Making Services Procurement Work Holistically
A holistic approach to services procurement looks beyond individual transactions to how work, data and accountability connect across the organisation. Having a broader view is critical for managing complexity, risk and value in services spend.
With Patti Vora, Strategic Sourcing Executive Management, TD
01:40 - The journey through Sourcing to Contingent & Services Procurement
20:16 - Focusing on the PO doesn't give the full picture
37:32 - Why organisations struggle to get value from professional services
55:20 - The essential nature of control in services procurement
01:03:47 - Data and supplier performance - the keys to strategy
Episode Highlights
Transcript
Auto-generated. Please excuse any minor errors.
00;00;00;21 - 00;00;29;12
Jonny Dunning
Okay. So today I am delighted to welcome Patti Vora to the podcast. Patti, you are an indirect and professional services procurement expert, and we've got some, fun topics to talk about today around, particularly the procurement of services. Which is I know an area where you've got loads of experience and expertise. So really looking forward to digging into that, on some of these topics that you and I quite passionate about.
00;00;29;14 - 00;00;37;16
Jonny Dunning
Before we do, I first like to welcome you and say thank you very much for joining me. So I really do appreciate you taking the time.
00;00;37;19 - 00;00;41;14
Patti Vora
Thank you for having me. I appreciate, you having me here.
00;00;41;17 - 00;00;59;24
Jonny Dunning
Excellent stuff. But secondly, just to give people a bit of background on you, your journey into and through procurement, would you be able to kind of, like, talk me through, how you got into this space, how it all started and what sort of journey you've been through so far?
00;00;59;27 - 00;01;26;25
Patti Vora
Sure. I'd be happy to. So, interestingly enough, you know, when I, when I, I went to U of T, and my degree was in labor management and sociology, which is, you know, and I really, really, honed in on the labor management that was that was very interesting. To me, the sociology, not so much, but, definitely more on the business side of it.
00;01;26;27 - 00;01;57;12
Patti Vora
When I, after I graduated, I actually, worked for an insurance company for five years. I, was doing insurance operations, and one thing I knew is that I didn't want to stay in insurance operations. I ended up, luckily, getting a job in corporate services, at a large Canadian insurance company. And, as part of the corporate services, I owned the internal, sourcing for corporate function.
00;01;57;12 - 00;02;26;12
Patti Vora
So I owned travel. I owned, records management, you know, print paper, facility, like the food services facility services. And, you know, so, so that organization had just gone public a couple of years ago, and, the market actually kind of crashed a little bit. And their, their, their, their, their stock decreased. And so one of the things that I had, asked for is to go to this conference.
00;02;26;13 - 00;02;50;25
Patti Vora
I went to this conference and there's a professional service consulting company, ironically speaking at this conference, and they talked about centralization of sourcing. Right. And so, it really piqued my interest. And I, went back to work and I told my boss, I'm like, you know, we don't have this. We need to do this here, to, to this organization.
00;02;50;25 - 00;03;17;28
Patti Vora
We need to centralize it. We're not making the most of it. And so we he he agreed. We, then brought on, consulting, organization, and I led the centralized the, the approval to actually have the organization centralized sourcing. So we got the approval from the senior leadership. We got funding. We implemented a PO system at the time.
00;03;18;00 - 00;03;42;15
Patti Vora
And then they were bought out. So that is my introduction to, sourcing. I then loved the space. You know, I was the travel manager, so I had implemented, you know, a whole new travel policy. You know, I got the taste of sourcing. And so, when I left there, I continued on on that journey.
00;03;42;15 - 00;04;12;01
Patti Vora
I've done a variety, of sourcing, indirect sourcing. Categories. I've been in different industry, so I've been insurance, banking, beer, telecom, facility services. I've done a variety of, industries, and I've worked on numerous categories and a lot of, professional services and not what you call traditional professional services, but facility services, marketing, you know, marketing.
00;04;12;04 - 00;04;41;15
Patti Vora
They say it's an agency worker, but it's really just outsourcing. Pension services, call centers, outsourcing, core professional services, contingent labor implementation services. I've kind of done the whole myriad. And it's funny because they are managed differently, even though they're all, services. I've done different roles in sourcing as well, not just category management and, and sourcing and contract negotiations.
00;04;41;17 - 00;05;05;16
Patti Vora
I have, create a business case, like I said, with, that insurance organization, we created the business case to centralize sourcing. I've done business cases for services, procurement, systems, and, for a large, enterprise implementation for source, for source to pay. So I've kind of done all of it. Not only did I do business case, but I actually implemented them as well.
00;05;05;19 - 00;05;32;10
Patti Vora
So, you know, involved in the, in the, leading it, building the business requirements, doing the change management, the testing, so on and so forth. I've been an application owner for, an S2P tool. And from from a services perspective, I've managed some of the largest programs in Canada. My last role I was responsible for the entire external workforce for a major bank valued at about $3.5 billion.
00;05;32;10 - 00;06;04;29
Patti Vora
So just, Wow. That change. Yeah. I was responsible for strategy, governance systems and program operations. I've implemented the VMS for contingent, labor professional services and what we call zero dollar workers. I've built an internal contingent labor program from the ground up. So that was a very immature program. There was actually no programing, self-serve, to basically a program that was defined as top 1% in the world.
00;06;05;02 - 00;06;33;07
Patti Vora
And I've also, managed external, MSPs. And just to go back to the, internal program I created, this was in 2010. That was a long time ago. And at that time, I think MSPs were just starting to kind of, go get, go into fruition. And so, you know, the the fact that I actually developed an internal program was, was different.
00;06;33;10 - 00;06;52;00
Patti Vora
It was very, very challenging. You know, it, you know, for the the year that I was working on the strategy and doing implementation, it was nerve wracking, because, you know, you know, no one's done it. You don't really. And especially in Canada, that is a very immature market. There's I think more in the US.
00;06;52;03 - 00;07;29;05
Patti Vora
So there's very few people to actually, you know, talk to or, or you know, have questions for or get advice from. I was able to get some, some great advice, you know, with a small organization and, you know, I really enjoyed that experience. And, you know, we we took it, from, like I said, a non program, to, you know, we were able to develop or reduce our, cycle time by 50%.
00;07;29;08 - 00;07;58;12
Patti Vora
We, created a ton of savings. We were able to make it a profit center for the, CPO. We, did, likelihood recommend on the actual, contractors, and we got a score of 92%. So so we did a lot of, interesting things. And I think the fact that it was internal really gave us the creativity to be able to, do things that were different than what, the other organizations are doing.
00;07;58;12 - 00;08;25;20
Patti Vora
The other thing we we did was we were able to reduce the number of suppliers to four, from 250. And, we, actually allowed the suppliers to engage the business. We did not. It was the competitive process was neutral, vendor neutral. But we really, didn't have the capability or the, the, headcount to be able to manage the thousands of managers.
00;08;25;20 - 00;08;33;12
Patti Vora
So we really used the suppliers to be our arms and legs to help, improve the program.
00;08;33;15 - 00;08;50;27
Jonny Dunning
That's amazing. So, so that, that that launch program, for, Canadian Bank, of, large amount of spend. Was that all contingent workers or what was the kind of breakdown, what was the breakdown of like outsourced services versus contingent workforce?
