Human Supply Chain: How to manage it
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Every business day, between 150 and 300 independent contractors work at financial services firm CUNA Mutual Group as software programmers, help-desk assistants, business analysts, project managers and other roles.
Until 2005, titles, responsibilities and pay rates for these workersnegotiated by each hiring manager with an assortment of sourcing and staffing firmshad varied widely from department to department at CUNA Mutual, which underwrites and administers insurance and other products for credit unions, says David Nelson, the company's director of sourcing. As a result, the firm was not getting the best rates for the best talent.
"We were [an example of] how not to do sourcing," Nelson concedes. "We were not managing demand. We did not negotiate our best deals. We did not have visibility into what we were buying. And we did not really have performance management."
So, two years ago, CUNA Mutual scrapped its ad hoc contract-worker hiring practices and deployed services management software from IQNavigator of Denver. Services management software is a narrow product category that falls under the larger umbrella of spend and procurement management. The annual market for such software is about $2 billion and is projected to grow by about 15% a year, says Ben Pring, a research vice president at consultancy Gartner.
In addition to cutting costs, companies using services management software say that it helps ensure compliance with labor and tax laws, establishes a method to measure each contract worker's performance, and automates payment of the workers, according to Kieran Brady, senior vice president of international markets for IQNavigator. The company sells its services management software as a hosted service.