4 Ways To Measure The Value Of Your Organization’s ‘Invisible Workforce’

James Lee
James Lee
Sep 10, 2019 · 3 min read

At a time when businesses are relying increasingly on services providers and non-payroll workers to carry out many mission-critical operations, how can management ensure that this often unseen workforce delivers maximum value consistently?

A newly published research study reveals that while many organizations excel in gauging the financial aspects of their relationships with their external labor force, they frequently fall short of managing equally crucial, people-oriented aspects of these engagements. For example, who exactly is performing the work? Are their certifications and training up-to-date? Does their access to information systems follow security and compliance standards? What is their progress toward deliverables? How does one measure the value they contribute?

As services providers — from strategy firms and marketing agencies to IT consultancies and a broad range of other professions — take on expanding roles within the organizations they support, business leaders must carefully evaluate not only the skills and value they deliver, but also the third-party risk these workers can accompany. Consider that according to the research:

· One in four projects begun by services providers fails to reach completion on time or on budget

· 44% of respondents report experiencing digital security breaches either sometimes, frequently or in nearly every engagement with services providers.

· 27% of executives are highly informed about services providers’ progress against deliverables and/or milestones, and only 25% are highly informed about the work they perform. As a result, executives have little sense of whether they are achieving a favorable return on investment.

So how can business leaders gain greater visibility into what, at times, can be a hidden workforce? The research recommends taking these four steps to maximize value, increase return on investment and mitigate risk:

1. Illuminate your invisible workforce. Effective management requires clear visibility, yet less than half of research participants indicate they’re highly informed about the basics of their services providers, such as contract terms (48%), where they are located (44%), and who is doing the work (44%). Through digital networks, organizations can gain visibility into the services providers who support them, assess progress on deliverables, evaluate the quality of work performed, obtain insights that improve decision-making, and gauge return on investment throughout the life of an engagement.

2. Manage with rigor. While many organizations successfully optimize value from the master contracts they negotiate with preferred suppliers, fewer benefit from visibility into downstream tactical operations — and thus miss out on potential opportunities for value. Meanwhile, this lack of transparency can expose companies to substantial risk. Quality control is a particular challenge, cited by 36% of respondents as arising either sometimes, frequently or nearly always. For compliance issues, the figure rises to 43%. This represents substantial untapped value, but also low-hanging opportunity. Business leaders can take advantage of the visibility made possible by digital networks that link together organizations and their services providers.

3. Rise above the silos. The research finds that many organizations handle procurement for goods and people-based services in the same manner. While two-thirds of executives say their procurement function recognizes crucial distinctions between the two, their cost-centered approach to managing services providers suggests difficulty in putting this view into practice. For this reason, the research suggests maintaining close coordination between human resources and procurement, with the goal of integrating key measurement data while keeping separate the unique aspects of managing people and the sensitivities involved. By approaching spend management intelligently, digital networks can help dramatically to navigate these and other complexities involving the procurement of goods and external workers.

4. See your contribution in a new light. When fully one-quarter of projects fail to finish on time or on budget, fault may lie with the services provider, the client or both. Either way, it’s a staggering failure and a potentially sunk cost. A reliable early-warning system would go a long way toward ameliorating the problem of neglected deadlines, missed targets or shoddy work product. Anyone who works with services providers can add more value to his or her organization by more actively managing them, aided by the real-time visibility afforded only by digital networks.

In an intelligent economy where services providers and non-payroll workers are as connected, as nimble and as invaluable to an organization’s success as they’ve ever been, business leaders are wise to embrace the visibility necessary to measure — and maximize — the full value of their contributions. For a detailed analysis, check out the full research study.

The author is chief operating officer of SAP Ariba and SAP Fieldglass.

SAP Innovation Spotlight

Brand journalists cover tech and IT trends like Digital Transformation, Future of Work, Purpose, Customer Experience, and more. VISIT OUR ARCHIVES HERE: https://medium.com/sap-innovation-spotlight/archive.

James Lee

Written by

James Lee

Chief Operating Officer of SAP Ariba and SAP Fieldglass. Follow @jklee2008 or visit www.ariba.com and www.fieldglass.com.

SAP Innovation Spotlight

Brand journalists cover tech and IT trends like Digital Transformation, Future of Work, Purpose, Customer Experience, and more. VISIT OUR ARCHIVES HERE: https://medium.com/sap-innovation-spotlight/archive.

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