00;08;51;00 - 00;09;16;12
Patti Vora
So, funny enough, I was the only one or the first person to actually showcase some of the numbers, right? Was not really it was not really something that was articulated, previously. So from a professional services. So from a contingent labor perspective, it was between 400, 500 to $700 million, and the rest of it was professional services.
00;09;16;14 - 00;09;30;14
Patti Vora
And it wasn't outsourced services. It was your, you know, your consulting, technology, EDM, that kind of stuff. So outsourcing stuff was outside of that scope, as was marketing as opposed to selling services.
00;09;30;17 - 00;09;52;16
Jonny Dunning
So that was basically just pure kind of, as you say, professional services and consulting. I would imagine that was primarily contracted under statement of work type agreements, where it was output based. Yeah. That's correct. Yeah. Very interesting for me. Not that surprising. The difference in size, in the sense that that's not something that I see all the time.
00;09;52;18 - 00;10;12;24
Jonny Dunning
And like you say, it's, the fact that you were the kind of the originator of some of the data around that and putting the numbers around it, you know, so many companies are still at the point where they just don't have any information, any real information on that, which definitely ties into our conversations around needing to go below that purchase order.
00;10;12;24 - 00;10;34;14
Jonny Dunning
But before we get into that, really interesting hearing your background, couple of couple of points. Couple of quick questions for you. Labor management. So in terms of what that constituted when you studied that course, the I feel like that's got a great tie in to dealing with professional services because ultimately it's getting work done, isn't it?
00;10;34;16 - 00;10;44;12
Jonny Dunning
How? Yeah. I was gonna say what was what was the kind of context of labor management within that course. And have you found that has actually ended up tying it?
00;10;44;14 - 00;11;12;24
Patti Vora
So finding that like, I think one of the things I always wanted to do was try to I never ended up in H.R. in any way, shape or form, but the course itself definitely did help. It was it was more, union management, organizational behavior, workforce management. But, you know, we did have to learn, you know, about, employment law, about and I, you know, I did a lot of I did, did take a lot of H.R. courses.
00;11;13;01 - 00;11;54;29
Patti Vora
So, some of that information definitely did help in, in the contingent Labor and Services services. And I think I think, what's interesting is, you know, there's always this, this conflict is should it be HR, should it be sourcing, should it be HR should be sourcing. And I think, and I feel like I brought because I had the background in HR and I've done sourcing, I was able to kind of bring in a unique blended, not experience, but, approach, approach thinking, to contingent labor.
00;11;55;01 - 00;12;36;25
Patti Vora
I think what happens is, you know, with contingent labor, if it's on the HR side versus the procurement side, they're very thought they're different. They have different objectives. Sourcing is is more, you know, value driven cost driven. HR is is more, skills and labor driven. And so I think the unique perspective I think I was able to bring was that, and how, it was successful is that you have to understand that when you're doing a contingent labor program, it's a combination of talent acquisition and sourcing combined.
00;12;36;28 - 00;13;08;21
Patti Vora
And, you know, that perspective, I think, helped with the balanced approach, creating that contingent labor program. You know, you don't want to drive the prices too low because it will, it will frustrate the managers because they won't be able to get the labor that they're looking for. You want to make sure it's done quickly, so that the, the, the managers, are not driven to other avenues.
00;13;08;21 - 00;13;30;28
Patti Vora
You want it, you want the quality to be there. So you want the brand recognition and people to actually, wanting to apply for contractor roles within the organization. So you're getting the better quality. You're getting the, the, or the word I'm looking for.
00;13;31;01 - 00;13;34;28
Jonny Dunning
You're talking about the kind of buy in of the people wanting to be part.
00;13;35;00 - 00;13;35;29
Patti Vora
Exactly.
00;13;36;02 - 00;14;06;17
Jonny Dunning
I mean, it's really interesting because it's it's ultimately about the organization getting work done. So I always talk about work delivery channels. You know, it could be permanent employees, it could be contractors. And temps, it could be, procured services, consulting, professional services, whatever it may be. It's still how the organization gets work done. And I just think that's so important these days in terms of how organizations can compete effectively.
00;14;06;19 - 00;14;27;10
Jonny Dunning
And if you can't control all these different channels, and if you haven't got visibility of what's actually going on, again, once you start drilling below that kind of one line on a PO that a lot of people have within their professional services spend, you know, it's it's about understanding what's the most effective way to do a particular area of work.
00;14;27;12 - 00;14;55;16
Jonny Dunning
And the organization being able to adapt to different things and flex and, you know, adapt to new, skill requirements. But just, but just actually be functioning. And if organizations haven't got visibility of that and their competitors have, they're going to lose because they just especially in today's world where it's just so fast moving, so volatile, if you can't marshal your resources, it's a pretty dangerous place to be, to be honest.
00;14;55;18 - 00;15;19;02
Patti Vora
And. Yeah, and not only that, but it's a game of whac-a-mole, you know, it really, really is. And I've seen it time and time and time again. You squeeze here, it comes up here, you squeeze here, it comes up here, and you have to have and understand the whole thing to actually be able to optimize the labor to get the work done that you need to get done.
00;15;19;02 - 00;15;28;11
Patti Vora
And that's the bottom line. And people don't necessarily understand. They don't know what they don't know. And I think that's that's part of the challenge
00;15;28;14 - 00;15;54;07
Jonny Dunning
Yeah. The whole, squeezing the balloon thing, it's definitely something that comes up a lot. And I think, you know, in terms of the problems that organizations have when we, our 2025 Services Procurement survey, rogue spend was the number one issue that people raised where it's just like something happens over here and then someone goes outside the process to do something a different way.
00;15;54;10 - 00;16;27;21
Jonny Dunning
And that's where you just get this kind of, you know, this. It goes into a kind of, you know, it disappears into a bottomless pit, as it were. But another thing that I found was quite interesting was, so the fact that you have that labor and H.R. viewpoint, as well as the sourcing and procurement viewpoint, I think, as you rightly pointed out, I think that's definitely an advantage, gives us, a kind of combined consolidated view across across all the organizations engaged in these different workforce channels, which I think is not to be underestimated.
00;16;27;23 - 00;16;51;20
Jonny Dunning
But I also think it's interesting when you were talking about that kind of first purchasing stroke procurement role, you went to the conference. They were talking about centralizing the sourcing. You went back to your boss and said, hey, why don't we do this? That firstly, that shows that you were demonstrating initiative in, being creative in what you were doing, which is something that I see within, within procurement executives quite a lot.
00;16;51;20 - 00;17;13;04
Jonny Dunning
I think that's a very key thing. People need to be like curious and, you know, willing to make changes and things like that. But the other thing that illustrates to me is that's not that long ago. It just illustrates that procurement is actually quite a young function in some ways within a lot of organizations. It's not like the finance function or even marketing and things like that.
00;17;13;04 - 00;17;23;05
Jonny Dunning
So it's it's always something that is highlighted to me that actually procurement is still really evolving in in service businesses.
