 - 00;18;05;22

Michael Matherly

But the reality of our business is you need to have both of them in one capacity or another in order for a SOW based solution to be successful. But yeah, and then and then I also worked with Shashank and Narayana at Vendly. They were very kind to engage me as well, and I spent a couple of days in their there, their first Cincinnati offices talking about SOW and they were, you know, super cool and how they were approaching building the VMs.

00;18;05;24 - 00;18;33;16

Michael Matherly

They were very engaging who really knew their stuff and really wanted to build an SOW capability that would compete, right? Because they were the newcomers. They had to build something that would compete with the IQNs Beelines and Fieldglasses and, and obviously they ultimately did not because of me, but because they were really smart guys and they they got their hands on a bunch of money that enabled them to to to really just build a great, great product.

00;18;33;18 - 00;18;52;08

Michael Matherly

So that's my and I'm supporting one that I can't name right now, helping them develop. And it's a mid-tier VMS develop their ASOW capabilities. So yeah, technology's big part of my, my, my life and my, my geekiness over SOW

00;18;52;10 - 00;19;14;12

Jonny Dunning

I find it fascinating and I think one of the areas that would be great to drill into, which is inevitably we will do as we go through this discussion. I kind of just making some notes here as we talk. And one of the things I've noted down here is might sound overly dramatic, but the fight for SOWbecause if you look within MSP providers, there's been that battle.

00;19;14;14 - 00;19;42;12

Jonny Dunning

You know, is this a priority? Do we want to invest in it? Is it taking attention away from other things? Is it confusing all sales scenario? Is it are we, you know, kind of putting someone else within the organization's breakfast and the same within the VMs in the sense that if you want to create a best in class solution for managing people in time, that's different from creating a best in class solution for managing, you know, real outsourced work provision.

00;19;42;14 - 00;19;49;26

Jonny Dunning

So I think that's a that's a kind of a bit of a theme that would be great to tap into as you go on, because I see it all the time.

00;19;49;29 - 00;19;51;16

Michael Matherly

But I do as well.

00;19;51;18 - 00;20;14;03

Jonny Dunning

Yeah, I mean, just just to go back to are you were really heavily involved in actually in the staffing industry before. It was cool. I don't know if it's cool now. I think it is, but but but really the early, early days of it and the fact that you came from a tree services procurement background is quite rare.

00;20;14;03 - 00;20;40;01

Jonny Dunning

That was kind of ahead of its time. You got a lot of the kind of large MSPs now trying to trying to bring in that sort of talent, trying to have that kind of capability. But that must have been there must have been some scenario. It must be great, but there must have been some scenarios where what you were saying fell on deaf is where maybe some staffing organizations it was so early in the game, it was difficult for them to get their head around it because that core business was such a big, big area of growth.

00;20;40;03 - 00;21;06;06

Michael Matherly

Yeah, no, I look and I can remember having conversations with some really great staffing firms who also had development shops and could do project work. And you know, they, you know, they, they wanted to get on the list. Right. And and they had the mentality of of our program and other programs I was aware of of how do we get on the SOW, the project list.

00;21;06;08 - 00;21;48;05

Michael Matherly

And the reality was staffing and project work are different from soup to nuts from beginning to end. And so I can remember working with our suppliers because we wanted them to be successful on this side. If they had capabilities that we could leverage because then we could negotiate more favorable terms when they were supporting two channels. So we really worked on, you know, how they branded themselves and subsequently part of my independent contractor work was consulting with staffing firms on on how to position themselves with procurement stakeholders.

00;21;48;07 - 00;22;25;22

Michael Matherly

And really the key messaging why she needed to brand yourself slightly differently. You can't go in to talk to procurement about doing projects and services for 500000 to $1000000 when and rely on your individual placements at 5070 $500 an hour. If the hiring managers were different, the process was different. The underlying objectives were inherently different, right? You know, when you come in and you have a particular skill set on your résumé, you're you're you're delivering that skill set in a staff setting.

00;22;25;24 - 00;23;11;25

Michael Matherly

That's great. It's important. But when you talk about SOW, that's an that's a unique scope of of objective and scope of requirements that the company is looking for. They're looking for results, they're looking for deliverables. So, you know, it didn't land well. When staffing firms will go in and talk to procurement stakeholders about their project work without really tweaking their message to be more procurement focused or project delivery focused, and they tended to land lean too much on their staffing success, which don't get me wrong, staffing success is wonderful, but it really doesn't mean a whole lot on the procurement side when you're talking about projects and services.

00;23;11;27 - 00;23;44;03

Michael Matherly

If you have the relationship that will buy you a meeting with procurement most likely. But if you don't go to that table with procurement, start talking the lingo and using the right terminology and really staying focused on deliverables and, you know, working with the internal team to get the right scope of work, designed and or developed and managed to, and you can incorporate project management into the delivery of your projects or services, then you really weren't going to make much headway.

00;23;44;06 - 00;24;12;07

Michael Matherly

And I think there's, you know, some staffing firms that have made the transition. Obviously they can do both staffing and project work, but it wasn't it wasn't an easy win for them. If you look back on history, it took a while for them to figure things out. And and just one last point on this. The the company organization also needed to adjust its thinking.

00;24;12;07 - 00;24;33;16

Michael Matherly

I can remember thinking our we would never talk to a staffing firm. We you know we're SOW we're special you know we do projects and services so we had to adjust our thinking to say, look, we should not hold that against them. We should actually look for the positive in the relationships that we've had with them and, and then test them.

00;24;33;17 - 00;24;57;16

Michael Matherly

Right. And just give them a chance. And some of them fell flat, but some of them actually turned out to be very good project delivery firms. And and we we started to treat them as such. It also led to either, you know, revised or additional in MSAs because the you know, you can't deliver a project under a staffing MSA or under a standard RPO.

00;24;57;19 - 00;25;14;13

Michael Matherly

You kind of have have to have a different approach to it. So there was a logistical things, but it was a great evolution that I think is still going on today. I think some staffing firms are still wondering, you know, can I get into it? How do I get into it? Is it worth getting into and so forth.

00;25;14;15 - 00;25;37;26

Jonny Dunning

So all about the risk is it's a different type of business, different the inherent delivery, contractual risks, whether they can find the people to do it, to do the work and deliver it and, you know, save the organization money against using a big contractor, a big outsource provider. Depends That might be the case, but have they got the capabilities to manage it effectively?

00;25;38;02 - 00;25;59;20

Jonny Dunning

I think the appetite for risk, can they separate the entity out effectively? I think in the UK, I mean, some of it was tied to the kind of like issues around misclassification to 1099 versus W2 in the US, while IR35 in the UK. When those laws changed, a lot of staffing firms tried to jump on the bandwagon of delivering project services, as I tend to call it.

00;25;59;23 - 00;26;16;24

Jonny Dunning

But really it is very different to delivering staffing solution. Some organizations we work with, some organizations that are very effective at it and some of them have typically been doing it for quite a while and they just got to the point where they needed to automate and get some technology in place to manage that kind of back to back as a process.

