The Journey into Services Procurement

A practical look at how clearer processes and better visibility can help reduce resistance and make services procurement easier to manage. The case study highlights the changes made to create greater consistency, control and confidence across the journey.

With David Orme, Global Head, Services Procurement, Pontoon.

14:02-23:59 - Why services demand different thinking

20:52-31:18 - The importance of data in services procurement

36:42-51:40 - Managing stakeholder resistance

55:23-01:04:45 - The key drivers for better managing services procurement

01:02:46-01:11:26 - Services procurement wins at Cox

Episode Highlights

Transcript

Auto-generated. Please excuse any minor errors.

00;00;00;00 - 00;00;24;19

Jonny Dunning

Right. So I'd like to welcome David Orme to the podcast today. David, you are the global head of services procurement at Pontoon. And before you came into this kind of MSP you know, workforce management type role where you're helping other organizations manage their services procurement spend. You had some serious adventures in this world on the client side yourself.

00;00;24;22 - 00;00;39;01

Jonny Dunning

And I'm really pleased to chat to you today, and hopefully we can go into some of that background, and look at how you became one of those people who can talk the talk, but is also walk the walk in this area. So thank you very much for joining me. How are you doing?

00;00;39;03 - 00;00;42;11

David Orme

I'm doing well, Jonny. Thank you for having me. Excited to be here.

00;00;42;13 - 00;01;06;11

Jonny Dunning

Excellent stuff. So. So if we wind the clock back, what I'd really like to do is just start off by looking at how you got into procurement in the first place. I know you've got consulting, in the in the background somewhere early on in your career, would you just be able to give a little bit of an introduction as to kind of how you got into this world, and your journey through procurement?

00;01;06;11 - 00;01;15;22

Jonny Dunning

And then we can come on to, the stuff you've done specifically around services procurement. But I'm, I'm interested to know, really, the story of how it all got started.

00;01;15;24 - 00;01;38;21

David Orme

Sure, sure. So coming out of undergrad, I had done business economics also had an interest in languages. So I did a double major in German and business economics. I'm coming out. I actually started working for a small, debt purchasing firm. a financial services company where I did do their vendor management. They didn't have a formal procurement group.

00;01;38;24 - 00;02;05;02

David Orme

So everything really sat under finance, and I and I did a vendor management of their attorney network. And then also their outsource collection agencies. So started off with a few years there, really doing a lot of the analytics, supporting a lot of the sourcing decisions. Actually started into the vendor selection piece on in my latter part of my career there with the collection agencies getting a little bit closer to

00;02;05;02 - 00;02;27;26

David Orme

managing them sourcing didn't do a lot of the negotiation at that point, it was really kind of getting my feet wet in that area of, procurement. Right. Kind of at the end of that stint, I decided I wanted to go back to get my MBA. I went to Georgia Tech, got my MBA there for the focus and operations and finance under the full time program.

00;02;27;26 - 00;02;53;14

David Orme

Coming out of that program, I took a role with InfoSys consulting. Started there as was one of their, consultants working up to be a principal. Before I left, was in the oil and gas industry, you know, managing large scale, you know, technology implementations, migrations of data. A little bit of PMO work, switched over my last two and a half, three years.

00;02;53;16 - 00;03;34;21

David Orme

into the life sciences industry doing a lot of, the management of website content, build, digital delivery, email marketing campaigns. Yeah. So we have typical to emphasis consulting. We have a large offshore delivery model. So I was the onsite, let's call it, PM, for lack of a better word, that would really take the take the requirements coming from the business, stakeholders, as well as the creative agencies translate those to really the contract of, you know, this is how we would build that, that website.

00;03;34;24 - 00;04;07;13

David Orme

You also or that email campaign or the CRM on the back end that needed to collect data. And then just through the entire lifecycle of the build of that campaign, the testing, the go live, the hyper care post, and then updates beyond. So I did that, for a few years, at emphasis, actually, my first son was born while I was there, really decided, you know, I don't want to travel every, every week any longer.

00;04;07;16 - 00;04;26;29

David Orme

I don't want to go multiple times at this point now, because now I'm starting to sell business and work. You know, on the some of the client side, so started looking for roles. I liked what I had done, [unclear] was the name of the company where you're the vendor management aspect, some of the sourcing, the vendor selection.

00;04;26;29 - 00;04;57;19

David Orme

So I started looking for more procurement related roles. Came back to, Assurant. I started there, as a category manager, worked at Assurant for a few years, really enjoyed the role. Same thing. You manage large BPO, you know, negotiations, some financial services. Negotiations. Contracts. Really delve deeper into that category management aspect as well as as the, the sourcing side.

00;04;57;22 - 00;05;23;06

David Orme

Fast forward a few years. I took a role at Cox Automotive. They had a category manager role over there. So I moved to Cox Automotive. Very similar. For a few years we worked in the BPO space Contact center. Both the technology side and the, the outsourcing side of sort of sourcing. So, built kind of the reputation there.

00;05;23;06 - 00;05;51;16

David Orme

Then Cox consolidated, I don't know if you're aware of Cox. There's really kind of three main companies. They've got their family holding company, which is Cox Enterprises. They’ve got the cable company, which is Cox Communications, and then they have their automotive business, which is Cox Automotive. Your Cox Automotive is really kind of amalgamation of 27 and 28 different smaller companies that each have a part of the lifecycle of a car post leaving, leaving the factory.

00;05;51;18 - 00;06;07;11

David Orme

So if you think of Kelley Blue Book, AutoTrader, Manheim, those are all Cox, Cox Automotive companies, right? So yeah, a lot of people aren’t like aware. And that's like the enterprise layer around all of those companies, right?

00;06;07;12 - 00;06;11;09

Jonny Dunning

I didn't realize that Autotrader I didn't realize Autotrader were a part of that.

00;06;11;11 - 00;06;34;01

David Orme

Yeah. So they've got they've got a CRM, they've got a website development company, Dealer.com. They've got if you were scheduling, an appointment with your local dealership, it's usually powered by X time, which X time is a Cox company. So they literally have almost they touch something in the lifecycle of the car across the entire all the way to being scrapped.

00;06;34;04 - 00;07;12;17

David Orme

So it's a really cool company. But they but right at the beginning of covid they consolidated support into a supply chain COE for all of those entities, for the cable company, the motor company, as well as the family holding company. At the time, I had the opportunity to stay in sourcing, or come over into kind of the sourcing operations side, which was managing our MSP VMS, which, that was about if you take all three companies combined, was about $800 million and spend about 120 million of that was staff augmentation.

00;07;12;19 - 00;07;40;04

David Orme

And then the other seven, 650 was, services procurement. You know, the program had been in place. It started at Cox Communications in 2007. As staff aug only, you know, it was primarily staff aug I until a few years before I took over. You know, then they started seeing benefits, you know, of a centralized system.

00;07;40;06 - 00;07;58;23

David Orme

So they were able to have a pilot program with their construction business, to really kind of help with accruals, spend visibility, management of the, the segments of work that come through the system. And that's really where a lot of, their services procurement journey started. Interesting.

00;07;58;25 - 00;08;22;07

David Orme

So, yeah, it has been a lot. Right? I mean, the role it grew to, to be all of enterprise, enterprise supply chain programs. So supply risk rolled up under me, our supplier diversity program, as well as our contract lifecycle management system. So and, and in that time, you know, within that role about five years, four and a half years, we grew that program from about 800 million.

00;08;22;07 - 00;08;37;00

David Orme

in spend to about 1.6 billion in spend and the staff aug portion stayed pretty static. It was typically about 120 million in spend, all the way up to that, that 1.6 billion, about 1.5. in service procurement spend.

00;08;37;02 - 00;08;58;27

Jonny Dunning

This is this is so fantastic because this this is what I think it's so important for us to talk about this and for for you to really, share some of the details, the challenges, how you got started, where the program went to because, you know, there's not many people with that experience who've worked on a successful delivery.

00;08;58;27 - 00;09;25;11

Jonny Dunning

And I'm sure there were challenges along the way. The successful delivery of a a genuine services procurement management endeavor and the benefits that that drives to the business. You and I are both been to plenty of conferences where we've run roundtables on stuff around services procurement. And you know what it's like. There's so many people sitting around the table that are so far off starting, they don't know.

00;09;25;11 - 00;09;43;00

Jonny Dunning

It's possible. They don't know the problems that other companies have. They feel insecure about the problems of their company has, they maybe you feel they don't have the backing, then maybe think, how would I possibly get sponsorship for this? How would how would we deliver the change management? You know what? What would it actually bring to the business, how to put a business case together.