00;17;23;08 - 00;17;54;16
Patti Vora
It really is. And you know, I've been hearing for 20 years, you know, value of procurement, value of procurement. We need to show the value of procurement. And you know, it's it hasn't it hasn't we haven't moved the dial as much as I think we, we should have. And I don't I'm not sure why I think an organizations that are more manufacturing based, sourcing is critical because it is part of the supply chain conversation.
00;17;54;18 - 00;18;22;25
Patti Vora
But in organizations, that are more service providers, it, it is it is challenging. It has been a challenge. It's, you know, procurement is not just about creating value. And, you know, the right contract and all that. All the other good stuff that, that procurement is, it's also sales. So it's a continuing continuation of selling, the importance of sourcing to organizations.
00;18;22;27 - 00;18;55;17
Jonny Dunning
Yeah. You make a great point about the difference between manufacturing organizations and more, the kind of service that giant part of the world, which is the services based economy, that we're moving more and more towards. And I think coming into the sort of conversation around the fact that a lot of organizations are very heavily focused on the kind of PO process and systems related to that top level kind of source to pay, procure, to pay, part of the journey.
00;18;55;19 - 00;19;32;12
Jonny Dunning
That is, that is more suited towards the procurement of goods and materials. That's right. And a lot of the technology, I've said this before, but I do I do hold true to it the way the procurement technology has evolved. It's been along that track of manufacturing and goods and materials being the primary, problem to solve. So coming out of the kind of ERP systems, you then had to source to pay suites to procure to pay suites, you ended up with, you know, Amazon store guided buying, cataloging, all that sort of stuff, which is brilliant when you're buying a thing that you can design the thing quite easily, you can weigh it, you
00;19;32;12 - 00;20;08;01
Jonny Dunning
can measure it, you can compare cost. And there are significant supply chain complexities to be considered in that. And that's what the technology world and the world of procurement has focused a lot of its attention on solving, whereas kind of quietly in the background and then suddenly, very rapidly and quite multiple loudly services is just exploded. The in terms the amount of money that organizations spend on services and the increasing complexity and variety of the services that organizations buy, it's now, on average, 50% of what any organization spends on average globally.
00;20;08;03 - 00;20;26;11
Jonny Dunning
So it's become much, much more of a problem. But the existing set up was not really designed for that problem solving exercise because as I've said many times before, services are almost like the inverse of goods in the sense they don't have the complex supply chain. But what you're buying is really hard to define. It's really hard to measure.
00;20;26;11 - 00;20;55;13
Jonny Dunning
It's really hard to compare price. So I think it's a very valid point you make about that kind of manufacturing versus service led approach. It does play through to, the way organizations are structured and what they're measuring and as we've kind of briefly discussed before, and I'm interested to kind of get your take on it, this leads often to a bit, but maybe almost too much of a focus on just the purchase order is the be all and end all of the central point and information that people are using.
00;20;55;16 - 00;21;05;17
Jonny Dunning
What what's your what's your view on that? What what have you seen, as the kind of pitfalls and areas of, where there are issues in that approach.
00;21;05;20 - 00;21;36;21
Patti Vora
So I think a lot of organizations default to managing services to purchase orders because their ERPs. ERP systems are deeply embedded as core financial infrastructure. These systems are well-funded. They're well-governed. They're sponsored by the CFO. Whereas services platforms, VMSs are often used as secondary investments, typically sponsored by procurement. And it's harder to justify without clear consolidated data.
00;21;36;23 - 00;22;06;26
Patti Vora
I think, at a leadership level, there is an awareness of professional services that it's usually significant and has been getting more significant over the years. But there is often, a limited enterprise wide strategy for managing services holistically. Leaders, again, like I said before, don't know what they don't know. There is generally spend approval controls in the process.
00;22;06;29 - 00;22;42;27
Patti Vora
Sometimes at an enterprise level, sometimes at a business unit level, depending on how large your organization is. But it's tactical, it's project by project, business unit by business unit, rather than through, I would say, an integrated workforce or capability lens. I think that critical and, and insightful information is deep and deep in, in contract systems and in contracts, in PDFs and emails and people's, you know, saved, files.
00;22;42;29 - 00;23;23;01
Patti Vora
And, you know, it makes it very, very difficult to generate the information that is meaningful or insights to demonstrate value. Offboarding, onboarding, access management, compliance. They're all fragmented across security, H.R sourcing I.T facilities. And there's no single system of record. I think I've seen time and time again, companies lack visibility to their total workforce. Organizations that I work for have external workforce that represent between 20 to 50% of their entire workforce.
00;23;23;03 - 00;23;46;04
Patti Vora
And unfortunately. Right. It's it's it's it's insane. And, I don't believe these processes can effectively be governed by POs alone. I think a lot of organizations struggle to answer basic questions. Who is working here? How long have they been working here? What supplier are they working for? What contract are they are they are what cost? What is what?
00;23;46;04 - 00;24;19;22
Patti Vora
How much are we paying for them and what access do they have? I think the lack of visibility creates operational, financial and risk exposure. I think issues such as poor offboarding or issues that are created or poor off boarding processes, rehiring individuals terminated for cause, uncontrolled system access, untracked. Untracked, contractor costs. They go unnoticed and, they're not they're not seen.
00;24;19;25 - 00;24;49;12
Patti Vora
Interest in improvement typically rises when there's a risk event, when the volumes have ballooned significantly, or the cost leakage becomes, becomes visible. And I, I really want to underscore the risk. The risk portion here, especially these days, there's obviously financial risks and, and I'll talk about that in a second. Fraud. Fake, fake actors.
00;24;49;14 - 00;25;19;27
Patti Vora
There's also a lot of countries that are trying to penetrate, our data, our information access controls. I worked in one organization where I was able to, to demonstrate to the CEO, and this is interesting that the thousands of work reductions they made in FTE was being offset almost entirely by the growth of external workforce, and they had not so effectively they increased the total cost.
00;25;19;29 - 00;25;50;13
Patti Vora
I mean, the goal was to reduce cost despite the headcount cuts, because professional services we know can be 40 to 200% more expensive than, FTE. And that level of transparency, helped me create a business case for headcount tracking only they still, to this day, for whatever reason, have not put in the services tool. And so they're managing it through, you know, you know, different avenues, Excel spreadsheets, so on and so forth.
00;25;50;16 - 00;26;13;23
Patti Vora
But they still haven't put into place. Another organization I work for actually did put into place. I was able to showcase the risk. And now like and this is over ten years ago now they're actually able to have many meaningful conversations on their workforce. You know, in this in this particular case, obviously, there was, the transparency issue.
00;26;13;23 - 00;26;41;27
Patti Vora
I think when we when we told the CEO that his external workforce was 33% of the entire workforce, he he fell off his chair. The other thing we were able to showcases that contractors were not being effectively offboarded you know, when you have a PO, there's an incentive for the manager to onboard a resource because they need the person to work, but they don't know or forget or don't have time to offboard their contractor.
00;26;42;03 - 00;27;08;00
Patti Vora
So thousands of contractors are not not being offboarded And this, this this is a this is an issue with all or with with all organizations or many organizations. And it's a risk. H.r I think sourcing have different their operating silos and I think they have different priorities. Which I think is, is has been difficult, to build a unified enterprise workforce strategy.