00;26;16;26 - 00;26;53;10

Jonny Dunning

But but really, if you compare SOW management with a continued workforce MSP solution, that's much more although they very, very different delivery channels, there's a similar problem solving set that you're dealing with and it's more about managing the suppliers, managing bids, making sure the process happens effectively, applying some input to make sure pricing and scoping is done effectively, and then helping the organization manage the logistics of the process, bringing in technology, helping them adopt technology is as the enabler for that.

00;26;53;12 - 00;27;11;05

Jonny Dunning

But whereas delivering project services is so different that it's it's, it's a big leap for a lot of these organizations unless they acquire somebody like you got coders and people like that out there where it's kind of built in and acquisitions are mergers and stuff like that that makes it very effective.

00;27;11;08 - 00;27;45;01

Michael Matherly

Yeah, no, it, it and it's it's one of those realizations that both buy side and sell side have really had that struggle to recognize and incorporate that recognition of the differences between managing those two different types of programs or different types of engagements. You know, the MSPs, as we're talking earlier, they they still struggle with understanding what it takes to deliver a great SOW management services.

00;27;45;04 - 00;28;30;16

Michael Matherly

You know, a lot of MSPs tried to do that with their existing temp Labor MSP staff and it just it just it fell flat and it and, and part of the reason why this credibility gap has been has developed within the MSP group because they haven't not all I'm not painting with a broad brush here but you can tell when an MSP provider has really invested in building out a team that understands SOW services procurement, not only how to management but how to trans actually support it in in in a in MSPs that is has not yet made that investment or that shift.

00;28;30;19 - 00;29;04;11

Michael Matherly

You know there's very limited capabilities of what they can do with the or their existing staff. And I'm not saying that's not a value add, I'm just saying it's a very limited value and it's not something that a company, a client organization grow with. Right. When you go in and find an external provider of SOW MSP services, whether it be an MSSP, a standalone business or even internally, you have to recognize that what the the company needs in support of that.

00;29;04;11 - 00;29;34;05

Michael Matherly

That's why in my current role at E Team, we've really focused on compliance and operations because most organizations that are pretty far down on the maturity curve are really looking for Gen one, maybe Gen two. SOW support solutions and the focus really continues to be, you know, control and visibility over the transactional activity in the spend and you know, bringing that.

00;29;34;08 - 00;30;06;05

Michael Matherly

SOW tail spend under control, you know, we're seeing, you know, a lot of technology. I influence technology starting to address that for the larger pools or buckets of spend in the tail spend. But even outside those, there's a lot that you can do with a VMs technology like yours, even just a service layer that can can bring, if not all, at least the majority of it under more active management.

00;30;06;05 - 00;30;34;27

Michael Matherly

I mean, I hesitate oftentimes when I'm talking about first or second generation solutions to to use the term best practice, because really that's up here. What you need is just a slightly better practice to get started, right? So getting that control and those visibility is like table stakes. And then what you do with that really starts to put you on a on a on a maturity path that will tell where you're heading.

00;30;34;29 - 00;31;10;16

Michael Matherly

And I that you see in talking to prospects and customers, understanding what maturity your stakeholders are, either procurement organization or the program that's looking at your technology to do SOW, Understanding where they are on the maturity path in the organization is really important to what kind of solution that they're really be open to. Whether the solution that you have is too much over their head and they need to get some help.

00;31;10;18 - 00;31;31;07

Michael Matherly

I mean, oftentimes we, you know, as a consultant have gone in and found organizations that knew they wanted to do something and they had to do something. But the ability to support the technology that I could have brought in wasn't there would be it would be wasted money on that software because internally they didn't really know what to do.

00;31;31;10 - 00;31;59;11

Michael Matherly

Now I could work with them to build their internal capabilities, build out the team and so forth. But generally what I would recommend was, Hey, get to get an MSP or service provider in here that that can help you implement because that's the key and then maintain, build and maintain your SOW program for at least a period of time and then consider enforcing it.

00;31;59;11 - 00;32;40;26

Michael Matherly

If that's what you really want to do. It's much easier to transition from an externally managed MSP to an internally managing MSP p on the setup side than it is the reverse. So like when, when I was at my prior employer, we had an internally managed program which ran really well. Every, every two years I would do the business case to determine, Hey, should we bring in an outside MSP to take this over for so that we can go do other stuff in procurement and we never could make the business case for it, not because of the economics per se, but because of the culture and because of the relationships we had with internal stakeholders

00;32;40;29 - 00;33;08;23

Michael Matherly

and the perceived and and the declarations of internal stakeholders who said, Don't you dare bring in an outsource provider or have an MSP take over this relationship. So we we really were fearful that we would lose the support of our internal customers if we brought in an external provider who just didn't have the internal knowledge that we had.

00;33;08;26 - 00;33;14;22

Michael Matherly

So eventually that employer made the transition, but it was a bit of a rocky one.

00;33;14;25 - 00;33;34;17

Jonny Dunning

Yeah, I mean, it makes sense to me that the SOW is going to follow a similar evolution to the kind of a regional continue workforce evolution. You know, you've got that interesting observation. I remember having a really cool chat with Jai Shekhawat about this, the founder of Fieldglass exactly the same topic. Just talk about diverging from do you want to be an MSP and technology?

00;33;34;20 - 00;34;03;04

Jonny Dunning

Do you just focus on technology and obviously Beeline and Fieldglass or IQN and Fieldglass had slightly different strategies. I kind of ended up ended up doing the same, taking the same route. Yeah. I mean, it's it's going to be easier for people to get a helping hand to start with, bring in some expertise, have someone bring in the technology, get things running, and then over a period of time they can they can manage that on their own when they're when they've really kind of gone through the process and got, let's say, a mature program up and running.

00;34;03;06 - 00;34;37;22

Jonny Dunning

But we've got some clients that take the technology directly that's super organized internally. They know exactly the spend they want to address. They've got the team, they've got the resources to do it. They're kind of in the situation you were discussing at Capital One. But but in other scenarios, it just wouldn't make sense. The clients that we work with, our MSPs that we probably couldn't sell to directly right now because they need that MSP as the intermediary part of it of people at a service and a technology enabled services, what they need where some organizations just need the technology because they've got the capabilities and what.

00;34;37;24 - 00;35;00;24

Michael Matherly

Look, John, I think that's why, you know, platforms like yours that can be standalone and you can integrate with a VMs, but you you certainly don't need a VMs to exist and to support either an external service provider, which I know you have MSP partners that you work with, and hopefully someday that will will work together as I built this program and capability out.

00;35;00;26 - 00;35;36;22

Michael Matherly

But internally managed services procurement is a very different. Beast So the ability to take on a of a dedicated SOW platform that helps them do their business internally is I think, exactly what the market needs. I used to be of the opinion maybe you were as well, you know, a few years back that it made sense. It made most sense to have all the channels of contingent labor being supported by a single technology and a single service provider.

00;35;36;24 - 00;36;02;28

Michael Matherly

This was years ago, before I had my eyes open to a different way of thinking about it, thinking that all of that needs to be managed together. If you want true channel optimization, you kind of had to have your hands on all channels, right? That meant staffing, that meant freelancers, that meant SOW, so that you could classify them properly and optimally and put them in the right channel and see it through.