00;09;43;02 - 00;10;07;29

Jonny Dunning

And I think what I really want to try and do today is mine that knowledge in you, in in the fantastic experience you've had in delivering that massive program for Cox Communications or Cox Enterprises, sorry, just give the group name, because it's because it's quite rare. And you know what? When you when you sat in a round table, at a, an event, a lot of the time is quite a quick turnaround.

00;10;08;01 - 00;10;21;06

Jonny Dunning

And I think there's, there's value in people understanding your journey, around the services procurement transformation because, you know, it's as I say, there are challenges and it's and they're the same sorts of challenges that exists for most businesses.

00;10;21;13 - 00;10;42;20

Jonny Dunning

I think it's really interesting when you look at that and it's, you know, it's not that long ago, but, but you know, partly due to the size of the organization, but it also partly highlights something that I'm constantly fascinated by, which is that procurement is still quite a young function. You know, for a lot of organizations, it's kind of procurement is come in later, and and, okay.

00;10;42;20 - 00;11;06;04

Jonny Dunning

An organization needs to get to a certain size to make it really that relevant and impactful. But I think it's just becoming more and more impactful. I was at, at a dinner in London last night, a run by Bloor Research. And, it was basically a discussion around AI and the future of work. Super, super interesting.

00;11;06;04 - 00;11;41;20

Jonny Dunning

There were like 18 people, CIOs, CEOs, CFOs, CPOs, all sorts of different people from lots of massive companies, debating this and just discussing around the table with the Bloor Research team. And it was fascinating looking at the, the, the kind of like, the trend that shows that work is moving towards outputs and outcomes, which shifted more on the procurement than necessarily HR depending on how a company is structured, but also just looking at the use of AI itself.

00;11;41;22 - 00;12;08;05

Jonny Dunning

Was it one chap there who was a chief procurement officer and he was kind of saying, you know what, I think procurement are almost in a position to inherit a lot of value and build a lot of, importance in organizations because AI fit so beautifully into how it can bolster that procurement function. So procurement as a function, it may be slightly later to the party, but I just think it's an area that's really growing in maturity and importance.

00;12;08;07 - 00;12;26;22

Jonny Dunning

And so so from there, you went on to, category management. What sort of what sort of stuff did you start managing in terms of what sort of categories and, and, and how was that transition to the services side at Cox? How did that kind of happen in the sense that were you obviously with what you were doing on the debt side?

00;12;26;22 - 00;12;38;28

Jonny Dunning

That's all services, because it's the the debt collection agencies, the legal network, what was as it always been, services in terms of what you managed or were there kind of like goods, and materials thrown in there along your journey?

00;12;39;01 - 00;13;05;06

David Orme

No, I've done more of the services journey. I've done very little on, the direct materials. Yeah. At Cox Automotive, you know, I was very much on the kind of the technology side, the, you know, the services or like, it's the SaaS software that supported, whether it be telephony, you know, contact center build, then also the outsourcing.

00;13;05;06 - 00;13;30;14

David Orme

So if you think of companies, you know, the do the customer care like sitel, allure, a lot of those companies was really negotiating large scale agreements with those running some RFX events, to outsource a lot of our, contact center software. So, you know, negotiating with, with nice. Yeah. You know, Sutherland as well. Genesis.

00;13;30;17 - 00;13;46;16

David Orme

So it was it was a it was a mix between some of the technology support as well as the services as well, but none of the really direct. We didn't, you know, I was not ever purchasing, you know, widgets and products of, you know, when you think of when you talk about direct materials.

00;13;46;18 - 00;14;10;10

Jonny Dunning

Yeah. Interesting. It's there's it seems that, you know, certain types of people are drawn to more kind of services based categories. I feel like there's a level of complexity and, you know, for people that for people that are in procurement, some people just really like those kind of direct goods, materials based channels, it really suits them.

00;14;10;10 - 00;14;42;00

Jonny Dunning

It's kind of, you know, it's it's very much a solved problem from a technology point of view. It's very, you know, a lot of the cataloging, guided buying, all that sort of stuff, services, you know, in some in some organizations it's like literally like the Wild West. And, and generally you see people in services based categories. The procurement people are typically totally swamped by just the volume of activity that they just can't, can't get their hands around because it's it's labor intensive, it's got manual processes and it's got all those problems it you and I are so familiar with.

00;14;42;02 - 00;14;52;23

Jonny Dunning

But it but also the type of personality, of a procurement practitioner who likes the services side. It's not for everyone, is it? Because it's pretty challenging.

00;14;52;26 - 00;15;26;25

David Orme

But it's not. You're not wrong. I mean, when you think of direct materials, right? You're typically you're trying to back into what the cost is for them to build it. Right. And then, you know, what's an acceptable margin on top of that. Right. And when you get onto the services side, you know that there's a massive disparity between what the actual cost of the human capital is versus the service that they're providing or having you think of just your typical staff aug model versus your services, your statement of work model, your staff aug

00;15;26;27 - 00;15;47;02

David Orme

There's it's a much smaller margin, right? If I'm if I'm getting a technical PM, I can get that resource typically, you know, anywhere from like a 30 to 40% markup or what their actual rate is. But if I look over the services procurement side and you're talking about your Accentures or Emphasis like my company, your markup is completely different, right?

00;15;47;02 - 00;16;11;14

David Orme

And it's typically, harder to get like you've got some industry metrics, but you've you're not going to have Accenture saying, oh yeah, well we pay, you know, David Orme $150,000 a year, but we bill them a $300,000 a year for you. Right. So there's a level of expertise and I think access to knowledge as well that you're paying for when, when you're dealing with services, procurement companies.

00;16;11;16 - 00;16;30;13

David Orme

And then it even gets even more complicated and complex, right? When you think about the niche kind of companies that are really providing a service, that is not something that's, you know, very typical industry like the AI right now. Right? I mean, everybody's paying a lot for people that know AI and know it really well.

00;16;30;15 - 00;17;12;21

Jonny Dunning

Yeah, 100%. Those kind of like knowledge IP based, transactions, they're a lot harder to tie down than and and you know, you're transferring liability. It's a lot harder to tie down than just, like a staff aug type setup. And it was, it was like, so this, this event I went to last night, it was really interesting listening to Richard from Bloor Research talking about, the fact that AI could make, a person who's working five days a week be able to get the work done in three days a week, and like, what, what connotations does that have for, you know, GDP versus, you know, job, job creation, things like that.

00;17;12;21 - 00;17;37;03

Jonny Dunning

And it's like, well, you could look at it one one way or the other. You could look at it as, you need you need less of that person doing that work. Or you could look at it as that person could be more productive and actually you can get more work done. And actually where the where this moves is towards, what's the thing you're trying to do rather than just looking at work in this binary, way of just looking at is just time spent.

00;17;37;05 - 00;17;57;15

Jonny Dunning

I find that quite fascinating. But, but it but it also ties into the fact that you've got all the liability tied in, with regards to the service providers. They're providing people doing work, but they're also providing background intellectual property, and they are taking liability for the delivery of it. So it's a it's a completely different set up to that kind of Staff

00;17;57;15 - 00;18;36;03

Jonny Dunning

Aug scenario. And one of the things that strikes me about what you were saying earlier is just the relative size of within Cox of the services procurement element of how they're getting work done versus the staff aug program. I mean, you know, 120 million, annual turnover in a staff aug program is still pretty decent. But, you know, when you're getting to the point that the program's 1.6 billion per year and, you know, it's still 120 million, that is, staff augmentation, that just shows the relative size of those two components of how that organization is getting work done.

00;18;36;06 - 00;18;55;03

Jonny Dunning

It's not always going to be the exact same kind of multiplier in every company. But as you and I know, it's on average is easily six times in most cases, I'd say it's more like kind of ten times the size. I think maybe, maybe a lot of people don't actually realize that.

00;18;55;06 - 00;19;30;06

David Orme

Well, and you're not wrong, right? I mean, if you think about it, know the staff aug is the visible workforce, right? Typically. Right. Because all the managers directly managing it. So they know they've got it. They're they're insuring a laptop a lot of the times giving access when you look at your services procurement, if it's not T&M and it's outcome driven, you don't often know how many resources are actually working on that, right know or you know, if you if they don't name the roles that are going to be doing it, or the number of folks within the statement of work, you don't know if it took ten people to give you that million

00;19;30;06 - 00;19;56;26

David Orme

dollar output or if it took two. Yeah. And that's one of the things that we did at Cox is we try to put name resources in every single one of our statements of work. And just from a data collection perspective, we wanted a rate associated with that person, even though it wasn't time and material, we wanted to be able to say, okay, well, we've got five people, scrum team of five folks where they're at the scrum master's making axes.