00;27;08;02 - 00;27;38;15
Patti Vora
But I think without this mindset, organizations default to using POs as a transactional tool rather than, I think, managing services as a as a strategic capability, which, which it is because it is probably the largest line item, you know, employees, professional services, they're they're pretty significant. I think ultimately focusing on POs provides financial control, but not operational workforce or risk visibility.
00;27;38;22 - 00;28;00;11
Patti Vora
And without integrated systems and cross-functional alignment, organizations are not going to be able to manage at scale, and complex. And they're not able to manage at the scale and complexity required. And I think for if companies do that, they will likely be more competitive in the market.
00;28;00;13 - 00;28;29;27
Jonny Dunning
I couldn't agree more. And it's really interesting to hear you highlighting, the for a lot of organizations, services and the management of procured services is not a distinct domain. I always say it's the biggest thing in procurement that isn't a thing. It is a thing. It's becoming more and more of a thing. But especially when traditionally procurement is always been broken down either by direct versus indirect.
00;28;29;29 - 00;28;55;00
Jonny Dunning
Which you know, it still has its relevance. It has relevance to finance and the way the business operates. But it can be I feel a bit misleading in the sense that if you've got a a global building consulting firm, I mean the direct spend is all services. It's, you know, outsource, you know, architectural consultancy or building services consultancy, what I mean, and that and that indirect spend is goods not for resale.
00;28;55;07 - 00;29;20;28
Jonny Dunning
So whereas if it's a manufacturing company, then primarily the direct spend is going to be goods, materials potentially. And then but in all organizations the services are increasing. So you can't just kind of go via that purely an indirect manner anymore. And then you've got a category strategy where you'll have multiple categories like you say marketing, legal, professional services, consulting, I.T services where the same problems exist.
00;29;21;01 - 00;29;51;08
Jonny Dunning
But then kind of got a different flavor. They'll probably be contracted in a similar way, an output based kind of statement of work style, contracts statement, work scope, work work order, task order, whatever people want to kind of call them is a similar type of contracting vehicle. But there's more and more recognition of services as a distinct domain now, which ties into the fact that you can see why there's more demand for specific tools to manage services in a recognition of need for that, because it's a really complicated area.
00;29;51;08 - 00;30;20;23
Jonny Dunning
It's got very specific requirements. It's not like buying goods, it's not like buying people and it's just massive. So I think it's really interesting to hear you talk about how that, has become highlighted. And also the, the, the fact that, you know, when people do dig into this, I've heard the story time and time again, somebody in the executive team says, how many people have we got a new who are the how many workers we got in working in the business?
00;30;20;23 - 00;30;38;22
Jonny Dunning
They're always shocked. But it's kind of and it shows the risk and it shows the need for control, but it also shows the need to manage those supply relationships well, because clearly that is an important part of how your business is operating. And I think I feel like sometimes organizations might miss that.
00;30;38;24 - 00;31;04;07
Patti Vora
I 100% agree. But I think because. SOWs are managed, you know, SOW by SOW, right? It's not managed holistically. It's we have a project. We need to do this, so let's do this. We have this need. So let's do this. We don't look at it holistically. We look at it individually. And I think I think that's that's the biggest challenge.
00;31;04;09 - 00;31;23;15
Patti Vora
You know, if you have the data consolidated, then you can see, you know, what in for me what you can see the information, of, of the resources you need. And then you can you can plan for it. You can strategize on it. You know, if, if you have, you know, 20 different IT teams all hiring develop developers.
00;31;23;17 - 00;31;56;03
Patti Vora
Do we need 20 different teams. Do we need different developers or can we consolidate. It's information like that that if you can actually you get your hands on it, you can actually create strategies on what the best, outcome is or sorry, the best way to manage, these resources, and when it's done SOW by SOW, it's very, very difficult because it's, it's, it's, it's individualistic by, line of business as opposed to looking at it from an enterprise lens, which, you know, you do.
00;31;56;03 - 00;32;23;05
Patti Vora
As for employees, but you don't necessarily do for services. And, you know, and another interesting thing is, is if, for example, your external workforce is 33% of your entire workforce, how many people do you have managing the 66% and how many people do you act? How many people do you have managing the 33%, and do they have the skills to be able to do it?
00;32;23;08 - 00;32;31;16
Patti Vora
You know, I think that's a that's a really important question. I don't think I don't think a lot of organizations understand that and have that focus.
00;32;31;19 - 00;32;58;22
Jonny Dunning
Yeah. And again, I think it comes back to, what you were saying about the C-suite understanding this, understanding the risk, understanding the cost, but also, you know, stay on on their mission to achieve their strategic objectives as an organization. It's like, what's their what's their capacity and capability to do the work they need to do to create the products or services that they sell to their customers?
00;32;58;24 - 00;33;24;06
Jonny Dunning
Well, they need to know how to harness that. And I think, you know, it drives towards that risk versus cost argument as well, in the sense that quite a lot of the time people just look at cost. But but I would agree with you in, in the, the importance on the risk side of it as well. And particularly around that competitive being able to be competitive, that's what C-suite does need to understand.
00;33;24;09 - 00;33;47;19
Jonny Dunning
This isn't like a vanity metric or vanity project or something. That's a waste of time. This is like, if you don't get this right, if this is 33% of your workforce capability, then you better get it right. Otherwise, because you essentially be in a bad situation. Not just not just from the point of view of compliance. Throwing money down the drain, but also when you need to get stuff done, are you going to be able to do it?
00;33;47;19 - 00;34;09;00
Jonny Dunning
And that's that's that lack of visibility just makes that extremely difficult for a lot of organizations that looks like they're not really acting strategically. Yeah. But just going back to another thing you mentioned. So so I think this is a great opportunity for this is this is all about procurement moving away from being transactional and being more strategic.
00;34;09;02 - 00;34;27;20
Jonny Dunning
And know I'm going to come on to it in a little bit. This is certainly a very very passionate about you can't really be strategic without data to back up your to back up what you're saying. You know, finance teams don't listen to you unless you've got the data to back it up. Operational teams, compliance teams. It's harder to have an argument without that data.
00;34;27;22 - 00;34;45;18
Jonny Dunning
I think with the volume of SOWs or statements of work. It's impossible for procurement teams to manage that when it's manual, but it's like Excel spreadsheets and PDFs and emails. I mean, like you just need such big teams and most procurement teams are pretty lean
00;34;45;21 - 00;35;07;19
Patti Vora
That's right. And, you know, you so much information you don't you don't have, you know, people come to me and ask me how many contractors we have. I don't know, do you know what contractors are in the statement of work? I don't know, do you know if we did background checks on these contractors? I don't know, you know, and so it's it's.
00;35;07;22 - 00;35;33;21
Patti Vora
Unless you have the technology to do it, I think it's almost impossible. Or it's going to take an army of people to actually be able to manage and hone in into this information. And, and I think it's critical, you know, like, how much rigor do organizations take to hire an employee? Do we use the same rigor to hire professional services?
00;35;33;22 - 00;35;45;18
Patti Vora
Do you as an organization know every single person and their name of who is working within your organization and what access they have?
00;35;45;21 - 00;35;59;12
Patti Vora
And, and do we know if they are bad actors or do we know if they're if they are actually legitimately, a great resource? We don't have that information.