00;36;03;00 - 00;36;28;14

Michael Matherly

Well, with the way systems are today and the highly integrated nature of APIs in the sharing of data, I no longer believe that. I believe that you can have a standalone solution. I believe you can have a standalone FMS solution for freelancers and you can still use the VMs for for your for your temp labor staffing firms and with the ability to kind of gather or capture the data and bring it up for analysis.

00;36;28;22 - 00;36;54;06

Michael Matherly

That's the key. What I think is every one of those solutions, if, if I were to get on my soapbox, you should have their own decision tree tool on the front end to allow for other channels to exist and for the customer to have a common entry point that allows them to do their own self classification, if you will, and have it routed to the right system.

00;36;54;09 - 00;37;14;07

Michael Matherly

There's no reason that if it's an SOW, you can't go to Zivio or if it's an F, you know, if it's a freelancer, it can't go to Zivio or to work suite or somewhere else. And if it's staffing, then you go to one of the VMs. That's an easy gap to fill and it's not really even a gap.

00;37;14;07 - 00;37;44;25

Michael Matherly

It's just a hey, it's a simple technology to use. You can still manage the entirety of your contingent labor workforce using multiple systems. So you know, no longer are you tied to a VMs or beholden to a VMs to do everything for you and to let the VMs in of itself determine the scope of your program? What I think is interesting and missed opportunities still is the MSPs haven't really figured that out.

00;37;44;25 - 00;38;10;08

Michael Matherly

And until recently, you know, back in the day, you know, I was curious not only why weren't MSPs getting into SOW, but why weren't they doing you are an air right employee of record as agent of record helping companies manage their freelancers. Even before COVID hit, we started to see the spike, and the freelancers were the fastest growing segment of the extended workforce.

00;38;10;11 - 00;38;35;22

Michael Matherly

But then COVID just threw fuel on that. And, you know, you're starting to see a little bit more, but you're starting to see the evolution of the emergence of yours. And AOL was like my company, YouTube, that really are filling gaps that the MSPs have not yet really incorporated as as their own. I'm not sure I quite understand it.

00;38;35;24 - 00;38;52;06

Michael Matherly

There. Are there different risks, different models in different investment. But nonetheless, I think I think in this day and age you can manage all channels quite effectively with different technologies and differing service providers.

00;38;52;09 - 00;39;17;04

Jonny Dunning

Yeah, I mean, I'd definitely be joining you on that soapbox, that one where we're exhibiting at the CWC Stopping Journalists Summit Europe in London at the end of May. And it's one of the things I'm really interested in talking to people about, you know, just the fact that it's a lot simpler than people actually realize. Yeah, we've got plenty of programs in place where this is all happening and it works.

00;39;17;06 - 00;39;35;27

Jonny Dunning

You know, you need to you need to link things up at the beginning and then you need to link things up with the data end point. But it absolutely works. And you're dealing with the right system for the right purpose rather than trying to. You can't, as you said, about the different kind of the different parts of the technology ecosystem, you know, they're coming from different angles.

00;39;36;00 - 00;39;59;10

Jonny Dunning

If your angle is dealing with people and, you know, engaging people on a time basis, that's totally different to outsourcing the outputs and deliverables of a project to an external service provider, it's a very, very different things. And then you've got direct sourcing, you've got freelancer management, you've got the gig side of it, and then you've got the traditional contingent workforce contractor and temp side of it.

00;39;59;12 - 00;40;18;03

Jonny Dunning

You know, it's horses for courses. If you're going to if you're going to do it properly, you need to make sure you've got the right platforms in place for that organization, for the different channels that they utilize and linking it together. We find people have decision trees in sometimes in their source to pay platform, maybe work days services, all different places.

00;40;18;03 - 00;40;37;15

Jonny Dunning

We've got some situations where the the decision tree sits in severe and there's actually you know the outcome of that decision will if a contingent scenario it will push into the VMs. It's you know people always say, how do you integrate with a VMs? And I'll always think to myself, what what does someone mean by that? What do they want because of that?

00;40;37;17 - 00;40;58;04

Jonny Dunning

Because ultimately it's almost it's almost you need to be integrating a level above that. You need to be integrating at the point that this is part of your suite and then obviously you need to be looping things up around the data. I've had some I had a brilliant conversation with Chris Rembrandts who's who's got the the data guy in the contingent workforce.

00;40;58;06 - 00;41;17;05

Jonny Dunning

Magnet got his own company, Road Consultants, and we had a really interesting debate which actually started at the CWA summit in Dallas last year when we're talking about this and just saying the data's different, you can't just homogenize it and stick it all on the direct. It doesn't it doesn't work like that because you get deliverables and the complexity of true service is the given.

00;41;17;07 - 00;41;38;20

Jonny Dunning

So I absolutely 100% agree with you. And as I say, that's something that I'm very much looking forward to on talking to people about these kind of summits, because it can be done. I think a lot of the time people are just in a situation where they just think, to coin a phrase of pull. Vincent runs that this is in the too difficult to do box, but it doesn't.

00;41;38;23 - 00;41;42;05

Jonny Dunning

And it's really that starting to come to the fore now.

00;41;42;07 - 00;42;06;06

Michael Matherly

It is. And one of the things that we've noticed, and maybe you have as well, is when you have these more targeted solutions that can support or, you know, stand alone, it used to be that the VMS technology would say, well, no, we can't do anything for you unless you've got 20, 25, $30 million invested w spend. We can't even turn the lights on.

00;42;06;06 - 00;42;29;14

Michael Matherly

Right. You know, for the older legacy systems that that was true. It was a very heavy lift just to turn it on. But nowadays with the targeted solutions and I would dare to say that yours would fall in this group, you can actually add value and be profitable for yourselves with a much lower spend amount running through your system.

00;42;29;17 - 00;43;03;24

Michael Matherly

So, you know, one of the objectives of what we built in our building at 18 is the ability to support customers who only have five, seven, eight, $10 million of SOW spend and the ability to support them add value and help them grow to be one of the 2025 million over time. That's an underserved market. On the SOW side that I think we're really going to be going after and we're looking at technologies to support us in going after that.

00;43;03;27 - 00;43;25;08

Michael Matherly

You know, obviously you have to be ready, willing as a s so w service provider, we are still that stepchild right when it comes to full tech contingent labor, If somebody is doing a Gen one, they'll say, yeah, we want to do SOW, but let's make that phase two, phase three in the out years. Let's look and I understand it.

00;43;25;10 - 00;43;46;06

Michael Matherly

That's a different show that we could talk the for hour on, but now the ability and this was you know when I do consulting and that's it's no secret now I think everybody's kind of suggesting this is don't make it so damn difficult to implement. So w put a switch on your system so that you can slow the switch.

00;43;46;12 - 00;44;10;04

Michael Matherly

So Derby's on with a very standard default that is aligned with better or best practices so that the client can jump into the WS and manage just a small handful to see what it's like or as kind of a stepping stone into a more full blown of support service or scoped program. And we're starting to see that more.

00;44;10;05 - 00;44;36;11

Michael Matherly

That is what excites me, is now the threshold for for the demand holders, for the for the buy side. The the bar has been lowered. Hey you mean I you know, I used to ignore my $5 million of STW spend because I didn't have a technology to support me. Now, there are plenty technologies that will support them and they can get real value out of, and it becomes a growth platform for them.