00;19;56;26 - 00;20;17;00

David Orme

Folks are supposed to be making Y, and it depending on, on the company at Cox I did this more closely where they would tie the expected outcome to what they thought the amount should be, even though they weren't tracking the time. But they would do analysis to say, hey, are we getting the value for what we think we're paying for?

00;20;17;02 - 00;20;38;14

David Orme

Right? You know, this company, you know, let's call it you know, Tom Jones Consulting is telling us that they're paying their resources X, Y, and Z. And we're paying for, like I said, $1 million output. Do we think that we actually got the value for the million dollar output? So they would do some of that reverse engineering, try to do some of that reverse engineering, on the consulting side as well.

00;20;38;16 - 00;21;01;18

Jonny Dunning

So so that's quite interesting because what effectively you're doing there is you're using the assumed rates almost like as a proxy for comparison against a staff aug methodology. So effectively I mean ultimately that's what it comes down to isn't it. The the organization has various different ways of getting work done. They can use that permanent employees to get work done.

00;21;01;20 - 00;21;30;20

Jonny Dunning

They can use contract or temp labor or they can outsource it. So but but making comparisons across those to be able to say, what's the best way to get this work done, which you and I, you know, I know you guys are doing some cool stuff around triage at the moment. You know, it's an area that you and I are very familiar with where an organization starts with a piece of work they need to do, and then they got to work out what's the most effective way to do it, and what's the compliant route that this should be?

00;21;30;22 - 00;21;41;12

Jonny Dunning

But it's it's interesting because I think being able to make comparisons across the different workforce delivery models is almost like the holy grail, really, isn't it?

00;21;41;14 - 00;22;03;09

David Orme

It's hard, right? Because I mean, like, we were just talking about most of your services procurement. They just say, all right, I need this outcome. They don't worry about what's in, you know, kind of underneath it. You know, and, and I, and I don't disagree with you. I, we are moving more to outcome based, from a services procurement delivery.

00;22;03;12 - 00;22;23;07

David Orme

But I also feel like there's a, you know, kind of an aspect of total cost of ownership that's coming into it. Right? And if you don't, if you don't understand what the should cost of what the what those resources are doing to make that widget, you can't really say, well, I should have a full time employee doing this, or I should have a staff, someone from staff aug

00;22;23;13 - 00;22;33;17

David Orme

do this right. You can't really do that, that analysis very effectively if you don't know that I had five resources tied to this, you know, working on this deliverable.

00;22;33;20 - 00;22;52;10

Jonny Dunning

Yeah. And I think, you know, it also highlights the fact that, you know, you've got some finance in your background and you've got that analytical side to your background. And it's like, you know, it's not necessarily you say every every statement of work is going to be different. And there’s IP tied up in it. There's liability tied up in it.

00;22;52;10 - 00;23;09;24

Jonny Dunning

So it's more than just the hours that the the people in their time that they're putting into it. But why not try and put some numbers around it. Why not try and do some calculations? Because it's all just and you know, we come on to the business case side of it later. But it's it's all just part of how that business should be running the way it does work.

00;23;09;24 - 00;23;33;14

Jonny Dunning

So I think, you know, it absolutely makes sense where people have this stuff organized and they can see it. They can start to apply some logic to it to say, well, you know, if we if we if we do that this way, it's going to cost us, this is a lump sum for delivery. If we did it by staff aug we reckon it's going to take this many people this many weeks or whatever it might be, you can start making some comparisons and assumptions around it.

00;23;33;16 - 00;23;52;23

Jonny Dunning

Which is you know, it's this is the world is driven by data, but the fact that you had the data on that, you had that information and you had the the clarity and the visibility on those engagements allowed you to start playing around with the numbers on that. So I think although it's not an exact science and, you know, it is about outputs and outcomes.

00;23;52;25 - 00;24;03;07

Jonny Dunning

You know, you can definitely apply some financial logic to it to try and drill into it a bit more effectively, which, you know, for a lot of firms would be a huge leap forward for them.

00;24;03;09 - 00;24;22;21

David Orme

Well, absolutely. Right. And then even just outside of the financial aspect of it, you think about kind of the the risk aspect, right? Who has access to your buildings, who's coming in. Right. And if you don't have those resources, you're not tracking them and system, you know. Oh, we've got five visitor badges that we issue today. What to whom?

00;24;22;24 - 00;24;42;15

David Orme

Is there really an easy way to track that versus. All right, well, we know, you know, these ten resources from Accenture are working on this project through the end of the year or, you know, through June. We know those ten resources are coming and they have access. So it's broader, right? It was twofold. Right. It was getting access to the data, the types of roles.

00;24;42;15 - 00;25;01;26

David Orme

So we have more information. But then also managing the people themselves of knowing who's in our building, you know. Right. Like if you think of our well, if there's an emergency, we we've got to make sure we can get everybody out. Well who tend to they will if there is a random visitor that we aren't aware of and no contact to that, we've got to figure out no.

00;25;01;26 - 00;25;05;01

David Orme

Now that we've got, how to get those folks out and how to find them.

00;25;05;01 - 00;25;38;18

Jonny Dunning

So cyber cyber security as well, you know, such a such a huge area, the whole kind of infosec who's got access to the systems, the access to the building, etc., is massively important. And, you know, you and I both been in situations where you're listening to a very senior C-suite board member of an organization being very shocked because they they've asked somebody, chief procurement officer or, you know, head of contingent workforce or head of H.R., whoever it might be, head of talent acquisition.

00;25;38;21 - 00;25;54;17

Jonny Dunning

You know, how many people have we got badging into our business? How many people have we got on our systems who are not employees? We think it's 5000. But hang on, how come you're telling me it's 25,000? So, you know, it's it happens all the time, doesn't it?

00;25;54;19 - 00;26;33;01

David Orme

Well, it's it's kind of an invisible workforce, right. And it's I mean, I saw one stat that said roughly 60% of an organization is, you know, not full time employees. Right. Or the spent. Right. Of kind of the spend that they're doing is on third party resources that aren't your own employee. Yeah. And if you look at some of the stuff that SIA’s put out, they estimate roughly 20% of your actual workforce, 21% of your actual workforce is not a full time employee, you know, not that of that 21%, I think you and I were talking about this, 2 to 3% of that make up is really your staff aug and your

00;26;33;01 - 00;26;55;22

David Orme

IC's, your independent contractors. Right. And the rest of that is your services procurement, your workforce. And if you you know, if you're trying to track your total workforce and you're not running that services procurement through, you know, vendor management system or I mean, like typically I'll have it go through Oracle. So you'll have access or Oracle or whatever your pay system.

00;26;55;22 - 00;27;11;00

David Orme

So you have access to kind of spend data But you don't have anything granular. You don't you don't know what the actual people coming in and out of your office are or who has access to what. So it's it's a large, larger chunk than I feel like people, you know, recognize.

00;27;11;02 - 00;27;35;00

Jonny Dunning

Yeah. I feel like it's sort of, it slips through the cracks a little bit as well, because it's like a diffusion of responsibility where if you take services procurement broadly, some of it's going to be in a bit of a gray area. That kind of, you know, does it sit under H.R. Talent acquisition contingent workforce right through to, you know, big I.t outsource projects that absolutely sit under the under procurement.

00;27;35;02 - 00;27;57;10

Jonny Dunning

So what I have definitely observed in the market is that the something that's really starting to grow now is the idea that someone needs to take ownership of services procurement as a channel. And it's a big it's a super important channel that is not not visible effectively for a lot of companies. And it's not well managed for the vast majority of companies.

00;27;57;12 - 00;28;19;09

Jonny Dunning

So so the fact that within your program that Cox, that was such a big percentage of the spend that was going through it, I think just just underlines that really. So, so the just the understanding of the cost of the program at Cox. So they basically had an MSP with a vendor management system to manage the contingent worker side of it that was already up and running.

00;28;19;09 - 00;28;39;23

Jonny Dunning

You got 120 million a year going through the the staff augmentation side of it, very much a solved problem. You know, vendor management systems to manage contingent workers have been around for 20 plus years. The MSPs, you know, this is a very mature service offering around that. So they'd already started looking at the SOW side of it.

00;28;39;25 - 00;28;58;19

Jonny Dunning

And, and when you came into it, what was the kind of, level of sophistication around that services procurement? Was it something that was intentionally brought into the program, or was it something that kind of like leaked into the program because it just kind of sat in an adjacent, space?

00;28;58;21 - 00;29;20;08

David Orme

Initially it was something that it was, you know, it was a it was intentional due to the need for spend visibility. Right. And tracking accruals, you know, more more closely. Right. I think what are the issues they had, especially from it. And you'll see this across any company that's not leveraging an MSP. But everybody gets busy right.