00;35;59;14 - 00;36;21;00
Jonny Dunning
Yeah. And and when you talk about the purchase or the level of information not being sufficient, but we see all the time is that organizations will know how much they spend with suppliers or have that accounts payable information that will tally up with the purchase order information. But in terms of what was the project, what what was actually done?
00;36;21;06 - 00;36;41;04
Jonny Dunning
Did it change, you know, all these things? Was it on, was it on time? Was it to budget? How much scope creep was? Did we have settlements involved in it? That information is just just falls below the line. And sometimes it's seen as not procurements responsibility in the sense that procurement are generally targeted on like upfront savings.
00;36;41;06 - 00;37;02;16
Jonny Dunning
But that doesn't really tell the whole picture, does it? It doesn't tell the whole story in the sense of what happens post contract when you're dealing. Unlike goods, if you procure some goods, you should get what you what you originally thought you're going to get when you're procuring services. I mean, they just change along the way. don’t they, it is an inherent part of the way that services, and it doesn't necessarily mean it's a bad thing, but they need to flex.
00;37;02;16 - 00;37;30;12
Jonny Dunning
So when that information is only stored in like fixed PDFs, there might be like a scanned signed PDFs. It might have milestones in it if you're lucky. But they might not be very good ones. No, no, not one of the a good scope. And they might well have changed. So what you're what you're describing is a situation I see a lot where there's a lack of information and what information there is, is not accessible because it's not digitally captured in a, in a specific system.
00;37;30;14 - 00;37;32;14
Jonny Dunning
Exactly.
00;37;32;16 - 00;38;06;15
Patti Vora
I think, you know, organizations, struggle from getting value from professional services. And this is not carte blanche. It's if you some do, some don't. Even within even within the same organization, some do, some don't. I think, I think there's, there's six kind of key reasons, that organizations don't get value from professional service. I think a there's, there's a lack of, external or, sorry, enterprise, workforce strategy.
00;38;06;17 - 00;38;37;03
Patti Vora
You know, most organizations, like I said before, don't have a clear, enterprise wide approach on how they use professional services. Organizations don't give guiding principles, on and they leave the business to, to make their own decisions and to their own devices. So I remember and this is a very, very simple example, I work for an organization where we were outsourcing, call centers, and they had a very, very simple, guiding principles.
00;38;37;05 - 00;39;00;19
Patti Vora
We are Canadian organization. We want our customers to talk to Canadians. So we are not going to outsource our call centers offshore. Very, very simple. It's a very simple like it's a very simplistic example, but it gives it gives a guiding principle, you know, if it's strategic to the organization, we need to keep it in-house. It's things like that.
00;39;00;19 - 00;39;26;12
Patti Vora
If, if so businesses do what they know, they may know to use contingent labor. They may know to use, a specific professional service company. They may know to use offshore, but they don't think about it from what is the best way to actually get these resources? Is it internal? Is it contingent? Is it professional services is a outsourced.
00;39;26;14 - 00;40;10;14
Patti Vora
That thought process isn't necessarily always, always there. And so this leads to inconsistent choices about labor type, but supplier choices locations and commercial models I think. And this results in over buying under resourcing. And you know overall your spend is is not optimized. It can be inefficient. So I think it's really critical that business procurement HR and leadership align on clear framework, things like decision trees, things like sourcing guidelines, commercial standards to help teams make better choices and, and in even the simplest principles can can make a difference.
00;40;10;14 - 00;40;51;14
Patti Vora
And again, it's a it's an iterative process. Right. So you start and then you just as you learn you continue to build on on building that, the enterprise workforce strategy. I think the second reason is internal policies. A lot of organizations put policies in place that drive the wrong behavior. They don't do this on purpose. You know, back to my CEO example, where we let a bunch of people go and and, you know, in the Whac-a-mole effect, brought them in as professional services, so accounting policies can impact a lot of times I've seen where, contingent workers are considered headcount.
00;40;51;17 - 00;41;26;20
Patti Vora
And so when they squeeze headcount, what happens is that the resources are still needed. So, managers move to professional services, costing the company more, more money. Information is, is, you know, buried in headcount. Sorry. HeadCount information is now buried, you know, in professional services because because they don't have visibility. I think business is not, necessarily getting the optimal value because it's using the wrong vehicle to bring up resources based on, on policies.
00;41;26;23 - 00;41;59;18
Patti Vora
The other thing I would say is strong contingent strategy also drives people to, to move to professional services. And what I mean by that, and I've seen this time and time again where, users believe that the same strategies, professional services use, contingent labor, which is to squeeze the rate and the what I say is that other than offshoring, your contingent labor is the least expensive labor you're going to get other than employees.
00;41;59;21 - 00;42;24;29
Patti Vora
So if you squeeze contingent labor, it's like hiring an employee, but it's a contractor. So they're market driven rates. You're hiring individual. If someone's paying willing to pay $140 an hour across the street and you're paying $100 an hour here, where is that resource going to go? It's going to be more difficult to get that resource. You're not going to get as, as good quality and it's going to take longer.
00;42;24;29 - 00;42;49;00
Patti Vora
So it's going to frustrate managers. And so those managers are now saying this program doesn't work. I'm going to move to professional services. Then what happens is it goes to a, sourcing manager who, you know, negotiates with a professional service provider. They save some money and it looks like a win. So instead of paying $2.5 million, they're paying $2.2 million.
00;42;49;03 - 00;43;08;15
Patti Vora
But if you had gone through the contingent labor program, you'd have been paying $1 million. So it looks like you saved money, but in fact, you've actually spent 1.3 million more than you should have. Right? And people you can't see this unless you've got all the data. I think another reason is poor definition of outcomes and scope.
00;43;08;15 - 00;43;44;27
Patti Vora
So many projects begin with a clear understanding of of what? Sorry, many, many projects are teams begin without a clear understanding of what success looks like. So teams feel pressure to move quickly. They engage consultants before the problem or outcome, or even fully defined. And when objectives and scope are unclear, change orders become inevitable, and this drives cost overruns and fixed price models and can have an unlimited spend impact on time & material contracts.
00;43;45;00 - 00;44;10;05
Patti Vora
I think weak governance data and visibility is obviously another reason we've talked about this. You know, at a micro level, you know, sell, buy, sell, it can be difficult to understand how productive the supplier is, right? Are there are there poor performers? It can and if there are, it can be difficult or time consuming to get folks replaced.
00;44;10;08 - 00;44;33;01
Patti Vora
You have to. You talked to the the the supplier we want to get rid of. You need to get rid of this person. They're not performing. Okay. We'll find someone else. And now you have to get them educated and up to speed. That takes time. That impacts your project timelines. If the project is large, it's very difficult to know and understand how much time each individual is actually working on your project.
00;44;33;03 - 00;45;01;02
Patti Vora
Are they working? If you're paying a monthly fee, do you know if they're actually coming in five days a week? Do you have the data to show that, or are you just blindly approving, their timesheets? At a macro level, information about service external workers, again, like we've talked about is scattered across systems, documents, emails, files, and POs like we said, don't have that financial approval control.