00;44;36;13 - 00;45;05;17

Michael Matherly

And, you know, we often talk in our business about how a contingent labor and certainly service of procurement as a W spend is a differentiator, a competitive advantage that, you know, client companies have over their over their competitors. Well, you know, that happens at the mid-tier as well. So the ability to become a W client of preference is real for the suppliers.

00;45;05;19 - 00;45;34;22

Michael Matherly

If you go in and you've got to deal with kind of a chaotic environment and you know, the onboarding is painful and the the start is delayed for 30, 60 days after the contract is signed. If the contract ever get signed, you know, that's a real pain in the ass for for the vendors to deal with. So the ability to sort of create a smooth engagement and onboarding process, not only benefits from control and visibility for the client side, but let's not forget those vendors out there.

00;45;34;22 - 00;46;01;20

Michael Matherly

They have choices to make. Yes, they want business, but they want the business. It's easier to be onboarded. Has automated workflows automated e signatures on their S WS a little bit more sophisticated and savvy with regards to engaging them. That's that's highly critical criteria for vendors to consider.

00;46;01;22 - 00;46;23;15

Jonny Dunning

Such an important point. I think, you know, the vast majority of companies in all sectors globally have a problem with managing services. And it's this is a simple fact. They don't manage it effectively. They have all kinds of problems. What you're talking about with Capital One, where they were kind of in this, you know, very, very basic situation.

00;46;23;15 - 00;46;45;15

Jonny Dunning

I see that all the time now. Even now you're talking back in the nineties. I see that all the time now with large organizations that you think would be highly sophisticated. But the barriers around legacy technology, whether that be legacy VMs or whether that be source of paper cuts, pay platforms, those are not going to support the capability to manage and control this type of spend is one of the problems.

00;46;45;18 - 00;47;00;21

Jonny Dunning

But the other problem is just it's too big to move. It's too big a problem to solve. If you've got if it's got to be 30 million, 60 million, 100 million spend to make it worthwhile. And it's going to take, you know, six months to two years to roll it out. And it's potentially going to be, you know, a dog's breakfast by the end of it.

00;47;00;23 - 00;47;18;23

Jonny Dunning

That puts a lot of organizations off. And it might be that, you know, in a spend category of, say, I don't know, 3 to 10 million annual spend, that doesn't mean that's all of this. But they could have a billion of spend that they're dealing with. But they might just be willing to dip their time in and they might want to manage that particular areas.

00;47;18;23 - 00;47;36;03

Jonny Dunning

And we've got some organizations that will come to us and say, we just want to manage the consultancy category or we just want to manage this tail spend that sits adjacent to contingent workforce where it's those kind of gray area. So and other organizations might say it's all of the relevant categories or just I.T services or something like that.

00;47;36;03 - 00;47;57;24

Jonny Dunning

So I think just having the flexibility to be able to implement solutions at all levels and implement them in an agile manner quickly, make them easy to use, make them dedicated to their purpose. I mean, we've got, we've got clients who are seeing savings in like sub six months, see return on investment and that's including MSP costs within those programs.

00;47;57;24 - 00;48;28;22

Jonny Dunning

So there's so much to go after, but the level of maturity is so low. And I was going to ask you actually, upon that when you were talking about Capital One, I find it fascinating and like I say, lots of companies now are still in that situation. And it is and it's something that one, our customers Telent the key procurement stakeholder at Talent said to me right point which was it's very hard to put this case for change forward in an organization that's doing really well but be profitable.

00;48;28;29 - 00;48;48;15

Jonny Dunning

They're financial services organization. They're not really worried about cash. It's not the biggest problem. You know how to get that moving. What was what were the key drivers within Capital One that actually got this made this a priority other than and this is something I always say, you need a change agent. You were the change agent that was saying this isn't good enough.

00;48;48;15 - 00;48;59;21

Jonny Dunning

We should be doing this better. There's problems. So that is a critical factor that I often say in these programs. But other than that, what was the key driver that you were able to or they were able to latch on to?

00;48;59;23 - 00;49;05;27

Michael Matherly

Now, are you talking about for us leveraging the AMS technology or outsourcing to the MSP eventually.

00;49;06;00 - 00;49;26;08

Jonny Dunning

Just basically saying this needs to be brought under control so we didn't have to. One, when when you're looking at this, you know, because often if you say so, if you say statement of work, some people hate that. But ultimately it is the key central point that unites all of this stuff because, you know, people can get confused in talking about different categories or indirect versus direct.

00;49;26;08 - 00;49;48;22

Jonny Dunning

And that depends what industry you're in. That's ultimately for us as a technology provider. If you were the type of services you're delivering if it's under if it's contracted under a statement of work, an outcome based or output based deliverables that is relevant, if it's not, it's not so the statement work is critical. But but then when you get into the world of services procurement organizations, you mentioned AT

00;49;48;22 - 00;50;04;21

Jonny Dunning

Kearney earlier, I had a great conversation with Dr. Elouise Epstein from AT Kearney and I was talking about services procurement and she just stopped me and said, John, are you being a bit of a gatekeeper, you know, procurement circles? What does that mean in procurement teams? You know, they're looking at a category strategy.

00;50;04;24 - 00;50;06;24

Michael Matherly

Environment versus direct.

00;50;06;27 - 00;50;23;15

Jonny Dunning

Yeah, exactly. And so in terms of like who owns the services procurement, you know, it can set across multiple categories. It's a complex thing. So so when you were within Capital One, what was it that actually pushed it over the edge of someone saying, let's do something about this?

00;50;23;18 - 00;50;48;11

Michael Matherly

Great, great question. I can tell you who doesn't own service of procurement or adobe spend. It's not h.r. It's not talent acquisition and sometimes it's not even finance. Although finance is has a better chance of influencing it. So to answer your question more specifically, what worked for me in a capital one was simply having an owner for it.

00;50;48;14 - 00;51;18;07

Michael Matherly

I mean, literally being the finance manager and having the majority of that billion dollars of spend with professional services or consulting firms going through it, going through my hands and my chief of staff's hands for the invoices and the payments, we as a key stakeholder within the organization or I'm sorry, key consumers of consulting spend at in the organization.

00;51;18;10 - 00;51;44;01

Michael Matherly

We recognized something was wrong and we didn't like that right. We we felt like it wasn't being managed very well. You know, there were functional differences where, hey, that's the supply chain procurement organization. That's their job. Well, at some point you just had to recognize, okay, it may be their job, but it's not getting done. And I'm going speaking to this from a a level of maturity of the organization.

00;51;44;04 - 00;52;21;14

Michael Matherly

Nobody's going to come back and say that your capital was ill managed because of this. They actually were very focused on CRM maturity, advanced, and that actually helped me manage to spend a little bit more. That's a maybe a separate conversation about how the organizational maturity influenced what we did on the service procurement side. But when our head of supply chain said, Come over and do it or leave us alone, and I took him up on that and my i.t leadership supported me in that.

00;52;21;17 - 00;52;40;00

Michael Matherly

It that was the, the key step, just appointing somebody to look at it. And even though we didn't have systems that we didn't have the ability to control or have visibility across all of it, at least these two eyes started looking at it and started to see some anomalies, started to see things that just didn't make sense, like why?