00;29;20;08 - 00;29;42;18

David Orme

So your hiring manager is responsible for creating POs in the in the system. It's typically not done by procurement right. Like procurement typically will take the contract it depending on the maturity of your organization. They either get the contract for your business has already negotiated it. So they're kind of just checking to make sure, you know, there's nothing crazy, or they're more active partner or they do.

00;29;42;18 - 00;30;08;13

David Orme

The negotiation can help with the vendor selection if it's an RFP, but then they sign it and then often it goes straight back to that business stakeholder. Right. And then that business stakeholder has to open up a Po has to do all the extra work onboarding the resources. Open all of those requests. So there's there's a transactional element post supply chain that you, you're dependent on whoever is managing the business.

00;30;08;13 - 00;30;36;08

David Orme

And if you're if you've if you've got a guy who's managing 20 different statement of works that are coming through, you know, and he's got to approve all of these invoices that are coming across all of these, timing materials or reviewing milestones. Things get lost, right? They don't get approved on time. Right. And if you don't have a finance manager on you, your business finance kind of pushing and tracking or you don't have someone from the business up from the supplier side saying, hey, where's my money?

00;30;36;10 - 00;30;55;19

David Orme

Which happens often, right? Yeah, I mean, I it is kind of shocking how much a supplier will just be doing the work and then, you know, oh, the milestone payments don't come, but they don't find out until a year in and they're like, oh, well they owe me, you know, $500,000. They, you know, they didn't even respond they didn’t approve these invoices.

00;30;55;19 - 00;31;25;19

David Orme

So it's like yeah. So it's on both sides. Right. There's really nobody want that process. All right. And if you if you don't have a manager that's diligent it just it falls behind just and not not through any means other than they are so bogged down with work they just don't even think about it. Yeah. You know and that's that's the beauty of kind of the MSP is they've got those controls in place and the vendor management system, it sends notifications there’s reporting.

00;31;25;21 - 00;31;59;05

David Orme

You know and that's kind of how it grew at Cox is it's like, well we need to get a better handle on the, you know, the controls that don't really exist right now. And we need to move them into a place where it becomes more streamlined or centralized. And if you think from an MSP perspective, just the cost of that management is significantly cheaper than if you had to hire your own internal team or augment your finance team to, to, you know, get ten resources to just manage, you know, $1 billion in spend coming through.

00;31;59;07 - 00;32;20;10

Jonny Dunning

Yeah, I was going to say it's really interesting what you mentioned about the supplier side of it. Made me chuckle really because you know, we've seen that we've seen we've seen situations within Zivio where you've got an organization engaging with a big supply chain and some of those suppliers. There's just stuff sitting there that they just haven't billed for.

00;32;20;12 - 00;32;39;12

Jonny Dunning

They've just kind of like forgotten to bill it. And I think that's like you say, that's the beauty of capturing these things within a system. Suddenly this stuff becomes visible. Oh, that milestones overdue. Oh, that invoice hasn't been created, the milestones being completed, that need. That's an action that needs to take place. But but like you say, there's there's so much to it.

00;32;39;14 - 00;32;50;24

Jonny Dunning

And services procurement is so fluid that for a lot of organizations this stuff is just, it's just in a giant haystack of confusion. But it isn't. It, it is, it is.

00;32;50;24 - 00;33;16;16

David Orme

Right. Yeah. And if you think about it, it becomes even more complex when you start looking across, you know, the different business units, the different functions, because everybody's managing of their budgets. Right. And so it you know, that was one of the biggest challenges we had. It wasn't a mandated program. So how do you get the services procurement inside the system when you're dealing with personalities?

00;33;16;16 - 00;33;33;18

David Orme

Right. I mean, that's really what it is. At the end of the day, people don't want to lose control or perceived control, right? If they are putting it in the vendor management system. I mean, that was one of the biggest battles I feel like we had as well. I I'm not going to have access to my supplier anymore.

00;33;33;20 - 00;33;55;09

David Orme

I'm not going to, you know, I'm not going to be able to go in and have that relationship. And it's like, well, no, the MSP isn't taking that supplier relationship away from you. What they're doing is they're managing the tactical elements of that supplier relationship to make sure when the suppliers performing, you know, that they're doing the job, that they're supposed to be doing, that they're uploading their invoices, they're handling escalations.

00;33;55;11 - 00;34;29;03

David Orme

Then they're also on the flip side, making sure that you're approving in a timely manner. Right? I mean, most large organizations have either early pay discount clauses or rebate clauses, right? Where if you, you know, and they're all tied to paying your suppliers on time, right, or within that time frame. And if you don't like, if an invoice gets submitted and it goes past the net 45 or net 30, that you've negotiated, typically you can't include that invoice in the tally of your rebate year round that's coming back from that supplier.

00;34;29;05 - 00;34;48;22

David Orme

So so there's a lot of ways you can talk to your internal stakeholders to really say, look, these are these are the things we're doing. What what are your bigger concerns. Right. What are you what are you really fighting against? Right. Why why don't you want this to happen? And and honestly, sometimes it boils down to I don't want my budget to shrink.

00;34;48;24 - 00;35;15;15

David Orme

Right? Like I want to spend money on what I. What I want to. I have a budget. And there's a lot of pressure within organizations, organizations to, to spend all of your budget or, or they reduce it. Right. And that visibility that MSP and VMS brings really kind of threatens that. Right? So it says it calls into question that, well, I've got $2 million a year that I spent on my budget that we estimated for project planning.

00;35;15;17 - 00;35;25;22

David Orme

I've only spent 1.4. Well, I've got to figure out how to spend that other 600,000 before year end, or else they're going to reduce my budget to 1.5 next year.

00;35;25;25 - 00;35;53;14

Jonny Dunning

Yeah, I mean, it's that's such a kind of I feel like these days that that's it feels like an old school mentality. It's it absolutely is there other and you know, if you think about that from like the CEO's point of view, they're going to be thinking, don't spend money. You don't need to spend. Just just get this stuff done, you know, and it comes back to this whole thing of services.

00;35;53;14 - 00;36;12;20

Jonny Dunning

Procurement is about is one of the really important ways that organizations get things done. And they've got to be good at getting things done. Otherwise they're not going to be able to take their product or service to market in a in a way that is means they're competitive. And for me, it's all about that ability to compete in the market, the ability to be effective.

00;36;12;22 - 00;36;43;16

Jonny Dunning

And so I think, you know, the days of people just sort of thinking, well, I can get away with just keeping my 2 million year budget because there's no there's not enough scrutiny on it. You know, if companies can afford to waste money then good luck to them. But the market we're in now, the conditions, the speed of change, the, the efficiencies that that certainly like, you know, these up and coming businesses that are highly tech enabled, you know, that there's there's not carrying any wastage.

00;36;43;16 - 00;37;05;16

Jonny Dunning

They're not legacy. They haven't got the big legacy of some of the bigger established organizations where these practices are quite common. You know, these, these companies that don't take a forward thinking approach, they're going to get left behind. And it's but it's but it's a very important point that you raise, although I can kind of say, well, you know, the CEO is not going to like that approach.

00;37;05;23 - 00;37;27;14

Jonny Dunning

That is definitely the attitude of a lot of people in a lot of companies. And I would imagine for, for, for people that might have sat on a round table with you, are you were all at one of the contingent workforce, you know, summit events and things like that. A lot of people worry about this. So, so like you say, the stakeholders, there's going to be resistance to to coming in to a program.

00;37;27;14 - 00;37;49;12

Jonny Dunning

And if it's not mandated, which for a lot of companies like, say culturally we don't mandate stuff. That's, that's going to feel like a mountain to climb, for a lot of people. So so you're controlling the program. You can see it totally makes sense. How did you approach those interactions? How did you how did what did you how did you arrange to speak to people?

00;37;49;16 - 00;37;55;14

Jonny Dunning

How did you kind of, how did you get to the root cause of that? And how did you move it forward?

00;37;55;16 - 00;38;17;12

David Orme

Yeah. So a lot of it, it's very similar to sourcing, right. It's like kind of kind of category management in if you think about so as a sourcing category leader, I took the the view of more of the long game. Right. You need to build a relationship. Right. Because sourcing wasn't mandated at any company. I've been at it.

00;38;17;12 - 00;38;40;20

David Orme

So using sourcing wasn't mandated. So it's about building that relationship and proving your value right. So if I go into a meeting and I don't understand the business need and what they're trying to solve, I can say all day long, oh, well, you know, sourcing, you know, using using Twilio versus bandwidth is going to save you, you know, you know, $5 million.

