Leading energy products and services company drives significant savings and process improvements through global temporary labor solution

Situation:

A world leader in energy products and support services, the company had grown rapidly through acquisition that had resulted in a large number of temporary labor suppliers and non-standardized processes across company divisions. The enterprise also recognized the need to improve approval controls and visibility but was limited by its manual ordering and invoicing processes.

Solution:

The company worked with ICG Commerce, their procurement outsourcing provider, to globally source temporary labor – $16MM in annual spend – while simultaneously implementing an online services procurement tool to support the end-to-end process, from requirements identification to candidate selection, to submission of time cards. ICG Commerce's temporary labor category team worked with the company to define their requirements across 40 global locations and develop standardized requisitioning processed across all divisions. Once the requirements and processes were approved, the category team conducted a formal RFP process across all geographies. Out of the selection process, the company selected eight suppliers that provided them the right mix of geographic and subcategory (administrative, industrial, technical) coverage. Standardized contracts were developed and all selected suppliers were placed under formal agreements. The new processes were captured in the online services procurement solution, which greatly reduced the effort to find and select a candidate, while significantly improving control and visibility of the spend. As each supplier agreement was finalized, ICG Commerce conducted specific training sessions on both the company's processes as well as on the online services procurement tool. Internally, over 54 locations and 234 users were trained and are using the solution to request and administer temporary labor services.

Results:

Focusing on the addressable portion of the labor spend – supplier markups – ICG Commerce and the company obtained over 24% average savings globally. In addition to savings, the company has seen significant process and productivity improvements. The online services procurement solution enforces strict compliance to contracted rates and improved visibility to total spend, spend by business unit, and spend by supplier. Electronic consolidation of invoicing and billing has eliminated time-consuming and often uncontrolled paper invoicing.