Procurement Technology and Interim Management – a match made in heaven or hell? Part 2

Blog - Keyboard Edbury Daley
In his first article Andrew Daley reviewed what is happening right now in the Procurement Technology sector and how solution vendors and their clients are coping with the demands and opportunities that the digital procurement revolution presents. Here he explains how you can be best prepared if you have a digital transformation project on your agenda and how specialist recruitment expertise can help you land the best possible talent.

In my opinion, you need the advice and knowledge of someone who understands this specific niche market and that’s where recruiters like Edbury Daley can make a difference.

We’ve already enjoyed success in this market for a while but as we knew this development would come sooner rather than later, we made it our long term objective to replicate our success in the permanent market for procurement technology specialists by making ourselves the go-to supplier for the associated interim market.

There are details of what we are doing to achieve this, but before we get to that we need to address what needs to be on your agenda if you are planning a transformation project around the adoption of a digital procurement solution and want to consider hiring an interim.

Clearly defined requirements – plan this so you can take control of the skills you need to hire rather than being reactive and having to firefight mid-way through a project.

A clear plan on when you intend to hire – too many organisations get this wrong and go to market at the wrong time making life harder for themselves. Plan ahead, decide on how to source the people you need and identify realistic, achievable timescales.

A realistic budget – get some advice on the likely cost of the resource you need.

With the two latter points, many organisations often overlook the value of engaging a specialist recruiter that can advise and help plan ahead. If you want to gain an advantage on your competition for these scarce resources, don’t treat the recruiter as a necessary evil and view the relationship as transactional when you can get real value from some basic SRM practices – that’s what our most successful clients do!

So what is it that makes us so well positioned to advise in this area? Here’s a sample of what we are doing to ensure we can meet the needs of our clients:

  • Use our extensive network across the procurement technology market to identify who is buying or upgrading solutions, embarking on new projects or finishing existing contracts.
  • Using a range of methods to build relationships with every relevant interim specialist in the European market. For example, we attend relevant events like eWorld, Procurement Leaders and SAP Ariba Live to build and evaluate the relevant talent pool.
  • We provide existing customers with regular updates on the availability of specialist contractors to support their resource planning.

What will that mean for CPOs, CFOs and CIOs invested in these projects?

  • We can advise them on which contractors are available now and when others will be free in the short term.
  • We can advise them on developments in day rates and candidate availability as we are building detailed knowledge about the skills landscape in this niche market.
  • We are involved in the sector and monitoring the peaks and troughs in supply and demand meaning that contractors are coming to us first looking for new roles because we are specialists with a strong reputation in the market.

So that’s the good news. We know what’s happening, we are advising our clients and doing everything in our power to help them achieve their goals because that means a successful outcome for us.

But there is some bad news that is hard to sugar coat. IR35 is coming to the private sector interim market and that is going to have cost implications for us all! Employers, recruiters and contractors!

With this in mind, we have also invested significant time and resources into understanding the impact of the forthcoming changes in IR35 tax legislation. If this is something on your radar that you need to know more about, I’m sure we can help. If it’s not on your radar yet, it needs to be soon.

The key thing to note at this stage is that it’s going to affect the majority of contractors in any project that goes beyond April 2020. That might seem a long way off at the moment, but if you’ve got a transformation project starting later this year and you intend to use interim resources, you will need to account for it in your budget.

The only bit of good news I can offer around an increase in tax costing you more of your budget is that we are well placed to advise you on the implications. I’ll keep attending the IR35 seminars, reading the briefing papers we get from our professional body (APSCo) and keep sharing the information with our clients to help them plan ahead.

If any of the issues I have raised in this article are likely to impact your business then maybe it’s time to get in touch with me. I’ll do my best to answer your questions and I’m confident that it will help you understand the value of planning your recruitment in advance.

For further information on the procurement technology sector and recruitment advice please take a look at some of our articles and videos.

Procurement Technology and Interim Management – a match made in heaven or hell?

In this first article of a two-part series, Andrew Daley reviews what’s happening right now in the Procurement Technology sector and how solution vendors and their clients are coping with the demands and opportunities that the digital procurement revolution presents.