00;52;40;00 - 00;53;07;21

Michael Matherly

Why are we paying in I.T this rate for a business analyst? But over in the operational side or the card side, they're paying a totally different rate from the same consultancy. Why? Why, why did we have, you know, seven, eight different firms doing business process mapping? Right. We were, we were in hypergrowth. So everybody is trying to figure out what's our internal processes, how do we improve?

00;53;07;23 - 00;53;47;08

Michael Matherly

Well, one of the low hanging fruit that I found was we had like seven or eight different providers of business process mapping and they were using different technologies. One of them was using Visio. This tells you the age of the story and others were doing it on PowerPoint or something else. So there was no consistency. And then finally we found we found that one of this scopes of work actually had one of the deliverables was to aggregate or concentrate all the different organizations business process mapping into a single process map, you know, zero one, two, three so that they were all talking in an integrated with each other.

00;53;47;16 - 00;54;18;28

Michael Matherly

So that choice of consulting. But and you use little factual points, evidence points like that the discrepancy in the billing from the same consultancy, same level resource doing the same function, just four different department within Capital One, you highlight those and when you highlight them in a way that shows that we're not spending money very wisely and, you know, we're kind of being stupid when we do this.

00;54;19;01 - 00;54;45;16

Michael Matherly

The the case for change becomes self-evident. And I think that I probably spun my wheels just jumping up and down and saying, we've got to change, we've got to change this, and didn't get anywhere because I wasn't engaging people. I wasn't giving people a cause for them to change their activities. But when I brought to them, Hey, hey, you know, Card and Capital One, there was a card department.

00;54;45;19 - 00;55;18;13

Michael Matherly

Hey, card department. Did you know that you're paying you know, about 30% more for the same Deloitte resource than your friends over in it? Are you ever wonder why that is? Well, that immediately got them on board saying, well, okay, yeah, let us let's let's try to negotiate deals in MSAs or rate cards and so forth. So bringing those things, those real life issues, opportunities for improvement to your internal stakeholders is key.

00;55;18;16 - 00;55;41;26

Michael Matherly

And we did enough of that through our manuals, spreadsheets, non system managed content or contract management system because we we had a contract management system that I was able to look at and do some searching and it was it was, you know, I could find the different vendors as a database and so forth. Pretty much it wasn't great, but it was enough for me to do the initial analysis.

00;55;41;29 - 00;56;14;26

Michael Matherly

We were able to put together enough of that self evident data that that gave individual departments the cause for change, so that when we went and tried to put our whole arms around it and say, Hey, now let's do something really special, because now all of you have skin in the game, let's let's build. Because we had just gone, we just committed to PeopleSoft and our CIO, Gregor Baylor at the time, I think said, Look, Mattingly procurement, you we get it.

00;56;14;26 - 00;56;48;04

Michael Matherly

You need a system for for procurement, but it has to be a bolt onto PeopleSoft or it's nothing because we can't put something new into our environment right now. So fortunately, the people at PeopleSoft, we were using Espero for our temp staffing, we were at negotiation time and we leveraged our CIOs mandate and it said, Look, we're not going to renew with with Espero unless you agree to build this workflow at our direction for SOW.

00;56;48;06 - 00;57;19;16

Michael Matherly

And it worked. So that's how I ended up being the lead business analyst on that, on that project. Interestingly enough, to show what a small world is and how we're still evolving as a as an industry. When I went back as sourcing for services, supporting GRC to, to manage the Oracle I.T. So w spend category, they were still using the functionality that I had built within the people platform, you know, eight, nine years prior.

00;57;19;18 - 00;57;59;22

Michael Matherly

So the things I remembered, my God, it's still there. Obviously they had advanced it and they've done a good job. But it's funny how those things come back around to you. So my, my, my, my big answer to your question is it's is highly important. But if you're in a immature organization, I guarantee there is data that you just have to figure out how to get your hands on it that will make the that your internal stakeholders decision to go along with you putting a technology, maybe even an internal or external program team place, it'll make it self evident and it'll be an easy decision for them if you show them how they're being

00;57;59;22 - 00;58;21;05

Michael Matherly

impacted negatively by the lack of a system, by the lack of control, by the lack of spin management practices. It takes a while. If you're if you're if you're in a in a growth organization where in a culture where the managers are empowered to do what they need to do, I had some people say to me, No, I don't care.

00;58;21;05 - 00;58;49;00

Michael Matherly

Look, I may be wasting 10% in how I'm doing this, but my rely on these projects is 200%. So don't bother me with that small amount. That doesn't influence me. I'm not moved. So so that becomes a bit of a challenge in some organizations, and that's when you sort of need to sort of recognize, okay, well, that may not buy that individual department manager who's managing that particular platform or application.

00;58;49;03 - 00;59;13;00

Michael Matherly

So you kind of go to somebody who will care. So we got our controller on board, we got our CFO on board. And even to the extent an interesting story in in sort of it was it was kind of like the milestone where I realized and me and my team and my leadership realize, okay, now we're hitting on all cylinders.

00;59;13;03 - 00;59;46;14

Michael Matherly

We manage obviously within the professional services group, the Big Four, and I won't mention which supplier this was a very good supplier, but nonetheless they had that relationship with the controller, with the CIO, with the CFO. And what I recognized was they weren't abiding by the procedures and the the operational activities and they weren't weren't responding to my request to put a rate card in place and weren't responding to my requests to do this, that and the other.

00;59;46;16 - 01;00;14;08

Michael Matherly

So anyway, they were basically ignoring us because they could go to their executives in the C-suite and still get the job and still get the projects and still get their $5,000 million contracts renewed. And we gather enough data and came up with a strategy that basically said, look, we're going to you know, me and my chief procurement officer at the time got him.

01;00;14;08 - 01;00;39;05

Michael Matherly

Arnold saw we put out a final request to the to the big four. And in other consults, it's not just a big four and said you must put in place a rate card in order in order to for us to renew your MSA. So for you to continue to get new business here and we put it out, we did a follow up with a warning.

01;00;39;08 - 01;01;00;07

Michael Matherly

And before then we had we had sort of set the table and we had gone to this controller, to the CFO to the CIO, to the other executives we knew they had relationships with. And we said, hey, guys, here's what we're doing. You're going to get a phone call. You're going to you're going to have a topic on your agenda with your senior partners that you're meeting with from here.

01;01;00;13 - 01;01;27;25

Michael Matherly

Here's what they're going to ask you. They're going to say procurements being a nuisance. They're they're trying to get us to do this and that, and it's distracting us from providing you your product What we want you to do, we want you to commit to do is that you redirect them to to Michael Matherly. And lo and behold, our controller got the call from this unnamed Big four provider and they redirected to me and it happened with two of the big four.

01;01;27;27 - 01;01;48;04

Michael Matherly

One of them finally acquiesced and agreed to sort of follow the program rules just to give us visibility and some control and filled out a rate card, the other one didn't, and they got effectively not blackballed. But we simply that was what we said, that our threat was if you don't join the program, you're not going to get any new business.

