Neetin Datar and Michael Uhl, SAP
Utilizing and harnessing the power of an external workforce is quite common nowadays at global organizations regardless of their size, industry, or geography. In fact, per Oxford Research on average external workers can represent up to 42% of the workforce. It is also widely considered to be strategic to most organizations as it provides them the opportunity to either fill or complement their talent gaps while creating a flexible, nimble, and resilient workforce. However, organizations, often struggle with managing their external workforce effectively. They lack a unified strategy for the sourcing, management, engagement, and optimization of their external workforce. This, in turn, leads to inefficient processes, rogue spending, wasted money, increased compliance risks as well as other negative effects on the health of their business.
SAP offers External Workforce as an end-to-end business process that manages the entire lifecycle of an external worker at a company – bridging the silos of HR, Procurement, Finance, and IT. With the latest product releases, SAP has delivered 5 integration booster-shots specific to this process, so data flows smoothly across SAP SuccessFactors, SAP Fieldglass, and SAP S/4HANA Cloud solutions. Each of these market-leading solutions plays a critical part in the process i.e., SAP SuccessFactors is the HR system of record, SAP Fieldglass handles the external worker lifecycle from recruiting to onboarding to working to off-boarding and SAP S/4HANA Cloud manages the finance aspects.
Unlocking value for leaders of HR, Procurement, Finance, and IT
With the External Workforce process running smoothly across an enterprise companies can look to unlock business value for stakeholders like HR, Procurement, Finance, and IT – see Figure 1 below. The External Worker too has a much richer experience – from easier onboarding experience to getting paid accurately and on time.
Integration booster-shots for the External Workforce business process
The integration booster-shots enable a smooth flowing External Workforce process as shown in Figure 2.
Booster shot #1: Drive consistency of data with one common People Data Model
SAP has invested in defining and aligning the One Domain Model across all its business applications. This is a big deal. Why? Because, now with this alignment in place, People Data Model is consistent and semantically understood across all SAP applications. It solves the challenge of consistent data that is foundational in making Intelligent Enterprise come to life.
As shown in Figure 3, the mastering system of the People Data Model is jointly handled by SAP SuccessFactors Employee Central (for employee data elements) and SAP Fieldglass (for external worker data elements). The Master Data Integration (MDI) service on the SAP Business Technology Platform helps orchestrate and efficiently distribute People Data from the mastering system to the consuming systems. This enables the use of People Data and insights in all the downstream systems and business processes.
Booster Shot #2: Accelerate the External Worker requisition and recruiting process
Getting the best talent to fill an open position and getting it filled quickly is critical for business success. As soon as a company decides to fill a position with an External Worker, SAP allows to seamlessly handle it by triggering a job requisition in SAP Fieldglass from a position within SAP SuccessFactors – Employee Central. The data from the vacant position is automatically routed to SAP Fieldglass where the appropriate requisition is created. SAP Fieldglass then automates the steps in the process of procuring and managing the External Worker, from requisition through invoice and payment in concert with SAP S/4HANA Cloud. Importantly, as shown in Figure 2, information about the External Worker staffed on a requisition is fed back from SAP Fieldglass to SAP SuccessFactors Employee Central and a contingent worker profile is created in real-time.
This way the company has full visibility and can continue to optimize its total workforce and drive its business objectives forward.
Booster Shot #3: Streamline payments to suppliers with Evaluated Receipt Settlement (ERS)
ERS is a business process between trading partners that conduct commerce without invoices. In an ERS transaction, the supplier ships goods based upon an Advance Shipping Notice (ASN), and the purchaser, upon receipt, confirm the existence of a corresponding purchase order or contract, verifies the identity and quantity of the goods, and then pays the supplier. In the context of External Workforce, ERS helps with auto-generating invoices in SAP S/4HANA Cloud once the service entry sheets are approved in the SAP Fieldglass solution. See Figure 4.
The business benefits of ERS can be significant for both the buyer and the supplier organizations as it includes automatic settlement of the goods receipts, prevention of invoice variances, faster closure of transactions, and elimination of non-value-added work that saves time and labor costs.
Booster shot #4: Insights to action with Embedded Analytics
With the latest release, SAP Fieldglass has embedded SAP Analytics Cloud in their solutions. This aligns with what SAP SuccessFactors and SAP S/4HANA Cloud applications have already done in their earlier releases. SAP Fieldglass customers now have access to dashboards (aka “stories”) using real-time data to help inform decision-making. This new functionality makes it easy to access data and analytics on the most common procurement key performance indicators (KPIs). Procurement and HR leaders, business analysts, and other users will benefit from data that’s fresher, quicker to load, and more detailed than ever before. For example, leaders can compare trends in spend with the number of billed workers, services, and billable hours. Compare top 5 sources of spend across the organization and dynamically filter with linked analysis.
Enhancing how business leaders analyze data puts them in a better position to optimize their external workforce management strategies.
Booster shot #5: Access details of External Workforce process with Business Process Blueprints
SAP has developed detailed process blueprints for the External Workforce business process and published them on our API Hub as reference architecture supported by SAP’s Intelligent Suite. It provides an easy way to explore the end-to-end business process decomposed into applications, modules, business services, technologies, and integration touchpoints. It’s a great tool for our customers and partners to explore. It helps them increase their understanding of the processes and use it as an aid to chart their path to adopting these solutions and transitioning from their current solution landscape to the target landscape.
Outlook for External Workforce market is as bright as ever
In 2021 and beyond, we expect External Workforce to continue to play a leading role in helping organizations rebound from the disruptions caused by the pandemic, regain their competitive edge, and respond to the shifting needs of their customers. We believe transparency and insights made possible via integrated External Workforce end-to-end business process will determine which organizations return from the pandemic stronger than before, and more responsive and resilient to unforeseen change.
SAP’s innovation engines continue to be revved up
As you have seen, SAP has made significant progress in delivering an integrated end-to-end External Workforce management process across our business applications. And more innovations are targeted for the upcoming releases in 2022 and beyond. Undoubtedly, our journey to provide best-of-breed business applications (e.g., Human Experience Management, Finance, Travel & Expense, External Workforce) and best-of-suite solution (Intelligent Suite) is a reality. This is terrific news for HR leaders as they look to deliver exceptional workforce experiences for their employees & external workers alike and help chart a path for their companies to become Intelligent Enterprises.
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