00;45;01;02 - 00;45;30;14
Patti Vora
And, and there's very little operational insight. Organizations can't clearly see who is working for how long, at what cost with what access. This lacks, this lack of visibility creates financial and, leakage and operational risk. And, you know, I've seen I've seen this where individuals from a, from a supplier are allocated 100% on multiple SOWs that the same company.
00;45;30;19 - 00;45;32;26
Patti Vora
How is that even possible?
00;45;32;29 - 00;45;35;00
Jonny Dunning
they’re really, really hard workers.
00;45;35;02 - 00;46;00;13
Patti Vora
Yes, yes. And that's just one of many, many examples that that that I have seen. There, you know, number five, there is an imbalance in supplier management, negotiation power teams, business teams are not skilled in managing sophisticated service providers. They haven't been trained. They're not H.R. They haven't been trained. They're just trying to get work done.
00;46;00;15 - 00;46;28;04
Patti Vora
They like you're into negotiation, contract management and performance oversight. So some are really good. But I've also seen some that are very, very poor there. And I've actually seen where the business is scared to negotiate with the supplier. They, they're afraid of losing that supplier, that they built this trust and they're, they, they have this, this fear of losing them, which generally never happens.
00;46;28;07 - 00;46;53;06
Patti Vora
Another I would say dynamic is, is relationship buying, driven buying consultants build strong personal relationships with executives. They build a level of trust, and position themselves as the expert. And they may very well be, but there may be better suppliers out there. And this, and I've seen it time and time again leads to single sourcing, reduced competition over time.
00;46;53;08 - 00;47;24;00
Patti Vora
Cost more money and reduces accountability. The, the last one I would say is, is misaligned incentives and overreliance on external advice. So, I think it's prudent to be aware that there could be a conflict of interests. I, you know, former consultants have spoken openly about how, professional service providers, internal revenue targets, partner incentives and software alliances can influence recommendations.
00;47;24;02 - 00;47;29;14
Patti Vora
You're asking for a vendor neutral recommendation, but.
00;47;29;17 - 00;47;56;26
Patti Vora
Is it right? Sometimes advice isn't purely about what's best for the client. If, for example, a consulting firm is aligned to a specific software provider, they have a partnership with, an organization that they are certified to implement. When you ask them what the best solution is, you know, you have either, the outcome is already influenced by that relationship.
00;47;56;28 - 00;48;20;23
Patti Vora
And like I said, you know, consulting firms operate under internal revenue targets, partner incentives and vendor alliances. And this can absolutely create conflicts of interest in the recommendations provided by, the service providers. And at the same time, leaders place a lot of trust in these external consultants, sometimes more than the internal experts and, you know, internal experts.
00;48;20;25 - 00;48;53;09
Patti Vora
Typically what I've seen and, and, and, you know, I've had the same situation myself where we have deeper institutional knowledge you have skin in the game, but our insights can be overshadowed. I think when you combine unclear strategy, weak governance, poor visibility, limited negotiation capability and misaligned incentives, it's very difficult to extract consistent value. It's always going to be difficult, isn't there's no question.
00;48;53;09 - 00;49;16;24
Patti Vora
It's very complex. But I think if you start building that strategy and putting the technology in place, to help you build that strategy, then, you know, you can, bring the skills and best. Yeah, you know, you can do better. And I think, you know, I don't want to.
00;49;16;26 - 00;49;21;02
Patti Vora
Professional service providers can be powerful.
00;49;21;05 - 00;49;44;03
Patti Vora
They can bring skills and best practices your company does not have. It can help with critical projects. It can bring in arms and legs that you need to help with a project. They can help with strategy, but it's only anchored in strong leadership alignment, clear objectives, discipline management and having a strategy and having the data.
00;49;44;05 - 00;50;28;16
Jonny Dunning
Super interesting. When you're talking about, the kind of misaligned objectives and that kind of internal capability and internal insights versus external insights, I always find it fascinating that procurement is such an interesting junction point with these relationships, the kind of the fulcrum of the relationship, if it's, you know, they should be, and just the visibility of data and insights that procurement can have if this is done properly, which as you describe a lot of organizations, it's not then then procurement become very powerful and very important, very useful because they have the data which suppliers are performing as we want them to.
00;50;28;23 - 00;50;50;02
Jonny Dunning
What's the what are the quantitative metrics on that? You know, if you're capturing in a services procurement system and understanding, you know, how suppliers are performing milestone to milestone, project to project, are they on time and on budget? How many times that change of scope, what's the average cost over on all these all these things? You can use this amazing quantitative information to start making judgments on their performance.
00;50;50;02 - 00;51;15;26
Jonny Dunning
But then if you're taking the qualitative side of it as well, did they do a good job? Was the satisfaction with the internal teams all these things really add up to to super meaningful information. But also so procurement and looking at the performance of both the external service providers, but also procurement, looking at how well the internal teams are working with the external service providers in a sense that a project might go off course or cost a load.
00;51;15;27 - 00;51;42;15
Jonny Dunning
More money would take too much time because actually the internal stakeholders messed it up and actually they were ineffective and they didn't turn up to meetings or they didn't provide the right information or they scoped it poorly. So procurement in the right situation, if you have the right processes and technology in place to capture this information, you know, in a scalable manner where you've then got some strategic procurement, a strategic procurement team overseeing all understanding it.
00;51;42;18 - 00;52;06;28
Jonny Dunning
You've got some amazing information then on how the how you think the organization is performing, how you think the supplier is performing, how the organization thinks the supplier performing, and how the supplier thinks the organization is performing. So this is an incredibly powerful, set of information aligned to a large amount of spend on an important percentage of the the work capacity of the organization.
00;52;06;28 - 00;52;28;06
Jonny Dunning
So when you talk about kind of the, the reasons to do it, the benefits, the potential benefits are absolutely massive, both in terms of the from a financial perspective and and from a strategic perspective, really, it it makes it always amazes me when you look at it like that, how many organizations overlook it?
00;52;28;08 - 00;52;59;29
Patti Vora
Yeah. And I think I think it goes back to, you know, the business knows what they're doing. They they know what they need. And let's let them do what they need it. I do not like that. It's scary. But I think, It goes back to I think, letting organization business units do what they think they need, when, when they need it.
00;53;00;05 - 00;53;46;17
Patti Vora
And, you can't look at it that way. Especially when, your external workforce is comprised of, you know, a significant number of bodies. You know, I've, I've worked in organizations where we have 5000. I've worked in organizations where they have 25,000 external workers. And that's that's a lot of of, individuals and organizations to manage. And if you're not managing it well, or at least are not understanding what it is or how much it is, or, you know, how they're how they're doing, how can you be effective?
00;53;46;19 - 00;54;07;00
Jonny Dunning
Question for a what would you say if you if you think about the financial services industry in Canada, for example, there are always going to be thresholds on what people can buy. You know, how much they can spend on certain things. Contingent labor is usually quite heavily buttoned down and permanent hiring because they're tied to headcount, as you say, sometimes.
00;54;07;00 - 00;54;32;10
Jonny Dunning
Sometimes both, can be tied to headcount, but if you squeeze up anything that goes into professional services, I mean, I've seen some pretty big limits on, like, anything, anything below this spend, you can kind of just get on with it. What would you say is what would you say is from what you've seen is kind of a typical kind of spend limit ranges that you say.
