When SAP decided it needed a global platform to handle its growing contingent workforce, it didn't have to look...
very hard for a vendor. The ERP giant has just begun to roll out the vendor management system (VMS) from Fieldglass, which SAP acquired in 2014 for a reported $1 billion.
The Fieldglass VMS deployment is intended to help SAP get a grip on its expanding use of contingent workers, including freelancers, temporary staffers and statement-of-work (SOW) contractors. It will act as a single point of access for SAP to deal with its force of more than 20,000 external workers, who are engaged by a variety of service providers and partners, according to the company.
This rapid growth of the contingent workforce made implementing a VMS an absolute necessity, said Amy Gordon, global head of SAP's External Workforce Center. In 2012, SAP decided to focus heavily on its external workforce, but faced significant challenges.
"When we were asked to provide overall global analytics and information on our external workers, it was extremely difficult because we had about 20 different tools, depending on which country or [line of business] you were in," Gordon said.
SAP didn't have any insight into its external workers beyond finances, and the company did not always know exactly where people were located and what they were working on.
"We looked at a couple different things. SuccessFactors came on board and we talked to them about a contingent module," Gordon said. "But then, Fieldglass was acquired and became part of the SAP family, and we were thrilled."
New ways to supervise contingent workforce
Gordon said that SAP plans to use the cloud-based Fieldglass VMS for the entire flexible-employment lifecycle -- from the requisition to sourcing through the day-to-day invoicing, timesheet activities and reporting. Two major benefits that were not previously possible are greater visibility into the contingent headcount and spend by location and project, as well as reducing risk through automated security and compliance checks. The Fieldglass VMS can handle the various compliance and tax regulations for each country.
SAP is also integrating Fieldglass with other divisions, including Ariba, SuccessFactors and SAP ERP. "We've spent a lot of time in the different areas trying to figure out how they work together," Gordon said. "For our implementation, we've also implemented Ariba along with Fieldglass, so as we are onboarding our vendors, they first need to be registered with the Ariba network before registering with Fieldglass."
The Fieldglass implementation should benefit SAP as a showcase for its integrated cloud applications. "There's a lot of synergy with Fieldglass as a cloud based platform, and there's a lot of momentum within SAP to always increase their cloud offerings," said Krista Quicke, a Fieldglass senior project manager. "One of the benefits of implementing this tool internally to SAP was to 'drink our own champagne.' Based on that back-end integration with the other applications, we can go to clients with this very simple plug-and-play implementation that leverages Fieldglass, Ariba and SAP."
Contingent worker details not always apparent
Using Fieldglass VMS makes a lot of sense for SAP, according to Chris Dwyer, research director and vice president of operations for Ardent Partners Ltd., a Boston-based research firm.
"When you look at SAP, it's significant because of how many offices they have across the globe and how much of their workforce is freelancer or independent," he said. "I think that any big company like SAP really needs something that can not only help them manage the engagement processes and the simple capabilities for managing talent as it comes in and out, but, more importantly, for SOW, which necessitates a perfect mix of workforce, supplier and spend management. And the Fieldglass platform has all these things."
Chris Dwyerresearch director and vice president of operations, Ardent Partners
The SOW aspect is important because it gives insights beyond merely how many workers there are and what projects they are working on, Dwyer explained. "It's things like what's the percentage of milestones that have been completed, have delivery dates been met, are there certain projects that have gone overdue or past scope and how much does is that cost," he said "You need a VMS platform to really manage that part of the non-employee workforce."
Visibility into the contingent workforce that Fieldglass provides is critical, as Dwyer noted that 55% of the average company's contract employees get lost in the shuffle, because a system doesn't manage those workers as a whole.
"Identity management is huge: Who are my workers, where are they working, what are they working on and how much is it costing me?" he said. "Compliance is another major thing, especially for a global company like SAP: Are we being compliant in the global regions where we don't necessarily have a tried-and-true, mature contingent workforce plan?"
SAP is rolling out Fieldglass in stages, beginning first in North America and Germany. Modules for temporary workers are currently live in North America, which will be followed by the modules for other categories of contingent labor, such as SOW.
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