Before COVID-19, every industry was already seeing the impact of digitization. Mergers and acquisitions (M&A) and consolidation were increasing, innovative disruptors were raising more venture capital than ever before, and each internal function in large enterprises was strategizing on how to embrace and incorporate technology.

As the global pandemic hit, digital transformation hit the gas. The most defining effect of COVID-19 on digital transformation has been the growth of e-commerce penetration: e-commerce adoption grew more in the last six months than it has in the prior 12 years. Industries are fundamentally redefining themselves. New consumer behaviors and habits are forming, and the value chains of the market are permanently shifting.

While digital transformation promises a great challenge, it also promises significant opportunities. In our conversations with leading executives across the Finance, Procurement, HR and IT departments – one recurring theme has been made abundantly clear: to capture this new emerging value, an agile and robust talent strategy will be necessary.

Resetting Contingent Workforce Strategies

It’s time to hit the reset button on contingent workforce strategies! Age-old strategies were already under pressure pre-COVID-19. In a post-pandemic, hyper digitized world, organizations cannot revert to outdated techniques. New strategies and boundaryless thinking are required to reconstruct a more sophisticated, agile and robust workforce.

Strategic relationship management and governance (SRMG) in the absence of a strong operational framework can be challenging in the best of times. As we are all too aware, these are not the best of times. Over the past six months, we have faced enormous challenges; the speed of change and the need for quick decision-making is unprecedented. 

As the world struggles to recover and our workplaces, global supply chains, manufacturing and logistics cautiously rebound from the first wave of the COVID-19 pandemic, we are grappling with what the future holds.  Our strategic relationships will require flexibility and scenario planning that incorporates significant uncertainty as we face challenging times ahead.

Partnerships between clients and service providers are being tested like never before. These partnerships require an SRMG framework that adapts quickly to change. You should identify pain points as well as processes or services that must be added or changed to accommodate shifting priorities and workplace requirements.

The pandemic raises many critical questions that must be addressed as we consider what the workplace of the future will look like, and strong SRMG will be essential.

Here are a few critical questions to consider:

Does your contract with your strategic partner have the flexibility you need in the current environment?

Every business has had to adjust during the pandemic. Is your contract holding you to an agreement that doesn’t make sense in the current environment, or requiring your partner to perform in a way that doesn’t suit your current needs? It may be time to renegotiate a new contract that has the flexibility that you and your strategic partner require.

SIG University Certified Sourcing Professional (CSP) program graduate Karina Swanson discusses the RFx process and how it allows you to analyze real-time market dynamics to ensure you are receiving the right service or product.

There are several reasons you may be considering  an RFx strategy as the correct process to pilot for your business. If so, I highly recommend taking a closer look at your portfolio and ask yourself these questions:

-        Have you seen a pricing change in the last 12 months?

-        Do you have a diverse number of suppliers?

-        Do you see small gaps in pricing from dual or multi-sourced products or services?

-        Is your portfolio consolidated?

-        Have you eliminated all risk factors from your portfolio?

If you answered “no” to any of those questions, then launching an RFx will bring value to your business.

Defining RFx

RFx is a term used to describe multiple types of requests. Choosing the right requests for your business is dependent on your end goal. Start by having discussions with your team and stakeholders to identify what you aim to accomplish.

If you are looking for a general understanding of services or products, you can launch a Request for Information (RFI).  Most people use this as the first step in their RFx strategy to evaluate their suppliers’ capabilities. An RFI is a useful tool to involve new suppliers on a new project, assess the market for better suppliers, create a short list of suppliers for your portfolio or the next phase of your strategy.

A Request for Proposal (RFP) is sent to specific suppliers (possibly your short list) requesting a solution for specific problems and gives suppliers the opportunity to bid on your services or products.  This request also allows you to evaluate the supplier’s skills.

As the COVID-19 pandemic continues to devastate global economies, businesses across every industry and every size have been making the difficult decision to furlough or lay off workers. As of early July, nearly 50 million people have filed for first-time unemployment benefits over the previous 16 weeks.

Almost one-quarter of all small businesses in the U.S. have already laid off or furloughed their workers due to the pandemic. The majority of the June job gains were not newly created roles, but roles that hired back laid off or furloughed workers.

As time moves forward and the possibility of additional layoffs and furloughs remain likely, maintaining contact with that population becomes increasingly complex and more critical to the future success of your organization.

There is a clear business case for investment -- to improve retention, boost employee morale, and because your brand reputation depends on how you handle this extraordinary situation.

Direct Sourcing with Talent Pools

The pandemic has companies rethinking their talent strategies. Many are finding direct sourcing through talent pools is one way that organizations can engage, manage, support and re-engage talent that has either worked for them before or expressed interest in doing so previously.

This not only saves time and money for companies (a must given the global economy), but it protects and benefits your most important competitive asset -- your talent.

Amy Fong is a Vice President in Everest Group's Strategic Outsourcing and Vendor Management practice. In this role, she advises enterprises on maximizing value from strategic provider relationships in outsourced services categories. She is a featured presenter at SIG’s upcoming virtual SIGnature Events taking place throughout the fall of 2020. Virtual SIGnature Events are free to all qualified buy-side practitioners and sell-side members.

What is your role and what are your day-to-day responsibilities?

I work with our procurement members to ensure they are getting the research and support they need to maximize value in outsourced services categories. We have 200 analysts focused on the outsourcing, global services and intelligent automation space. My role is to work across those content areas to bring it all together and ensure we’re helping procurement.

For instance, developing category strategy templates with the market intelligence we provide, facilitating briefings and peer discussions, and designing surveys that answer top of mind questions. I’m available to our members to answer their questions or guide them to the right expert analyst to dive deep into their challenges.

In the time of COVID-19, this also means helping procurement teams understand how service providers are reacting and what they can expect. Also, helping them identify cost takeout and risk reduction opportunities for the “next normal.”