The start of 2019 has seen a marked increase in demand for interim resource with specific experience of implementation projects for P2P and S2C solutions like SAP Ariba, Coupa and Jaggaer.

But what’s caused this and why now?

Well, the wider interim professional market is relatively flat, as is the full-time job market, largely because of the uncertainty created by the political situation around Brexit.

In fact, in a recent report by recruitment professional body APSCo John Nurthen, Staffing Industry Analysts’ Executive Director of Global Research commented: ” With both permanent and temporary/contractor vacancies declining by 4% in January compared to 12 months earlier it is difficult to view the market through a lens that isn’t obscured by Brexit uncertainty.”

So what we are seeing in procurement tech’ goes against a wider trend in the employment market and to understand why we need to look at what has caused this and why it’s the start of an ongoing trend.

The first thing to note is that many of the software vendors are thriving as sales of their solutions increase on the back of the digital procurement revolution. Here are a few examples:

  • Ariba is clearly reaping the benefits of SAP’s investment in solutions and people
  • Coupa’s share price is outperforming market expectations
  • Jaggaer’s takeover of Bravo Solutions is now complete and given them a strong market position
  • Ivalua is investing heavily in the UK market
  • Proactis has grown through a series of acquisitions

With Basware and Tradeshift now clear to pursue their own growth strategies following the aborted merger, and several best of breed solutions enjoying good results, it’s a growing market, offering end users a great deal of choice.

We’ve actually been predicting that the increase in demand for specialist interims will happen since October 2017 as evidenced in our Insider Procurement & Spend Management Report. We expected it to happen before now simply because of the availability of these skills in the market (or lack of them), but companies adopting these solutions have largely found other ways to approach the challenge.

Many end user organisations have used the implementation teams of the software providers themselves (particularly common with SAP Ariba, Jaggaer, Proactis and several mid-tier players), whilst others have used specialist consultants, particularly Coupa clients, to drive adoption of their new systems. In fact the big consultancies have built their growing digital procurement practices on the back the transformation work associated with the latest generation of spend management software.

The consultancies have aspirations to further grow their specialist teams in this area, but they are constrained by the availability of these skills themselves and that is stretching their capacity and in some cases impacting on client satisfaction. There is also demand for very similar skill sets from the software vendors, particularly SAP Ariba with their heavy investment in their customer success, implementation and value engineering teams. Ivalua has hired more solution consultants in the past year whilst others have fought hard to keep their teams intact as competitors and the consultancies seek to tempt their best people.

So we’ve got high demand outstripping supply in the full time market which is constraining delivery focused resources, and several additional factors that appear to be pushing organisations down the interim route including:

  • The cost of employing consultants, particularly from the top tier consultancies
  • Some frustrations with the output of the consultants as mentioned above
  • The desire to have greater control and ownership of the process internally
  • Pressure for results from senior management driving greater urgency

So we are now seeing greater demand for specialist contractors who can lead P2P implementation projects, manage internal and external teams and relationships and deliver the outcomes that clients signed up for when they invested in their preferred solution.

And why not when you can hire a highly experienced practitioner for £600-£800 a day and even when you add in a recruiter’s margin, that is still much more cost effective than hiring someone less experienced from a consultancy or software vendor at c.£2000 a day!

Add in supporting roles like business analysts, business process specialists, supplier adoption specialists plus program and project managers and you start to see a meaningful change in market conditions.

But there is a problem with this model. The availability of these skills is still constrained so with a simple supply-demand equation there will be an increase in cost (i.e. day rates) over the course of this year and next. This will only be exacerbated by the changes in IR35 legislation affecting private sector companies next year (more on that below) but ultimately the big winners here are the contractors who can offer these skills.

The challenge for companies who want to hire them is that they are competing for people who aren’t driven by the classic career goals or necessarily that bothered about how exciting a project is because life as an interim is about finding the most lucrative projects to work on, usually in 6-12 month cycles.

To get the best talent into your business you’ve got to have the budget to pay competitive rates and be able to move quickly when the right skills are available before someone beats you to it. But how do you ensure that you’re in pole position to land the right people at the right time?

In Andrew’s second article on the subject, he shares his knowledge and experience about how you can be prepared if you have a digital transformation project on your agenda and how specialist recruitment expertise can help.