01;01;48;06 - 01;02;22;06

Michael Matherly

So one of them acquiesced. We got the rates way down. The other one basically ended up taking like a six or seven month hiatus because they weren't getting in new business. And finally they came back to me saying, okay, we're ready to reengage and we'll will abide by the program rules. We'll put a red card in place. It's a big deal because we had developed a consulting rate card, not just through the Big Four, but through the I.T. consultancies and even included the the offshore providers, accenture, other h.R.

01;02;22;08 - 01;02;45;16

Michael Matherly

Consultants that we were working with. And when you're talking about what we had then whittled down to that category to being just over 400 million and to have roughly what we did was we built an implied rate card based on the W's for the last year. We're like this the rate we negotiated with 16 and a half percent below that.

01;02;45;19 - 01;03;09;21

Michael Matherly

So you take 16 and a half percent across 400 million that that category was spending with us. That made my career that that really made a difference. And they started the record and they delivered just as much. They competed for work. Now, and everybody had visibility to it and everybody was recognizing some savings. It wasn't just procurement savings, right?

01;03;09;22 - 01;03;39;27

Michael Matherly

Because procurement doesn't say procurement because we're not the ones hiring them, really. It's I.T., it's card, it's operations, it's the other areas within the company that we're actually spending. And another way to look at it, 16.5% more than they needed to to get the projects done. Long, long answer. But there is a method to the madness and how you garner influence and how you drive change in organizations through the service procurement function.

01;03;39;29 - 01;03;58;04

Michael Matherly

And it all has to do with data. And yes, having systems that make data readily available is super convenient and nice. But even in the days of no systems or limited systems, you still can get your hands on data and make the case.

01;03;58;07 - 01;04;31;14

Jonny Dunning

That was a fantastic example. Michael O'REILLY Really brilliant. More and more people are starting to do this. And what you've just outlined there is the case for change. Yeah, what I was talking about earlier with regards the drivers, like traditionally you might think some organizations is going to come from a primary risk or misclassification driver. We've got to really say as a is going on, people are getting around headcount freezes data that are, you know, this is the stuff in there that's looking like contingent workforce and it's badged as so that's one angle that people traditionally think about.

01;04;31;17 - 01;04;51;06

Jonny Dunning

The second angle is spend management. You know, we're spending too much. We could be making savings and we're not. And the last one is efficiency. When you talked about managing 600 or so WS in a year, you know, procurement teams are often very lean. Typically they can't manage this stuff manually and therefore no one knows anything below the level of a PO.

01;04;51;06 - 01;05;11;05

Jonny Dunning

There's no control over it. But but those so those three are clearly drivers. But what you need is you need a change agent, you need somebody who makes it their business to say, what the hell are we doing here? And they get high and they put the information in front of the right people. It's a brilliant, brilliant taste of change in an example that I wish.

01;05;11;05 - 01;05;25;07

Michael Matherly

I wish Jonny I could say that I was smart enough that I went into procurement with this strategy in mind, and it was just a matter of execution. But the reality is, I've got lots of dents in my head for banging my head against the wall for the first three years before I kind of figured that stuff out.

01;05;25;09 - 01;05;37;00

Michael Matherly

And it was a painful lesson, but nonetheless, it was a lesson that really added value. And sometimes you just have to go through that and you just have to be curious, right? You have to ask the questions. You have to.

01;05;37;00 - 01;05;37;15

Jonny Dunning

Be.

01;05;37;18 - 01;05;59;29

Michael Matherly

Willing to not accept two different rates, like materially different rates being charged in two different parts of the company. I mean, if that doesn't send off red flags or flares within a procurement person's mind when they see that, then they shouldn't be in procurement, in my opinion. You have to be curious. You have to be willing to ask the tough questions.

01;05;59;29 - 01;06;19;03

Michael Matherly

You have to roll up your sleeves and go find out why is this. And when it leans back to a vendor or a relationship or a contract or whatever the root cause is, that's your opportunity for for solving problems and adding real value.

01;06;19;06 - 01;06;40;00

Jonny Dunning

Yeah, 100%. I mean, you know, it comes down to that thing of who owns this problem, who's going to take ownership of this problem. You and I know we could walk into most organizations if we were given the view or given the resources. It's not that difficult to put forward a case for change around this sort of stuff because it's so obvious the potential savings are so massive.

01;06;40;02 - 01;06;58;15

Jonny Dunning

The stuff that people just aren't doing is so, so glaringly obvious, But when it's right across different categories, you know who's the stakeholder that's going to own that? Is it? An individual category manager is a head to procurement, is it a chief procurement officer? They've got all sorts of other problems to look at and often they don't understand that solutions are available.

01;06;58;17 - 01;07;17;13

Jonny Dunning

And this is where people like, for example, procurement excellence can be an excellent an excellent centerpoint for this sort of stuff. When they look across their technology stock and they are saying, okay, we've got this covered, that covered, etc., etc., but we've got a massive gap here around everything we're buying under a statement of work. We come across in multiple cases.

01;07;17;16 - 01;07;36;02

Jonny Dunning

But yeah, but such a fundamental thing to have a change agent in an organization. You just says this isn't good enough, something's got to change. And then you've got some clear reasons. Risk of misclassification, option spend, management on efficiency. It just can take that thing through. But again, that's where being able to start small prove the business case to change.

01;07;36;02 - 01;08;02;09

Jonny Dunning

Take a small segment. The burning area, the urgent one, get it under control, get a system in place, get a lightweight service provision in place, prove it, and then expand and, you know, we're doing we're rolling out pilots and proof concepts and stuff like that as well as full on programs. Yeah, but, but the I feel like if you look at the evolution of the contingent workforce model services procurement, it's kind of been left till now.

01;08;02;09 - 01;08;26;25

Jonny Dunning

It's really starting to come to the fore, but that's because it was too difficult. The technology didn't really support it. The service provision maturity wasn't there, but there are other blockers and the blockers were, as I said, legacy technology, whether it's like legacy VMS, source the pay procure to pay type platforms. That was right, whether it's to high cost level or it's just awful to use or doesn't do what you need to do.

01;08;26;27 - 01;08;47;28

Jonny Dunning

Then you had the the lack of knowledge within that space, which was a bit, but that ties into the third way, which was the, the kind of wrong stakeholders because if the MSPs are in a great position to be able to deliver services around this, if they build that function and they build that capability, it's as you say, it's a similar problem solving exercise to a continued workforce.

01;08;47;28 - 01;09;08;22

Jonny Dunning

MSP Even though it's very different understanding and mechanism, the fundamentals are trying to solve the problem to fit that. But where they were trying to approach it from a from a contingent labor point of view, they just didn't get it. And also, how are they going to talk to a senior procurement person and come across as credible? It's all they know is contingent workforce.

01;09;08;24 - 01;09;27;09

Jonny Dunning

Exactly. So they're trying to approach it through h.r. And type of, you know, with the best will in the world, they shouldn't be focused on statement of work. They should be focused on people and contractors and temps. So i feel like those things have really kind of stunted it. But now people are understanding that more and more I'm well.

01;09;27;14 - 01;10;00;04

Michael Matherly

And I'll out to sort of add on there Jonny and maybe you've you've adopted this approach as well. You know when you know in the organizations I've been in, especially in the last few years of supporting the MSPs or famers, you know, often times get called into the sales process. And one of the first things that I do is kind of do some discovery to sort test out what's, you know, who is the stakeholder in, what's their maturity, do they understand?