00;54;32;13 - 00;54;57;21
Patti Vora
It's not high. Sorry. It's not high. It's fairly low. But what happens? And I think I have found in the financial industry the way they manage their budgets and capital, capital reporting and operational, budgets, is very gray, run, you know, other organizations. I know what my budget is. I know how much I can spend.
00;54;57;26 - 00;55;15;10
Patti Vora
If I need capital money, I get approval for it, and I am responsible for managing it. Financial organizations, do it differently. And it's it's it's very gray. In, in terms of of how it's managed, but,
00;55;15;12 - 00;55;17;07
Patti Vora
I don't even know how to answer that question.
00;55;17;09 - 00;55;45;19
Jonny Dunning
That means that the reason, the reason I mention it is because I've, I've seen a lot of, I've seen a lot of organizations where that might be say, you know, $100,000. Yeah, $250,000. I was having a conversation the other day. And large global organization, interestingly, was it was a financial institution. There was half $1 million where it was kind of like self self signatory, almost of like, just go ahead and do it.
00;55;45;22 - 00;56;04;15
Jonny Dunning
And the strategic stuff were getting on top of above that. But but that's you know, it's like for example, it's $250,000. That's, that's, that's quite a lot of money. And it's amazing how often the in those sort of scenarios, the professional services engagements tend to come in just below that level each time.
00;56;04;18 - 00;56;26;06
Patti Vora
Yes. Yes, definitely. The games are there. Right. And they get you know, if, if I have a limit of $250,000, you know, is it coming in at $249,000 and, you know, $249,000, and that I do change orders. So, so, so that that that exists in every organization.
00;56;26;09 - 00;56;45;15
Patti Vora
Yes, I would say than for, from, from a dollar spend than that threshold probably is is accurate quarter million dollars to a half million dollars. But it's also, it depends on if it's a centralized funding.
00;56;45;15 - 00;57;08;19
Patti Vora
So organized finance organizations generally have a federated model. So really at the end of the day it's up to the leadership of that, business unit to make the decision, on where and when and how much they're going to spend and, and how they're going to do it. So because of this federated model, there are different strategies within, within each organization.
00;57;08;22 - 00;57;52;20
Patti Vora
Now, everything generally does have to come to sourcing. Because of the risk issues. So every contract does have to be risk assessed. But ones with lower values, they're trying to actually speed up the process, whereas one with higher volume, higher dollars. Do you have to go through, more rigorous process? So, financial organizations or not, every financial organization, but a financial organizations, it doesn't matter what the value of the, the, the statement of work is, it has to go through the risk process because even a $10.
00;57;52;22 - 00;58;15;10
Patti Vora
The amount of work can have a lot of risk associated to it. But a lot of it is single sourced. So when it comes in, it's just really what can we do to negotiate it now? We do have programs in place for which, you know, suppliers are part of the program, and we do, we do.
00;58;15;14 - 00;58;35;27
Patti Vora
We did try to encourage that. And we did have a lot of success in that. But it's still single source. So you know, you could extract value by actually getting quotes by, you know, going to RFPs. But if it's a federated model, the leadership of that organization ultimately makes a decision.
00;58;35;29 - 00;58;57;20
Jonny Dunning
Yeah. And it's and it's interesting when you talk about the, the relationships, the the buyers and maybe particular federated business units might have with suppliers and the heads of those business units or, or the, you know, the lead buyers, it's in the professional services firms interests to build those relationships, to then make sure they're getting work that isn't getting bid out.
00;58;57;20 - 00;59;00;14
Jonny Dunning
It's just getting given to them directly. And.
00;59;00;17 - 00;59;47;24
Patti Vora
I think it's changing, but it takes time, right, to move the Titanic. So I think, you know, the, the, the scrutiny on professional services has definitely intensified with the, the dollar spend, the risks associated with it. And there's definitely more scrutiny. And, you know, I know that, you know, when, you know, I did an RFP for, for some of this work, and we actually did a roadshow to all the key senior leaders to ensure that they were in line with the negotiation strategy that we put in place so that when the professional service providers did, come to them, because we were doing those negotiations, we all had the same
00;59;47;24 - 01;00;02;06
Patti Vora
voice. We had a unified voice. Back to the professional service providers know this is what we want to do, and we do need to drive, the best, cost for the organization. So it is changing. It has changed. And I don't know if you want, you know,
01;00;02;09 - 01;00;23;06
Jonny Dunning
it's such, it's such an important to spend that ultimately where these relationships are, that's where procurement can be extremely valuable, because it's hard to negotiate with your friend, your your friend, the supplier. And but the people that are buying within the business should be making choices that are the most effective choice for the business, which again, comes down to process and technology.
01;00;23;08 - 01;00;35;20
Jonny Dunning
If you can centralize all this sort of stuff and encourage people to go through a competitive process, even just the fact that their favorite supplier knows they're in a competitive process, they're going to get better value out of it 100%.
01;00;35;21 - 01;00;42;17
Patti Vora
You know, we were we were able to drive, I think, between 15 and 30% out of our costs. Significant. So it.
01;00;42;17 - 01;00;43;12
Jonny Dunning
Doesn't surprise me.
01;00;43;17 - 01;01;15;10
Patti Vora
Yeah, there's definitely value there. And, you know, there have been times where I work for organizations where we've actually exited a key supplier, a critical supplier or a top, you know, a top name brand supplier, because, the, issues we've had with those organizations. So it's difficult and you do have to get buy in, because it's very easy for them to come back in if they have those relationships.
01;01;15;10 - 01;01;17;01
Patti Vora
So you do have to get the buy in.
01;01;17;03 - 01;01;46;02
Jonny Dunning
Yeah. Like you say, you've got to have the data because when you when you talk about like managing these suppliers, if you've got weak data, lack of governance, lack of visibility, then you you're only going to you and your team are only going to find out something's gone wrong after the fact, and then it's too late. If you're if you're getting an idea of if you've got if you're tracking milestones, deliverables, whatever those outputs might be, that could be project deliverables.
01;01;46;02 - 01;02;08;12
Jonny Dunning
They could be sprints in in it, agile delivery. They could be KPIs, they could be blocks of consulting time, whatever, whatever those are. If you're monitoring those in real time and procurement, this is where systems can deliver self-service. So the buyer and the supplier to self serving I've completed milestone three buyers says yes you have completed milestone three procurement.
01;02;08;12 - 01;02;28;04
Jonny Dunning
Then have information that says oh most then three has been done. It's on time right. No red flags but also has information in real time to say, hang on a minute, this milestone is now running late. We've got a cost overrun here. Rather than just waiting for a QBR or wait to to try and do some sort of postmortem way after the fact when everyone's forgotten what happened.
01;02;28;07 - 01;02;51;15
Jonny Dunning
If you call that real time information, then you can get on top of those poor performance and either improve their performance or actually just really understand where you have a problem. Whereas I think for a lot of organizations, if it's a CFO came to the CPO and said, how much work? What do we do with consultancy A last year, then they'd be very easy to say, we spent this much with them.
