By Jan Urban
In the current, fast-moving and shifting environment of company mergers and acquisitions, there is the continuous task of adjustment, vetting, compensating and decision-making required to incorporate or exclude new suppliers and their respective contractor labor into the acquiring company’s MSP/VMS program. This is a challenge from many business and program vantage points, so here are a few things to consider when merging your CW programs:
Limit the supply base. You don’t want an unwieldy supply base, so work with the affected lines of business to define a timeframe for these new supplier engagements. It’s either limited to the current contract labor until phase-out, end of assignment or end of project. Make sure you have the discussion that future needs will be bid-out in the program environment with all suppliers, not just the existing one that came in through the acquisition.
Keep existing suppliers motivated. Be honest with your suppliers through the merging process. Help them understand this is the standard mode of your business operations. Ensure all incoming suppliers know they will have a period of time to prove themselves to remain in the program and will be held to same supplier performance metrics after that period of time. They should know they may very well be placed in a lower tier for any future business candidate submittals until they have concluded their probationary period.
Negotiating with the acquired company’s suppliers. With all incoming suppliers, especially larger consulting firms that attempt to red-line any standard CWP (MSP/VMS) contract, secure support from the applicable lines of business to engage these suppliers in the program right up front. Explain the benefits of compliance, roles, rates and responsibilities to market comparison and supplier performance measurement. The line of business can be critical in putting pressure on the supplier to comply with your program contracts and on-boarding.
Ensure incoming independent suppliers are compliant. Work with your M&A and legal teams to make sure you can identify any incoming independent suppliers and contact them as early as possible. General rule of thumb: Always have the new independent evaluated through your program before they come on board OR have an exception policy in place that will allow a specified time frame to engage (suggest 90-day period) before your business compliance evaluation has to be completed.
Jan Urban is global process owner, CWP, Oracle.