The Business Case for SOW: Services Procurement in the new normal
Delivering agility and cost savings through our Statement of Work (SoW) campaign for Amway
There's no doubt that the Covid-19 crisis very quickly highlighted what information enterprises did and didn't know about their workforce, particularly when it came to the extended workforce. However, for the world's largest direct selling company, Amway, preparations that began in 2018 effectively set the business up to adapt and handle the crisis once it hit in 2020.
Restructuring workforce solutions
In 2018 the firm went through a global review of the organisation structure which included a cost saving assessment. It was during this review that the HR and Procurement teams identified that while mature management processes were in place for the temporary labour market and the firm's Managed Service Providers (MSP), the Statement of Work (SoW) segment of the workforce was a relative unknown. As a result, Amway initiated a strategic process to identify the best partner to develop and run a SoW program that would drive process improvement, compliance, cost efficiency, streamline vendor management and provide greater transparency of the firm's extended workforce.
A new approach to services procurement
Amway had ambitious goals for the program in North America and elected to take a 'Big Bang' approach to program implementation and utilisation. Through this process, the intent was to facilitate an efficient and effective solution that would provide value and benefit to all categories throughout its corporate entity. The organisation also wanted to maximise supply base onboarding ahead of go-live, which required vetting and approval of 100+ vendors into the program, along with achieving the goal of ensuring that every program facilitated outside services engagement now had a legally approved statement of work for additional compliance. While this was certainly a big ask of a provider, the firm felt that Guidant Global had the experience, capability and appreciation for the nuances of Amway that would enable them to adapt their approach and be flexible in coming up with a solution that would foster positive program adoption across the organisation and its vendors.
The Guidant Global solution
The SoW program delivered by Guidant Global saw a number of process improvements and enhanced engagement with Amway business partners and vendors ahead of go-live, including:
Implementation of a 'one-system, one-approach' solution that provided complete - and simple - transparency of the SoW workforce for the company
A supplier funded model that reduced the potential impact on bottom-line finances for Amway
Complete engagement with all targeted vendors ahead of the go-live date
An agile system that can be adapted quickly to ensure the company's resources can be swiftly scaled up or down in line with demand
Delivery of customised training, including roadshows, live training and one-to-ones to ensure suppliers and internal Amway teams involved in the SoW program had the relevant knowledge of the new program and tool. The training was of particular importance to Amway to ensure the buy in of the Amway business partners and all vendors.
Best-in-class results
The first year of the partnership between Guidant Global and Amway was a success to say the least, with both parties admitting that the results exceeded all expectations. In 2019, the program saw:
200+ managers in 16 categories trained
Over 200 suppliers onboarded and trained
350+ SoWs through the program
$50+ million in spend captured
100% supplier on time payment
Agile ready ahead of the pandemic
While the 2019 results certainly speak for themselves, it was during the 2020 pandemic that the benefits of being ahead of the services procurement curve really shone through.
Having increased visibility of the company's non-employee workforce allowed Amway to smoothly transition into full remote working at the beginning of the pandemic. And while there were difficult resourcing decisions to be made, with significantly improved visibility of the full extended workforce (contingent and service provider) available on its VMS, the company could swiftly identify the key roles that were needed to keep the business running and act accordingly.
Amway was also able to adapt to the changing market quickly and absorb new work by being able to access a truly agile external workforce. Having both its temporary labour and services providers in the programme, and under close management, also helped the company mitigate risk of misclassification, which was particularly important in a tough economic climate.
Justin Sellers, Global Category Leader, Professional Services and Temporary Labor, Amway, commented:
"The results of this partnership are continuing to develop for Amway, but for me, the fact that I'm getting fantastic feedback on the Guidant Global team – with people pro-actively telling me how customer orientated and services minded they are – really highlights that this partnership works.
We're in a strong position now where we can effectively and efficiently run the bid process, and have increased our internal procurement team's capacity. Having data on our supply base and contracts available in the tool is also a key enabler of our sourcing strategies, allowing us to effectively manage performance measures across our supply chain."
"Looking to the future, we're planning to roll this programme out across wider geographies and really focus our spend with the highest performing vendors, enabling Amway to grow with those that will be most strategic partners for business growth, including Guidant Global."
View our session recording below to find out more about why businesses are turning their attention to services procurement and Statement of Work (SoW) and Amway's journey to achieving success.
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