While overseeing a major financial institution’s global Managed Service Provider (MSP) programme, Pontoon identified a significant opportunity for improvement: addressing rogue spend associated with Statement of Work (SOW) contractors. Our intervention led to the reclassification of over $400 million in spend, resulting in substantial annual savings of 12%.
Research shows that procurement professionals generally estimate rogue spend to be as much as 23% of their negotiated spending, with nearly 60% of contingent/contract labour going unaccounted for in financial planning within the average company. This unclassified talent spend poses heightened risks for risk-averse entities such as financial institutions.
Being aware of these findings, Pontoon was responsible for enhancing cost control, visibility, and compliance within the $1.2 billion global MSP spend for our client in the financial sector.
Our team conducted a comprehensive analysis of rogue SOW spend across the institution, identifying over 1,200 suppliers engaged in SOW procurement with varying degrees of governance. We adapted the existing vendor management system (VMS) technology, Fieldglass, to accommodate time and materials contractors previously processed through alternative talent channels. This customisation allowed our customer to maintain preferred supplier relationships while benefiting from enhanced MSP processes, visibility, and technology.
The implemented measures included:
Since implementation, Pontoon has successfully reclassified over $400 million in spend, resulting in a remarkable 12% annual savings.
With an increased customer experience score and heightened visibility and risk mitigation across the talent population, our customer has gained firm control over their contingent labour spend, enabling them to reallocate reclassified funds strategically within their talent and overall business strategy.