00;38;40;20 - 00;39;05;06

David Orme

They're gonna to like, well, we don't care about $5 million. We care about the service that we're trying to provide. Will the 5 million, $5 million pay for it? Right. So you've got to really understand what is the outcome. It's not necessarily the cost savings should be an output of what you're doing. Right. It shouldn't be the reason why, you know, procurement finance, your CFO, your CPOs, they're very concerned about reducing costs, right?

00;39;05;06 - 00;39;25;29

David Orme

Especially in procurement because it's 100% save versus like on the sales side, if you sell $1 million, will you really only making about $200,000 more. Right. Or you know, however much it is? So it's really building that relationship and having that conversation and say, okay, well, what are you trying to solve? Or what does that business need and how do I enable it?

00;39;26;01 - 00;39;50;22

David Orme

Right. And are there ways to influence and, and do that? Through our category sourcing, through preferred suppliers that we already have or do we is potentially and RFx event that we need to have because you're talking about your $5 million purchase, do we necessarily want to use a legacy provider that we've been using who has okay performance but is hit or miss, right.

00;39;50;25 - 00;40;14;18

David Orme

So so that was the take I took with growing the program. You know, one is do you do your typical let me pull everything out of our financial system is see what is our discretionary spend versus non-discretionary, what's actually already being captured within the system? Where do we have large user groups that are already or potentially using the vendor management for, the MSP or the VMS for other services.

00;40;14;20 - 00;40;40;15

David Orme

So like staff augmentation, but they're not using it for services procurement. So really identifying those areas and then just reaching out, honestly I like people want to talk. They want to talk about what they're doing. They want to tell you about what they're doing. Right. So it part of is probably company culture. It's very open company culture of like, hey, you know, reach out, support, you know, learn more about each other of the company.

00;40;40;17 - 00;41;04;29

David Orme

So yeah, that's one of the things I did at Cox, is it's just like you did a roadshow on what our services are, just in general across or higher spend category areas. And those leaders, and then just started really diving into what are the problems you're solving here, what are you trying to you've got as a category across 20 suppliers, you've got $100 million in spend.

00;41;05;01 - 00;41;27;27

David Orme

You know, what is your thought process of not bringing it into the system? Right. Because from a system to a systemic purpose, we can give you the visibility. We can give you the granularity of of the spend, the people, the tracking. We take all of that transactional burden off of you, right? So you could focus on the strategic you don't have to do POs anymore, right?

00;41;27;27 - 00;41;52;17

David Orme

We're white glove MSP, VMS provider. They will come in, they will create the POs . You would just have to come in, do the final approvals. Right. So it was is really diving into the, you know, it just dissecting what is there fear on and a big portion of it was the control that I mentioned earlier. Then there was a fear the costs are going to go up.

00;41;52;20 - 00;42;16;24

David Orme

You know, that was one of the biggest fears, you know. Well, my, you know, my budget's already so lean. If we put it through the VMS, you know, they're going to charge me more. And I'm like, well, no. Oh, yeah, this is this is what our procurement team is for, right? Like, this is why our procurement, function exists, is we make sure that doesn't happen so that they're not passing any cost back to you.

00;42;16;26 - 00;42;37;28

David Orme

You know, part of the conversation is also with the suppliers of, let's say it's a new supplier that doesn't go to the VMS talking about the benefits to them as well going through, because there aren't just benefits of, you know, us as stakeholders going through. There's also supplier benefits, right? Same thing. They get paid in a timely manner and the escalations are resolved pretty much immediately.

00;42;37;28 - 00;43;01;06

David Orme

Right. Any concerns. So they don't they're not waiting on the, you know, the business stakeholder to review and approve. They've got a system in place that's ensuring that when they're invoicing timely that they're processing their invoice, are getting their time in, and then also making sure that it is flowing through that entire end to end process quickly.

00;43;01;08 - 00;43;26;13

Jonny Dunning

Yeah, it's really interesting when you talk about the kind of the fear side of it. And on the process side of it, it all comes down to, to change really, doesn't it? It's, you know, humans are wired to be wary of change. But I think you you've touched on a, a point that I've heard quite a few kind of procurement visionaries.

00;43;26;13 - 00;43;47;21

Jonny Dunning

I would I would call them people who are very kind of, you know, future focused and, progressive in the procurement function. One of the big things, as you mentioned, that many people mention, is understand the business, you know, procurement has to really understand the strategy of the business and where it's trying to go, because then you can operate as a facilitator.

00;43;47;24 - 00;44;06;03

Jonny Dunning

So you're you're then in the business saying that to the stakeholder what is it you need to do? And you know, we're talking earlier about people, being concerned about their budgets. And ultimately it's not a vanity metric. They think, you know, I need to get my work done. I need to have the money to be able to do the things I need to do.

00;44;06;05 - 00;44;35;21

Jonny Dunning

So so there was the right sort of intention is behind that concern. But actually understanding the business, understanding the stakeholder, what they need to do that is all about making the business more effective and allowing that business to compete in the market, and be successful against its competitors. So all of these things, like you say, building that relationship and having that conversation, they open up all these benefits, which initially there's resistance to.

00;44;35;23 - 00;44;54;15

Jonny Dunning

And as I say, if I if I think back to sitting on a kind of round table looking at where services procurement now and where is it going in the future, what's holding the market back? You know, these are all the things that come up, aren't they. People that people are in procurement either they don't feel empowered or they don't feel they've got the business case or the drivers.

00;44;54;17 - 00;45;21;11

Jonny Dunning

But one of the big things that they feel is holding them back is just like, how the hell am I going to get the organization to change? So, so just what was that journey like in terms of let's think back to some you don't, let's not name any names. But if you think about some of the stakeholders that were really challenged this and were really against it to start with, what what kind of brought them round, how did you how did you get them over the hurdle?

00;45;21;14 - 00;45;21;28

Jonny Dunning

Yeah.

00;45;22;01 - 00;45;50;26

David Orme

So a lot of it really it boiled down to small proof of concepts in some cases. Which were fortunate. Right? I mean, if you already have a vendor management system in place, it makes it easier to say, hey, let's run a one SOW through it, right? If you don't have something like a VMS in place or like, Zivio know, like an SPS, it, that becomes a more difficult conversation.

00;45;50;28 - 00;46;09;20

David Orme

You know, like for me, it was very much of you talking to the fear, saying, okay, your fear is lack of control of the supplier. You think the work, you know, the MSP is going to control it, not the case. And here's why. Here's what the MSP does. They don't take the actual strategic management conversations that you're having.

00;46;09;22 - 00;46;36;15

David Orme

They enable those through just the tracking of work that you're having. They're able to report on it. Here's examples leveraged existing business units. Right. So I did I had the benefit of being across three large corporate entities, right, that were all falling under Cox Enterprises. Well, similar businesses, right. Or we'll look here at Cox Communications. The tech team is using them for these services.

00;46;36;18 - 00;46;58;02

David Orme

Right. So Cox Automotive look we can very much say, you know, your fear is prices are go up. We'll look over here. Now we actually were able to, you know, run an RFP from a procurement standpoint. Prices went down right. And you could even leverage these same prices we have because we're now centralized into a COE. Or if you want to select your own suppliers, we can do a very similar thing.

00;46;58;04 - 00;47;19;15

David Orme

The, you know, the the percentage because it was a supplier funded model does not get passed back to you. Right. And here's the kind of the proof that we can show that it's already being done on this side. That was actually one of the bigger concerns is that, well, your percent fee is going to get, you know, they're just going to increase my cost by that percent.

00;47;19;17 - 00;47;46;08

David Orme

So we were able to really address that concern just with existing examples within the program. But then the second piece was a lot of it was that control or we're going to lose control of the suppliers. Yeah. And we won't have that direct relationship. And were able to say we were to show, you know, the MSP actually, from a strategic perspective, does not manage those suppliers, that your strategic suppliers are still your strategic suppliers.

00;47;46;10 - 00;48;09;10

David Orme

Like we if we wanted to build the function out for the MSP to do that, we could but that wasn't the direction we took. We took our MSP was more of an enabling function. We also had a sourcing team that we built to, to, to help on the indirect sourcing side as well. So we had a team of about 8 to 9 people that were actually doing negotiations on our behalf.

00;48;09;12 - 00;48;19;17

David Orme

But but it wasn't it wasn't the vendor management piece. Right. Like the strategic management of the vendors. It was just that tactical management.

00;48;19;19 - 00;48;47;19

Jonny Dunning

Yeah. I think, the the idea of having proof of concepts, the idea of using examples, you can't argue with the data, you can't argue with the evidence, can you? And I think, you know, you and I, I've spoken about this before, but in terms of where a lot of people, a lot of procurement people and a lot of companies where they are in the market in terms of trying to address services, procurement just feels like a mountain to climb.

