The External Workforce and Preserving Your Talent Supply Chain

⇨ Businesses are increasingly relying on external workers due to a tight labor market and skills shortages, with one study citing 5-15% of workforce spend allocated to contingent workers.

⇨ Effective management of the external workforce is seen as critical for organizational success, yet only 30% of executives feel adequately prepared to manage this workforce.

⇨ Integrating SAP Fieldglass with existing SAP ERP systems can allow for improved management of contingent labor, cost control, risk minimization, and enhanced visibility into workforce quality and efficiency.

The talent supply chain is seeing pressures from both a tight labor market and skills shortages, and in response, most businesses are increasing their use of the external workforce. In a recent Economist Impact report, the majority of C-suite executives surveyed said that 5-15% of their workforce spend is on contingent workers. The same research also reports 41% of the same execs see “balancing internal and external workers” as priorities for the next 12-18 months.

A 2022 report from MIT Sloan Management Review and Deloitte meanwhile finds 74% of executives believe that effective management of their external workforce is critical to their organization’s success. But only 30% agreed their organization was sufficiently preparing to manage a workforce relying on such talent.

A solution here is bolstering one’s ERP to better handle the talent supply chain. For SAP Insiders, one option is utilizing the SAP Fieldglass portfolio. A cloud-based Vendor Management System (VMS) for managing services procurement and external workforce management programs, Fieldglass offers two key tools with SAP Fieldglass Contingent Workforce Management solution and SAP Fieldglass Services Procurement application. The former can be used for managing contingent labor such as freelancers and temporary workers, while the latter is for managing services providers. SAP Fieldglass says with these solutions, end users can:

• Rapidly find and onboard the external talent they need 
• Gain visibility
• Control costs 
• Track quality of work
• Drive process efficiency 
• Minimize risks across security, compliance and more

The question is how this integrates into a company’s existing SAP ERP infrastructure, including SAP S/4HANA. Here, SAP Fieldglass VMS can allow Insiders to continue managing spend, budgets, payments, and cost allocations in their SAP ERP applications. Meanwhile, using SAP Fieldglass, users can mitigate security and compliance risks, plus track quality of work, milestones and more. 

Data, processes, and transactions can flow with ease between SAP Fieldglass, SAP Ariba, and the SAP ERP applications. Also on offer is flexibility without the need for custom development through standard, yet highly configurable, integrations to SAP ERP applications maintained by SAP.

Fieldglass and Finance Automation in the Cloud

Specifically, for cloud users utilizing SAP S/4HANA there is a strong automated workflow between SAP Fieldglass and SAP S/4HANA, as illuminated by the following process:

1. Invoice processed, paid, and updated in back end with SAP Fieldglass VMS (SAP Fieldglass) for SAP S/4HANA.
2. Purchase requisition (PR) and purchase order (PO) approved and created in response with SAP S/4HANA for SAP Fieldglass.
3. Assignment or SoW is then sent to supplier with SAP Fieldglass;
4. Time sheet, expense, or deliverable entered and approved, also with SAP Fieldglass. Both steps are actioned for SAP S/4HANA.
5. Service-entry sheet created in response with SAP S/4HANA for SAP Fieldglass.
6. Invoice created and approved with SAP Fieldglass for SAP S/4HANA
7. Invoice processed, paid, and updated in back end with SAP S/4HANA for SAP Fieldglass.

 

 

For SAP Insiders, the journey to SAP Cloud with SAP S/4HANA remains a key business theme (perhaps more so than talent supply chain challenges, in some cases). The above example from SAP Fieldglass may be an interesting one for finance leaders keen on use cases, especially in regards to the talent supply chain. The SAPinsider report “AI and Automation in Finance 2024” meanwhile notes a key driver (34%) in the eponymous theme is that the move to SAP S/4HANA provides opportunity for automating finance processes.

“According to survey responses [involving 159 finance community members], more than four in ten (41%) of respondents and their organizations are currently operating either SAP Business Suite or SAP ECC,” notes SAPinsider president Riz Ahmed in the report. “Running legacy ERP systems significantly limits attempts to leverage AI and automation technologies. These users will not be able to leverage new automation and AI capabilities that are available in SAP S/4HANA.”