How Pontoon identified rogue SOW spend, mitigating risk for a financial services customer | Pontoon

How Pontoon identified rogue SOW spend, mitigating risk for a financial services customer

Summary

A CLEAR OPPORTUNITY – IDENTIFYING ROGUE SPEND ACROSS CONTINGENT PROGRAMS

Wed been looking after the global MSP for our customer — a global financial institution — for a few years, when we identified an opportunity for serious improvement: tackling rogue spend on statement of work (SOW) contractors.  

Since our intervention, the company has been able to reclassify over $400 million in spend, resulting in significant annual savings.  

Overall satisfaction with our programme stands at an impressive level, and the partnership continues to deliver long-lasting value. 

The challenge

A CUSTOMISED CONTINGENT LABOR PROJECT

A 2019 report from Spend Mattersindicates that procurement professionals estimate their rogue spend to be as much as 23% of their negotiated spending — and nearly 60% of all contingent/contract labour being unaccounted for in financial planning, forecasting and budgeting within the average company.  

This unclassified and unidentified spend on talent presents even more of a risk to financial institutions, which need to be more risk-averse than the typical organisation — in another recent study, almost 100% of banking and insurance institutions stated that they planned to increase investment into compliance over the following two years.  

We saw it as our responsibility to address this issue for our customer, and to find a way to bring additional cost control, visibility and compliance to the $1.2 billion global managed MSP programme spend. 

How we helped 

Our team was able to analyse the rogue SOW spend across the institution. We found more than 1,200 suppliers engaged in SOW work, and varying degrees of governance.  

We adapted the existing vendor management system (VMS) technology, Fieldglass, so that it accounted for the time and materials contractors who were previously being processed through other talent channels.  

This meant that our customer was able to keep the relationship with their preferred supplier, while benefitting from MSP processes, visibility and technology. 

Impact

RECLASSIFICATION OF ROGUE SPEND ON CONTINGENT LABOR

Our work with this customer has reclassified the rogue spend on their global MSP programme, and delivered a huge range of benefits to the company, particularly their hiring management team: 

  • Improved overall transaction visibility —spend, suppliers, bids, agreements 
  • Full compliance with background screening and other regulation checks within the organisation.
  • Dedicated Pontoon resource to host and promote the process and technology.
  • Standardised templates for worker tracking and invoicing.
  • Organised bidding environment for the work to be done. 
  • New budget and spend controls as part of the updated technology

 

Since implementation, Pontoon has reclassified over $400 million in spend, ultimately driving 12% savings annually.  

Overall satisfaction of the program is at 88% globally. With the increased visibility and risk mitigation across this talent population, our customer has been able to get a firm hold on their contingent labour spend.  

They can now factor these reclassified funds back into their talent strategy —  and into the company’s overall budget and business strategy. 

X