01;10;00;06 - 01;10;48;28

Michael Matherly

And the reality is, as a selling side, whether you're a VMs, an FMS, or as a technology or service provider, MSP or or standalone you, if you're trying to sell service procurement value or SOW value, if you're not talking to the right person who understands what you're saying, you're just wasting your time and, and it, it, it's one of those qualifiers that suggests that if they didn't, if they're having an esoteric conversation but with the wrong person and they're getting it, then you know, you have to look at that and say, okay, we need to disrupt whatever processes in place and get the right stakeholder to the table for us to talk to and who

01;10;48;28 - 01;11;04;14

Michael Matherly

really understands the value we can bring in. More importantly, can let us know what the real pain points that they are experiencing through the organization so that we can solve this for them if they're not able or my apologies, if they're not able, what's that?

01;11;04;20 - 01;11;06;08

Jonny Dunning

Is it for me?

01;11;06;10 - 01;11;29;28

Michael Matherly

It is. I don't know. I didn't answer it. It could be. But if you if you don't have the right stakeholders there, then it's just not going anywhere. And, you know, it's interesting, as I was listening to one of your podcasts and you guys were talking about how to implement really well, you know, going from SOW to implementation.

01;11;30;00 - 01;12;09;00

Michael Matherly

And one of the things that I found works really well has to engage the if you're an MSP, then to have the right kind of discovery upfront so that you can check the box when you go to say, okay, we know this person is serious and we know the maturity level. So then when you roll into implementation, you know whether you are just going for the low hanging fruit of just, just trying to, in the chaos, create control and invisibility, or whether you've got a client that is ready to continue their climb and move from their current practice to best or better, better or best practices and and maybe even they want to focus on

01;12;09;00 - 01;12;34;19

Michael Matherly

segmentations, right? So, you know, job one is control and visibility. But the reality is sometimes you get control and visibility on a certain segment of spend that you can't just say, okay, we've reached the mountaintop because you have it right. You need to get that control and visibility on or the ability to segment spend. And then you need to continue that maturity path for that segment to spend.

01;12;34;22 - 01;13;06;10

Michael Matherly

Because the fact that 50 of the spend is still at the control and visibility level doesn't mean that you shouldn't extend your capabilities on that segment. And to develop the category strategy, develop the source plan, and actually start to extend the savings or the value being added for particular segment of spend, while at the same time your MSP or your teen, your program is focusing on the control and visibility.

01;13;06;17 - 01;13;37;24

Michael Matherly

Now we say control and visibility like it's just everybody knows what it means. But the question that we like to ask, where we like to remind people of, you're seeking of visibility for a particular purpose, multiple purposes, really. But from a procurement perspective, what you want is, you know, the Holy Grail, which is to segment spend. The whole idea of segmenting spend is recognizing that, hey, there's a set of vendors or a poor spend that we can treat differently and, achieve savings unique to this segment of spend.

01;13;38;00 - 01;14;19;21

Michael Matherly

And maybe there's some some risk management, some compliance, some reach across your your, your commercial or whatever. There's some real value in treating them, managing them uniquely differently. So, you know, in an ideal world, you take, you know, you go in and you you do the analysis and you import compliance and operations to across the spend tail and then you've got a bunch of these segments that you're able to raise up through working with your internal procurement partners, of course, and say, okay, well, here's one that we're ready to sort of take out of the tailspin and actually create a category strategy for and drive the savings.

01;14;19;21 - 01;14;50;07

Michael Matherly

We can consolidate your vendors because that's one of the the you know, the value adds is hate your tail spend is $100 million across 300 vendors. The master vendor database is being crushed by vendor engagements that are 5000, 50,000, 20,000. And there are one and done vendors. So the ability to segment and create category strategies is really important.

01;14;50;07 - 01;15;13;15

Michael Matherly

And the the actual message I'm trying to instill here is the ability to do that at the category or segment level as opposed to a one size fits all solution oftentimes. And this is what I think kind of got the MSPs off to a slow start and the VMSs back in the day is it was of a one size fits all for us.

01;15;13;15 - 01;15;41;22

Michael Matherly

So w there wasn't the ability to actually recognize a segment of spend that needed a specific source plan or use a different template for their SOW or had a different rate card they wanted to be applied or, you know, there was a different sourcing process in place or it was, you know, okay to self source because they were pre negotiated for self sourcing within certain criteria.

01;15;41;24 - 01;15;42;20

Michael Matherly

The inability.

01;15;42;25 - 01;16;07;20

Jonny Dunning

Milestones be different things, you know, milestone could be a deliverable, it could be a consulting time, it could be a natural process, could be a KPI. This flexibility is so it's a huge air spend and it's hugely varied. I think in line with what you're saying as as I kind of iterated before, almost, companies have this problem, but not all of them recognize it and recognize it.

01;16;07;20 - 01;16;28;01

Jonny Dunning

Not all of them know that it's possible to solve it, which it is, and also do recognize possible to solve it. For not all of them. It's a priority at this point in time. But there's and within that, there's a set of organizations that are making massive savings, are making great strides, and really putting themselves at a competitive advantage by addressing this.

01;16;28;04 - 01;16;57;05

Jonny Dunning

And I think I've really enjoyed this conversation. I think it's so important to have these types of conversation especially with fantastic real world examples like you were describing with Capital One. That was amazing because people need to know that that's it's there for the taking. Basically. That's right. And and it's not as complicated as people necessarily think. It's just about somebody needs to make it their problem and there are solutions that are available and there are people out there who are lining up to solve these problems.

01;16;57;05 - 01;17;13;11

Jonny Dunning

And that other category is growing all of the time. And the sophistication of that category is growing all the time. But it's such a big opportunity in terms of that level of savings. You know, you're not talking about 2% savings. You're talking about, in some cases 20% savings.

01;17;13;13 - 01;18;10;12

Michael Matherly

Yeah, Yeah. I mean, if you've got severely under or totally unmanaged spend, just putting some very basic and again, that's why we focus on compliance and operations first and foremost, because it's the low hanging fruit, it's the genuine Genta solution that really adds incredible value to those organizations who have not yet matured on the service procurement space. The other thing I kind of tie back to is I think SOW being a channel or part of the Contingent Workforce program scope really was had some some additional hurdles to get over because of the category strategies versus the under Manage or Uncategorized spent and the one size fits all VMs or MSP type of solution doesn't support

01;18;10;14 - 01;18;34;13

Michael Matherly

the category lifecycle, doesn't support strategic sourcing. And the reality is unlike temp labor, when you have temp labor, you've got it contingent labor, you've got creative productivity, contingent labor, you got audit, internal audit, contingent labor, all those subcategories of contingent labor staff are managed as a group.

01;18;34;16 - 01;18;35;25

Jonny Dunning

Yeah.

01;18;35;27 - 01;19;15;27

Michael Matherly

The so w the service procurement has their own version of that and it's relatively called categories and subcategories but they involve different things in the workflow like a different template, like a different onboarding requirement, like a different rate card that's used like a different engagement with the, with the internal businesses. You know, one of the things that, you know, in a, a hedge that I can't name up in Connecticut that I worked for and set up a service procurement shop for is the value of the owner of that business working with procurement and the vendor to develop the right.