00;48;47;22 - 00;49;03;03

Jonny Dunning

And one of the things that I know, certainly you and I are very keen to facilitate in the market is just to help people take that first step, to help people get things moving, because it is hard to convince the naysayers. And if you're just, you know, try to roll this out. Partly depends what the business drivers are.

00;49;03;03 - 00;49;24;02

Jonny Dunning

But, on whether it's mandated, etc. but even if it is mandated, you've still got to get people to, to, adopt the program, adopt the technology and follow the processes. But I think that's really interesting how you use the examples. And it sounds like you kind of rolled it out, almost like it was a step by step rollout.

00;49;24;02 - 00;49;25;22

Jonny Dunning

It wasn't just a blam. Here we go.

00;49;25;29 - 00;49;51;19

David Orme

Oh, absolutely. It was it was targeted. Right. We would target, you know, ones I would call the easy ones. Right. The low hanging fruit, those that were had a lot of complexity that could be simplified within a vendor management system. Finance was also I mean, we worked very closely with our ancillary supporting functions of finance as well as corporate security.

00;49;51;22 - 00;50;12;03

David Orme

So if there were large pockets where there were resources that were being untracked, you know, it becomes part of a, you know, a double header, right? It's like a risk or a risk conversations or security saying, hey, from a risk perspective, we need these people into the vendor management system. And then it comes from a finance perspective saying, hey, yeah, we need to be able to track accruals.

00;50;12;03 - 00;50;30;25

David Orme

We need to be able to, you know, make sure we're making timely payments where we need to make sure we're leveraging, rebates and discounts. And then from my side, it was the coming in and saying, look, we do all of that for you. You don't you would be doing this yourself if you were doing it, outside of the vendor management system.

00;50;30;25 - 00;50;52;04

David Orme

Right. We will be taking all of that transactional work, the onboarding, offering resources, and also providing you that visibility, that level of visibility into all of this data and information that you don't currently have. Right. Or you if you do have it, you may be tracking it in an Excel spreadsheet, right? Or somewhere you know that is not automated.

00;50;52;06 - 00;50;55;20

David Orme

It doesn't come to you easily.

00;50;55;22 - 00;51;36;15

Jonny Dunning

Yeah, I totally agree. I just going back to something else you said earlier about people worrying about to worry about the control side of it, but they also worried about costs going up. I find that quite interesting because I'd say there's a fairly good argument to say that if you if you bring a statement of work under the control and process of a system and a proper program, the visibility you're going to have over it and the, the likelihood that, you know, you're more likely to maybe take it for a competitive bid process, the supplier knows they're under proper scrutiny.

00;51;36;17 - 00;51;55;10

Jonny Dunning

You have visibility over change control. You can see the lifetime of the project. You can maybe see performance of the supplier quality, against that, alongside the kind of, quantitative metrics. But I'd say there's a pretty good argument. The costs might actually even go down.

00;51;55;12 - 00;52;19;14

David Orme

Absolutely. Absolutely. Right. I you talk about, I mean, change control reporting was something that we didn't have that we finally were able to institute my last year there. I you talk about especially with your consulting companies like you, like I said, I was one, so you keep your scopes not vague, but you keep them enough to where you're like, oh, right.

00;52;19;14 - 00;52;37;04

David Orme

Well, that's out of scope, so we need to change order it. Right. So it becomes kind of a cat and mouse game between, you know, procurement and your business honestly, because business is like, well, yeah, just do the change order. We want to get it done. Procurements like, oh no, look at the contract. They should be doing this.

00;52;37;06 - 00;52;53;28

David Orme

You know, and if procurement doesn't have the level of control and visibility into it, your business is going to win every single time, right? They're going to come back and say, well, we we need to get the work done. To your point, right? We have to have the work done. So we need to add this in. Yeah.

00;52;53;28 - 00;53;13;23

David Orme

And that's where we want as an MSP becomes an enabling function. But then procurement as well as it's like you can validate those statements that work as they come in. You can review them. You can look at them and say, oh yeah, well, you know, this is outcome based, but these deliverables don't really it's not a deliverable, right?

00;53;13;26 - 00;53;38;20

David Orme

It's not specific. It's not bound to a certain amount of time. So how would we even hold somebody accountable for this. If you as a manager didn't agree to this right. If you didn't think that this outcome was done. So you're not wrong. Like the the visibility that the manager themselves gets into the spend, you know, they don't see it until they have to pay it at year end.

00;53;38;20 - 00;54;02;04

David Orme

They're like, oh, I exceeded my budget by, you know, 50%. Well, why, I had three change orders that we didn't budget for. Well, why didn't you budget for them? It was a poor scoping up front, was it? You know, it forces you to look into all of those questions and really understand, you know, why. And if you've got something like the MSP VMS set up, you can delve into that information.

00;54;02;05 - 00;54;08;02

David Orme

You can go into that data easily, whereas it's a manual process. Right. If you don't.

00;54;08;04 - 00;54;31;23

Jonny Dunning

Yeah, I mean for any organization trying to look back through scanned, signed PDF statements of work, good luck with that. I mean, I've I've had conversations with CPOs where they've sort of said the difficult conversation came to them, where the CFO said, you know, what did we what did we do with X supplier last year? You know, did they do a good job?

00;54;31;23 - 00;54;46;08

Jonny Dunning

And it's like, well, I know how much we spent with them. It's just a pull a report. But actually, in terms of the projects and whether they did a good job, you know, were they were they on time, on budget to that cost overruns with it? Was it a good piece of work. Did it did it impact the business?

00;54;46;11 - 00;55;11;12

Jonny Dunning

You know, it's it's a it's an absolute nightmare to try. And I have to go back through that. If, as you say, it's not captured within the program and ultimately captured digitally within some sort of system where you can just line it up and and look at the data, so, so just going back to, something else that I know for a lot of people is a real big, issue around this.

00;55;11;14 - 00;55;39;14

Jonny Dunning

You might get somebody who's sitting in procurement or sitting in H.R. And talent or contingent work workforce type function, looking at their business and saying, you know, we've got our normal, kind of direct goods and materials procurements, well sorted. That's that's looking good. We've got, you know, the way that we hire people, the way that we manage contractors and temps, it's all buttoned up, but we've got these statements of work that are just a black hole for a lot of organizations.

00;55;39;17 - 00;56;02;01

Jonny Dunning

I think wrongly, there will, there will be an assumption of like, well, we've always done it like that and we've managed so far it's manual processes on Excel spreadsheets. It's all kind of not not properly tracked, but it's the way we've always done it. In terms of people trying to understand how they can, how they can get over that barrier, it comes down to the key drivers.

00;56;02;03 - 00;56;26;01

Jonny Dunning

And, you know, we've discussed this many times in terms of the different drivers, different organizations may have. But just just so people can understand how this moved in Cox you know, you can see all the benefits that they've come out with doing it. It's it's kind of a no brainer. When it comes down to it, you know, you're spending, you know, $1 billion a year on something, you know, over $1 billion a year.

00;56;26;09 - 00;56;35;24

Jonny Dunning

You want to kind of know what you're getting for it and what's happening, and you want to organized. But it sounds like one of the key drivers was actually a drive around compliance.

00;56;35;26 - 00;57;11;15

David Orme

So it, it it was. Right. So it depend and this is why I said it, it really it really goes into understanding the business. Right. And what their drivers are. We had on the Auto side, we had a large portion of our business that was failing audits, honestly, because they didn't have, you know, they they were beholden to reporting to financial services companies because of, you know, agreements we had with their agreements and they couldn't report, you know, everything that was coming in and out, like where everybody was at any given time.

00;57;11;15 - 00;57;33;20

David Orme

So a workforce issue of like who who had access to what, let's say failing on. It's like, they were scoring lower than they should have. So that was one of the kind of the areas where we partnered with corporate security saying, okay, look, this is the driver. You know, they were going to buy a $300,000 system to onboard and off board resources outside of the vendor management system.

00;57;33;23 - 00;57;58;05

David Orme

And we're like, why would you do that? We have a system already in place. We already have the mechanism in place, the payment, the approval, onboarding, reporting mechanisms. Let's just leverage the vendor management system. So it became more of a resource tracking play right, versus your traditional services procurement. You know, and for me that is an easy place to start.

00;57;58;05 - 00;58;22;12

David Orme

Right? I mean, it's like you get 1% better every day. You know, kind of that methodology. You get somebody into the system, they start tracking the resources you're tracking, you have them put in the rates. You can't really track spend, but you can track, rate, role type, everything else. And your business starts looking at that. And they're like, well, I have this visibility now into this workforce that I've never had before.