01;02;51;22 - 01;03;07;09
Jonny Dunning
But then if it was like, what projects did they do a good job? How many times they have cost overruns? I mean, you'd literally a lot of organizations, people would literally be sifting through almost like paper SOWs trying to look back at what I was. It's just impossible to do it.
01;03;07;09 - 01;03;24;07
Patti Vora
So that you have your SOW and then you have your change order one, which you also have to read in your change order two which you also have to read, change order 3, change order 4 because they're not continuous, right. You actually have to understand what the change is. And it's not in one document, it's in multiple documents.
01;03;24;09 - 01;03;43;19
Jonny Dunning
And one of the things you've said to me in the past is that when it comes to change orders, professional services firms, I think the phrase you used was magicians. Yes. But because because that's the thing, isn't it? People look at it and go consultancy B has quoted us a lower day rate than consultancy A. Yeah, but guess what?
01;03;43;21 - 01;03;46;15
Jonny Dunning
They're going to have change orders and they're going to take twice as long.
01;03;46;17 - 01;04;12;16
Patti Vora
Yeah exactly. I think I think there's several ways to, optimize the workforce. Right. So one is build build workforce transparency. Right. And this is what a system will do. And when you were able to when you're able to do that, you can map internal teams to external resources. To understand dependency level, you can identify where external workers are filling long term roles.
01;04;12;19 - 01;04;46;02
Patti Vora
And that could potentially be internal. It could be potentially offshored. It could be potentially, automated. Right. So so you're able to see this data, I think you should standardize roles, rates and commercial model so you can analyze and analyze the information and actually compare apples to apples. You can identify where you consistencies, similar skills locations, and standardize the, the, the preferred commercial model for different types of work optimize make versus buy decisions.
01;04;46;02 - 01;05;23;24
Patti Vora
Right. You compare the external costs to internal capabilities and hiring costs. You identify recurring services or tactical services. Like I said before, they can be cheaper if you ensure that I'm sure them sorry, enforce them off shore. Them, automate them, potentially even use AI. You can highlight areas for specialized expertise where you will really get value add, and it helps shift reacting buy reactive buying, to strategic workforce planning, strengthen demand management, project governance.
01;05;23;24 - 01;05;53;29
Patti Vora
Right. Help mature the organization, educate them on on all the different options and what the best where that how to manage and commercially best execute an agreement improve supplier performance and portfolio management, you know, combined cost delivery, delivery timeline satisfaction data to score your suppliers. Right now, it's very difficult to actually know how a supplier performed on a SOW
01;05;54;02 - 01;06;16;04
Patti Vora
And then not just on the SOW but what about the resources that were associated them? How had they been? Have they been rated? How do you get the information? And when you get that information, you can basically exit suppliers are not performing well and, and give more business to suppliers that are performing well and create strategic relationships.
01;06;16;06 - 01;06;47;12
Patti Vora
You can leverage location, currency and timing for cost optimization, analyze where the work is being delivered versus where it could be delivered. Identify opportunities, nearshore offshore hybrid models. Again manage currency. You can hedge money. That's a risk. But you can do it. It creates structural not just one time savings. You can embed workforce and services into enterprise strategy, HR, procurement, finance.
01;06;47;12 - 01;07;18;27
Patti Vora
I tend to share and review insights, create, create a steering committee, share goals. Uses data to inform workforce planning and capability development, align external workforce to use as a long term business strategy. Build this. This is build decision trees playbooks for sourcing. Educate the business and shift the organization from tactical buying to strategic management. Use satisfaction and outcomes to drive value, not just cost.
01;07;18;29 - 01;07;40;10
Patti Vora
You know, I think overall when the when the SOW data’s structured and analyzed properly becomes a strategic asset, it enables better decision and cost risk capability performance. And, you know, it moves the organization from buying services to managing this ecosystem.
01;07;40;12 - 01;08;13;05
Jonny Dunning
You, I love it. And you know what? Surely what you've just described is exactly how organizations need procurement executives to think. Because what you're ultimately driving at is how do procurement take this? Professional services, external services, external workforce problem and use it for the benefit of the of the organization? How do they see the end to the overall strategy?
01;08;13;05 - 01;08;47;10
Jonny Dunning
How does it become an essential strategic lever for the organization? Going back to what we said at the very beginning, to compete effectively in their market, if they have really strong supplier relationships, a really strong supplier ecosystem, great, efficiency in terms of how they can get from a buyer needing something to getting it to the right mode of delivery as quickly as possible without procurement being in the way, but with procurement being able to help and and ultimately, what I'm hearing from you really kind of reinforced here is data equals strategy.
01;08;47;13 - 01;08;55;24
Jonny Dunning
If you can do all that and capture the data, then you can you can really help guide the organization on what they should be doing it.
01;08;55;26 - 01;09;00;07
Patti Vora
Yeah. If you can't measure it, you can't manage it. Very simple.
01;09;00;09 - 01;09;32;02
Jonny Dunning
But I think that's a great way to summarize it. And ultimately this kind of, shift from tactical to, pardon me, my false teeth falling out there from tactical to strategic, is hugely important. And also this shift in mentality from cost to value kind of ties into that. But none of it is possible for most organizations where they're in a situation that they can see a PO and a one line description, and maybe there's a SOW or SOW in a file somewhere.
01;09;32;02 - 01;09;53;17
Jonny Dunning
But but if that's how they're operating, they're going to get left behind. If I, if I don't change it. And I think talking about this becoming a kind of, a distinct domain services procurement, and a real kind of strong discipline that requires certain skills and expertise, the right processes, the right, technology and the right data.
01;09;53;19 - 01;10;11;08
Jonny Dunning
I just think it's going to grow and grow. So I really appreciate you taking the time to have this conversation, because I just think this is something that people are eager to discuss. And if I, when I sit in, kind of round tables about this sort of thing with practitioners discussing their own situations, it's almost like procurement therapy.
01;10;11;08 - 01;10;13;05
Jonny Dunning
Sometimes when people are saying.
01;10;13;07 - 01;10;13;11
Patti Vora
If.
01;10;13;12 - 01;10;29;25
Jonny Dunning
They have that same problem and it's and it's, you know, how did you manage this? Or we've only got a small team that does that. So how did you get your head around that particular area of compliance or data or management or whatever it might be. So I think it's great, really useful for you to share these sort of insights.
01;10;29;25 - 01;11;03;14
Jonny Dunning
And this experience, you know, you've been on an amazing journey in what you've done with this so far. And it's built up this expertise. And like you were saying, when you originally were rolling out the original program and you were like, didn't have anyone to talk to about it, I think, I think that is the situation for a lot of people when it comes to services procurement, because if you look a lot of the conferences, they read the very general procurement or they'll be just very focused on contingent workforce and not so much the professional services buying, which is where I think the market is sort of developing its own voice to a certain
01;11;03;14 - 01;11;21;07
Jonny Dunning
extent. And with people like yourself coming out and talking about it and kind of being open about the challenges, the opportunities, and where where you've seen businesses do things really well and also where you've seen stuff fall down. I just think it's super useful for people. So I really appreciate you taking the time. Patti It's been a very interesting conversation.
01;11;21;10 - 01;11;22;27
Patti Vora
Thank you for having me I appreciate it.