01;19;16;00 - 01;19;38;11

Michael Matherly

So w sometimes it's just process driven and procurement can kind of take the lead and push the envelope. But the reality is if the the business has to sort of be a voice and the scope and objectives and the direction of the SOW and you can't leave it to the vendor, right, because the vendor is going to make a ton of materials.

01;19;38;11 - 01;20;10;02

Michael Matherly

They're not going to hold themselves accountable to milestones or deliverables, and they're going to make it easy to extend or change, order or amend. So that keeps on going. And that's where you can tell an immature organization because. They have a lot of those types of contracts in place. But the ability to engage an internal stakeholder or an owner of the demand, the project scope to work with you on developing the SOW is critical because if one involves them in it in two, it becomes effectively a project management tool.

01;20;10;05 - 01;20;43;08

Michael Matherly

When you have an s W that is very well written, very clear and succinct about the deliverables and the milestones, what the acceptance criteria is, what the penalties rewards are, when payments can be requested and when they can't. What happens when this happens? You know, having that involvement of the internal demand holders is really key. And I wanted to make sure I mentioned that because, you know, you can't there's no services procurements superstar out there who writes their own RSA W's.

01;20;43;10 - 01;21;04;28

Michael Matherly

It you have to have the collaboration, the partnership with your internal stakeholders in order to make it work. And they can't do it by themself, clearly, because that's why there's chaos service. A procurement person can't do it themselves because they can't have knowledge about everything and they can't write the best asset W's for the internal demand holders.

01;21;05;00 - 01;21;23;03

Jonny Dunning

I couldn't have said it better myself, and I think it's a it's a brilliant kind of way to draw things together and kind of wrap up the conversation. And I really appreciate you taking the time to chat through this. I know you and I could probably this conversation for hours because we love it, but there's so much more to talk about.

01;21;23;11 - 01;21;27;02

Jonny Dunning

Nice to have to do it. Maybe we'll have to do a part two at some stage.

01;21;27;05 - 01;21;50;01

Michael Matherly

I kind it. I kind of knew Hook was coming, so I wanted to make sure I got a few key points there because I know you have a bit of a soapbox on several issues. And like the last few things I mentioned, the really. But it doesn't matter that there's modern technologies because modern technologies don't solve a lot of the core problems that service procurement has with their internal stakeholders.

01;21;50;04 - 01;22;12;18

Michael Matherly

The the adoption of a solution, whatever it is, is all about that relationship that procurement establishes with their internal stakeholders. If They're working together and they're they both have skin in the game. Then the solution is going to look to work for them. If they're not working together, then the best solution in the world, the best MSP, that's the AMS, the best Zivio

01;22;12;21 - 01;22;14;24

Michael Matherly

It's not going to do anything.

01;22;14;26 - 01;22;50;00

Jonny Dunning

Yeah, exactly. The technology and the service is a an enabler and a facilitator. Yeah. Ultimately the organizations need to have the drive to make this change that the rewards that you've seen it, I've seen it. We know it's happening and it's just exciting to be part of this. And I think this is going to be a really good one in terms of more and more people getting involved with these programs, more more technology providers getting involved, more specialist consultancies getting involved, more MSPs getting involved in wider staffing organizations, providing these services because there's so much to go after and so much to improve.

01;22;50;02 - 01;23;11;14

Jonny Dunning

Yeah, it's great to be part of it. And as I say, I really appreciate you getting involved in this conversation because I'm pretty sure that some of the stuff that you've described today, particularly the kind of anecdotal experience that you've learned over the years you've been involved with this is going to help people because it's just understanding what's possible and understanding also that everyone's facing similar types of problems.

01;23;11;16 - 01;23;27;01

Jonny Dunning

And, you know, it's not like we're sitting here going, there's the answer to everything. It's but there are ways to move forward. And so I really appreciate you taking the time and to give people the benefit of your experience and and some of the stuff that you've worked on, though.

01;23;27;01 - 01;23;54;06

Michael Matherly

Jonny, I appreciate you giving me the opportunity to have a conversation. I love listening to the conversations that you have with, you know, experienced, learn it smart people. I learned so much from listening to, to your talks with people. So thank you for letting me join in the conversation. And look, I want to give a shout out too, to you to bring Zivio along as a standalone SOW technology platform, because I think that's where we're heading.

01;23;54;08 - 01;24;28;22

Michael Matherly

Just like I think VMs, your prior venture, you know, targeted technology platforms I think are way more acceptable these days than they were. And I think we're just now starting to recognize the investment that comes into our industry can be really well returned if we're really answering the problems and solving the problems that people are actually having with services, procurement, with managing freelancers, with managing staffing.

01;24;28;28 - 01;24;49;01

Michael Matherly

And you don't have to take all three in a one size fits all or they all come together. They should be bifurcated, they should be managed separately. And I'd love that you and other technologies out there are really targeting the solutions to where the real pain points are. So thank you for what you guys are doing.

01;24;49;04 - 01;25;09;11

Jonny Dunning

Really, really appreciate your sentiments on that. Yeah, it's it's about commitment to really solve a problem. You've got to be obsessed with it and you've got to focus on it and you've got to make it your mission to solve that problem. And if you look at like ATS and HRA systems and things like that, there were various times in the past where people like they should all be one on or they end up better being separate.

01;25;09;11 - 01;25;30;03

Jonny Dunning

And it's just that continual kind of suite versus best of breed argument. But if we look at the technology we use in our daily lives, the apps on our phones, but you know, it's about using the right tools for the job. And and so, yeah, I love being involved in it, really specific nature because it means you really get into the detail and you can really focus on it.

01;25;30;06 - 01;25;46;00

Jonny Dunning

And as I say, it's it's the time in the market now where for us being specialists in this area, you bring in this proposition to market with a team. You know, it's, it's, it's a really great time to be part of this because people are starting to understand that more now, recognize that we make their lives a bit easier.

01;25;46;02 - 01;26;08;10

Michael Matherly

And more fun, right? I mean, we geek out of this out on this stuff because we love it. And I love to see the investment. I'd love to see the change is going. And I love that, you know, with there's so much more to learn, right? I mean, that's why I love listening to your conversations, because everybody you bring on, I learn something more and sometimes I think my head's going to explode.

01;26;08;12 - 01;26;33;18

Michael Matherly

But the reality is a lot of it's just common sense and people sharing their experiences and their anecdotes and saying yeah, that kind of makes sense. I get that and it's like we just don't have enough of that. And I think that's why a lot of our service procurement industry hasn't matured or risen to the level maybe that we have on the staffing side, because not enough people are talking about it.

01;26;33;20 - 01;26;52;02

Jonny Dunning

Well, we'll get there. Hopefully this is just one extra little kind of, you know, one extra little drop in the ocean helping towards that. But yeah, listen, thank you so much. Really, really enjoyed that chat. And yeah, hopefully we can catch up again soon. And I definitely think there'll be more to come on this conversation. So thanks a lot.

01;26;52;05 - 01;26;54;16

Michael Matherly

Absolutely. Thank you, John. And have a great day.