00;58;22;14 - 00;58;44;15

David Orme

What more can we do? So we were able to do it just partnering with corporate security. We were able to expand compliance as well. Like, right. There's new laws coming across, you know, just in the US as well, like that are becoming very similar to GDPR, like in California and Massachusetts, you know, just being able to track resources.

00;58;44;17 - 00;59;23;24

David Orme

So that helped drive it as well. Cost savings typically can become a driver, but it's usually the last one of the last drivers. Honestly, like the visibility, the management of the workforce. You know, how you just the management of that, the freeing up of time did, to your point, earlier than the dinner you were having a lot of the conversation is it's like you're able to free up probably 20 to 30% of a manager's time that they spend on a weekly basis managing these agreements, managing these resources, the approving, the onboarding, off boarding that now will be done in a vendor management system.

00;59;23;26 - 00;59;35;17

David Orme

You know, they they'll take care of the reporting. They take care of everything that that manager needs from a transactional basis just to manage that statement statement of work.

00;59;35;20 - 00;59;59;17

Jonny Dunning

So, so within the case of your journey at Cox, who were the key sponsors now understand obviously that the, the, the overarching kind of staff aug program is already in place. They've already started kind of scratching the surface of the statement of work services procurement side of it. But if you look behind the scenes at the senior level, who were the key, who were the key sponsors of this?

00;59;59;19 - 01;00;32;25

David Orme

So our key key sponsor originally was the CFO at Cox Communications. Right. So that was 20 years ago. You know, and then as the program evolved, procurement became the ultimate sponsor. Excuse me. So it was really it started to be driven by procurement, right. And was owned wholly by procurement. The last few years, H.R was becoming more involved from a staff augmentation side from the total talent workforce play.

01;00;32;27 - 01;01;03;21

David Orme

You know, with workday and trying to make sure all resources are tracked back up through kind of that hierarchy. So there was it became more of a partnership in that area, but that was specific to just the staff aug business. But the services procurement was always, was always a procurement, sponsor program and that it was driven in partnership by my role with my procurement leads.

01;01;03;21 - 01;01;24;26

David Orme

Right. So that so our director of procurement, my VP of procurement, and then the business. Right. I honestly was going into business, there wasn't a specific sponsor within the different business units. It was more just influence trying to bring them into the program and get advocates. Right. Get change advocates.

01;01;24;28 - 01;01;48;13

Jonny Dunning

Yeah. Very interesting. I've seen the approach before where, from a change management perspective, the people that are trying to make the change will sometimes try and tackle some of the people that are most resistant to change. Early on, was that something that was that part of the approach? Because, you know, there's always going to be the people that kind of shout loudest about, oh, this is this is not going to work.

01;01;48;13 - 01;01;49;26

Jonny Dunning

And why I don't like it.

01;01;49;28 - 01;02;16;03

David Orme

But absolutely. Yeah, it's absolutely like it's a journey, right? Like, you know, I'll tell you, there's parts of our business, the auctions that still to this day, I mean, I have put together there was one business case before me. I put together two separate business cases, you know, and there's probably.

01;02;16;06 - 01;02;38;12

David Orme

Hundreds of resources that go, thousands of resources that go through those on a daily basis. You know, and their manager, both on the staff aug side and the services procurement side, because they'll bring in, you know, temp drivers for the auctions and everything else. So it's it's a journey, right? And it's like it's one of those where you try to win by influence.

01;02;38;15 - 01;03;03;29

David Orme

You try to show by example, right? You know, you bring in other parts of the businesses to, to have that conversation, you know, and they're, they're relooking at it again right now. I mean, a lot of it depends on the sponsor that you have internally. You know, one of the easy wins that we had at Cox Enterprises was just a transfer from, Cox Communications that used our services.

01;03;04;01 - 01;03;23;20

David Orme

Moved into a new role over in the company over there. And they said, well, why why are we doing this in Smartsheet? Why are wen’t doing this in the vendor management system? So it a lot of it is that just that influence and being able to build, your credibility through what you're already doing and the good performance.

01;03;23;23 - 01;03;56;24

Jonny Dunning

Yeah. Makes complete sense. So, so if you look at, where Cox started out and where they got to, if you had to kind of define why the business was better off where it ended up and the where it started with this and what the kind of key wins were. Are there any particular metrics that you would put around that, or how would you kind of describe those key wins as, as the business capability when it was, you know, mature when you, when you moved on?

01;03;56;26 - 01;04;01;26

Jonny Dunning

Compared to kind of before they actually ran that program.

01;04;01;28 - 01;04;32;09

David Orme

Yeah. So visibility, in the spend is, is a massive win. You know, one of the big issues that they had were accruals, right? You've got a lot of business running through Oracle that wasn't being tracked accurately. Right. Or businesses weren't, uploading their invoices. So year end, you'd have a massive rush of, you know, hundreds of millions of dollars potentially, that all of a sudden came in and the businesses like, well, where did all of this come from?

01;04;32;09 - 01;04;54;15

David Orme

We weren't planning for this. So one just from a financial aspect, you know, one of our biggest wins was getting finance support, right? Saying, oh, well, we actually have full visibility. We we try to derive things from Oracle is their system out of Oracle into the vendor management system. Because we know the controls are in place and they're being monitored.

01;04;54;17 - 01;05;22;02

David Orme

They're being reported on. Whereas if it's through Oracle they they had to try to do it. And they didn't have the bandwidth to do it. And they didn't have the the controls in place to really say, you know, our managers are are approving in a timely manner that all the POs are put in, you know, like if it was signed, if an agreement was signed, that was on the manager to put it in, you know, they it was a hope, a wish and a prayer, right?

01;05;22;04 - 01;05;48;26

David Orme

Because it wasn't automatically done. Whereas if that spends already going through the VMS as soon as was signed by procurement immediately gets entered into the VMS, right? Versus if it was being managed through Oracle via PO. You know, and I imagine that's probably very similar in a lot of organizations. Right. Where they whether you've got Coupa, Ariba and it's really just you've got the buy side, you don't really have anything beyond that and the tracking of the resources or anything else.

01;05;48;26 - 01;06;10;02

David Orme

So I would say that, that, that visibility into your spend is huge. It gives you the granularity of the reporting that you're able to give to your business at year end. Not necessarily from probably September when they start their planning cycle for the budget for the next year, because they use all of that information as part of, you know, what should our budget be, right?

01;06;10;04 - 01;06;27;12

David Orme

So it was always an easier conversation when, you know, for the business when they're like, oh, I can you I've got access to this data. I already have it. I don't have to try to pull it. And I can already tell you, you know, these are the these are the projects that we've got that are open, that are still going to be coming through next year.

01;06;27;12 - 01;06;55;29

David Orme

So we could plan from an accrual purpose, versus the business units that did not they didn't have a as as good control on their budgets. So that's an easy one there. That I would say is a good indicator of a healthy, mature program is being able to just do planning and budgeting accurately. You know, honestly, you look at cost savings, always are huge, right?

01;06;55;29 - 01;07;24;22

David Orme

If you're sitting in procurement or finance. So those there are always targets. I mean that's always going to be one of the biggest, you know, targets for most procurement organizations is you know, they they're given their spend their savings target that they have to negotiate every year. So those track that visibility in that tracking in that category management that you're able to do when you have that visibility into the spend, just enables your procurement function and finance function, infinitely better than you would otherwise.

01;07;24;22 - 01;07;46;14

David Orme

Right? Because if you're pulling data from Oracle, you don't have that granular level data to really say, all right, well, I can't tell you what the hourly rates are for these folks. So I don't know if what we're paying for these resources, is even adequate. Right. Or if we're managing to our rate cards. So they just don't have that level of information.

01;07;46;17 - 01;08;17;20

Jonny Dunning

Yeah. And it always makes me think, you know, if you if you don't have this information, if you don't, if you aren't managing things in an organized in an organized way, how can you be strategic as an organization? And you know, you're talking about over $1 billion a year in spend? One of the where when you when you talk to people who recognize that there's a big problem, well, you know, they're getting into the conversation, they're thinking, well, well, I know we've got a big problem here.

01;08;17;23 - 01;08;52;00

Jonny Dunning

And they just think, I don't know, how are we going to get started? I don't know, how are we going to get the what the drivers are going to be going on? How are we going to get the buy into the business case, get this that, get the sponsorship, the support, at exec level. If you look at what you and the team achieved and the and the MSP partner achieved at Cox, I always like to do a bit of an exercise where I sort of go, well, if you imagine if you took that business back to what it was doing before, before they had this program right now, what would be the negative impacts

01;08;52;05 - 01;08;55;19

Jonny Dunning

on that business? And when you look at what you.

01;08;55;21 - 01;09;19;17

David Orme

Cost, I mean, right there, the like cost, you wouldn't have visibility. How do you plan. Right. Like a risk for the risk like it is. It's astronomical. Right. And and people I mean I'll be candid, like we had a C-suite leader come and say to a my VP of procurement, you know, I want a business case. Why? Yeah.

01;09;19;17 - 01;09;40;10

David Orme

What's the value of of going through the vendor management system versus me having my own people do it? I didn't even have to get into the ancillary costs of, you know, oh, well, you're going to you've got to if we're going to manage the business system or a system of our own, what's the cost of the upkeep? Who's going to manage it or the integrations?

01;09;40;10 - 01;10;02;26

David Orme

Who's going to make sure those are working? Just the people cost alone that you get from an MSP significantly outweighs it. And forget the fact that we were supplier funded, which made this very fun conversation to begin with. But, the just the people cost of how many people you had to work. Can you think about a $1.6 billion program?

01;10;02;28 - 01;10;27;27

David Orme

We had roughly 6 to 8 people, on the services or on the, staff augmentation side. Then we have different we had like our professional services. Then we broken up into construction services as well. And we had about 6 to 8 people dedicated managing those different buckets. Then you had your people that were supplier onboarding, off boarding, which were, you know, partially, you know, COE resources on the MSP side.

01;10;27;27 - 01;11;00;19

David Orme

Right? So not fully dedicated, but partially dedicated. We had an analytics team that, that was fully dedicated from an MSP side to support any requests, data build outs of dashboards, you know, coming across, you know, offshore team as well. It did support, you know, for around the clock, around the sun work just you know, from a people standpoint, you're looking at 35 plus people that are easily supporting this program that you now have to pay for or you have to do without.

01;11;00;22 - 01;11;28;23

David Orme

Right? Like you have to either put that burden back on your internal employees. So you have to figure out how are you going to allocate who's managing the the finance approvals, who's managing the actual resources, who's managing the onboarding, supporting who's managing the collection, the certifications of insurance. So the risk management, so the it was actually fairly simple to come back and say, look, here's what it's going to cost.

01;11;28;26 - 01;12;11;10

David Orme

I can go deeper, but if not, you know, just from a people perspective, this is what it would cost us to come back and manage this program ourselves. It's it's interesting because we I've seen your SIA’s reporting on this, like a little bit of a trend to going back to internal management, of, of your programs. And I look at that and I'm like, I feel like it must be in small to medium size firms because from a large, firm perspective, if you're managing a significant amount of spend the the offset of cost and the what you're going to have to now dedicate to analytics to other just like kind of I call it

01;12;11;10 - 01;12;25;12

David Orme

third party spend that's going to come in and actually manage that for you. That's in addition to what you would be doing is just astronomical. So I don't know. I don't see how they're finding that feasibility and bringing it back in-house.

01;12;25;14 - 01;12;57;23

Jonny Dunning

Well, I would imagine the where where there is feasibility possibly it's in more kind of medium sized organizations, not the giant enterprises, but also I would bet my bottom dollar that it's not heavily services procurement focused, which is which is where the big growth area, because the complexity if you look at contingent workforce management, it is more commoditized, it is more mature from a technology perspective, from a service perspective, you got companies are in the kind of third, fourth, fifth generation of running these programs.

01;12;57;26 - 01;13;28;00

Jonny Dunning

Services procurement is in the very early days compared to contingent workforce. So it definitely say that would be a differentiator as well. But you know, just listening to you talking about the the changes that were made in the value that it drove within Cox it's pretty clear to see that if you just suddenly say, okay, I'm going to wave a magic wand and turn everything back to how it was, it would basically have a disastrous impact on the business from a cost perspective, a risk perspective and operational perspective, supply relationships, all these things.

01;13;28;00 - 01;13;39;00

Jonny Dunning

It would be that's I find a fascinating way to look at it. When people are saying it's really hard to get started when you look at a mature program and go, what if you took all that away? You'd see where the value is pretty quickly.

01;13;39;03 - 01;14;10;04

David Orme

Yeah, all the controls are now gone, right? I mean, I cannot tell you how many battles we had with business leaders, and not that I fault suppliers for doing this, but the suppliers are trying to, you know, maximize their value, right? They're trying to maximize their cost. And I cannot tell you how often we had the conversation of, well, I agreed to do, you know, $10 more per rate, you know, just because it per hour, because we need the, the, the business or the supplier came in said, oh, we're getting this resource.

01;14;10;04 - 01;14;29;11

David Orme

They've been doing this, we need it up. And for another $10 I'm like, well, that's not the rate card. You're so what's agreed upon? And and they know the process right. So so we've we've had to push back on so many. I mean that's one of the values of our at the MSP in my opinion, is they're the kind of that gatekeeper as those initial SOWs come in.

01;14;29;14 - 01;14;56;10

David Orme

You know, because often the business will say we'll have a lot of those commercial conversations upfront, with the suppliers, and then they send in a request, they're like, oh, we've agreed to this. And we're like, well, no procurement has agreed to this as a function, right. So if you don't have that gatekeeper, right, if you don't have that visibility into change was like we talked about earlier, like that cost alone just magnifies.

01;14;56;13 - 01;15;26;02

Jonny Dunning

Yeah, absolutely. I mean, listen, I really appreciate you coming in and taking the time to chat through this stuff. I really do think it's so, important for people to be able to, to listen and hear you talk about the challenges, that you faced with this and how it started, where it's got to now. I'm really looking forward to getting back together, for, for another conversation to talk about all that really cool, exciting stuff you now doing.

01;15;26;04 - 01;15;53;19

Jonny Dunning

Within Pontoon, which is, which is a whole another, journey and another episode, but basically taking all of the lessons that you've learned through through your journey so far. But just to round off the conversation today, if there was a message to that you would give to the people, the people, the the, the want to address this, the, the they don't know how to get started there right at the beginning.

01;15;53;21 - 01;16;03;14

Jonny Dunning

What what's the message you would give to them in terms of, how they should, could think about this and, and what the opportunities are?

01;16;03;16 - 01;16;27;07

David Orme

Yeah, I would say focus on what are the drivers of your business stakeholders because ultimately they're the end users of what you're trying to create. And if you're not creating it and then in a manner that is going to be useful to them, they're not going to use it, right? I mean, it's very similar to the kind of the procurement analogy we talked about earlier, right?

01;16;27;07 - 01;16;49;01

David Orme

It's like if you don't understand the business, they're going to use you as a buyers organization in procurement. They're going to send you the the document once it's done and negotiated and expect, expect you just to process it versus including you in that upfront conversation and being a true strategic partner. It's a very similar thing with the programs, right.

01;16;49;01 - 01;17;16;03

David Orme

You've got to understand what are the key drivers. But then also what are your influencers? Right. So part of the MSP VMS relationship within a company is are beholden to so many different corporate functions of finance, corporate security. Right. Your legal team. So understand kind of where are their pain points that they're seeing within the business as well because they become your advocates.

01;17;16;06 - 01;17;40;25

David Orme

Back to those business stakeholders saying, well, look, we had we had a huge occurrence last year, you know, and we can make sure that that doesn't happen by going through a vendor management system. So we've got a thousand resources. We aren’t tracking, you know, and corporate security says we need to pass this audit or we need to have access and visibility into these resources, because right now we've got people logging in from, you know, a country that we're not allowed to be in.

01;17;40;28 - 01;18;02;13

David Orme

Right. So it's like so it's really understanding kind of that full ecosystem. And what are the drivers that you can leverage to influence the business stakeholder. Because ultimately it's going to be the business that drives that, you know, especially non mandated programs. It's going to be that business stakeholder that says, you know we're going to go through yeah, we'll do this.

01;18;02;13 - 01;18;05;13

David Orme

We actually see the value. You're absolutely right.

01;18;05;15 - 01;18;24;24

Jonny Dunning

I love it I kind of take this full circle really because it ultimately comes back to exactly as you said, understanding the business and being strategic and ultimately the strategic impact of this. You know, we've seen it within the description of the journey in the program at Cox, massively value and hugely important from a from a strategic perspective to the whole business.

01;18;24;24 - 01;18;45;06

Jonny Dunning

So, it's a fantastic, success story and, on a really great case study. And yeah, thank you so much for for talking through it. It's been an absolute pleasure to kind of drill into some of the details, on it with you and, and hopefully that'll be really useful to people. And, you know, it's all about building the conversation and getting the message out there.

01;18;45;06 - 01;18;48;26

Jonny Dunning

So I really appreciate your time. David, thank you so much for joining me.

01;18;48;29 - 01;18;50;28

David Orme

Of course. Thank you for having me on it.

01;18;51;00 - 01;18;51;27

Jonny Dunning

Excellent. Cheers.