How To Generate Continuous Savings Through A Decade-Long MSP Program

Program Timeline 

Client Need 

Build an evolving strategic program roadmap to produce continued aggregated savings across the organization. 

Years 1 to 3: 

• Gen 1 cost saving initiatives - standardized rates and volume rebate
• Implemented a go-live optimized supply chain 
• IC compliance and market rate analysis
• Doubled program savings from 1 to 2% within first 3 years 
  
  

Years 4 to 6: 

• Enhanced rebate savings schedule  
• Captured rogue spend 
• Facilitated tenure limits and applied tenure discount 
• Transitioned discount for impending M&A activity 
• OT rate savings, prompt pay discount and bill rate savings targets 

Years 7 to 9: 

• M&A transition savings  
• Misclassified SOW savings 
• Payroll rate benchmarking 
• 5% Services Procurement Savings 

Years 10+: 

• Proactive savings through Direct Sourcing and RPO solutions 
• Increased aggregated savings: tenure, prompt pay and volume rebate 

The Impact

A global, innovative program that is able to generate continuous savings without any business disruption. 

The DZConneX Strategy: A Decade-Long Cost Savings Roadmap 

The Client Business Need 

A DZConneX (DZX) client, a high-tech, leading global organization, was looking for a partner to stand up their first-generation program and build an evolving strategic program roadmap to produce continued aggregated savings across the organization. When initially awarded the program more than a decade ago, our client wanted to ensure that we could continually innovate the program and provide actionable cost savings recommendations that would continue to yield results year over year without affecting candidate quality or causing business disruption.

Years 1 to 3: Setting Up Success   

DZX knew establishing a deep partnership with our program sponsors and business stakeholders was a critical component to fully understand objectives and unique varying business needs. During the first three years, DZX focused on spending a lot of time getting acclimated and close to the client business and needs for the program to ensure continued success.

Our PMO and Program Management Team established a relationship matrix per business unit and corporate function to set up a cadence of weekly, monthly and quarterly meetings with the client’s hiring managers, financial leaders, and procurement and HR stakeholders. These meetings ensured we continually stayed in touch and remained abreast of their business needs in real time and as the program evolved. This would also allow us to be aware of upcoming projects, business unit and personnel changes and corporate initiatives so that we could prepare for their workforce needs as well as understand budget restrictions.

Additionally, DZX also set up annual strategic calls, as well as a roadmap allowing us to be prepared for every service  we offered our client including an IC Management Program we designed from scratch and beyond. Initially, we focused on standard Gen 1 cost savings processes, such as standardized rates and a volume rebate, which we were able to increase as spend continued to grow.

We also focused on a strong supplier relations partnership. Monthly and weekly meetings with the supply chain became part of the regular cadence. We wanted to ensure that the suppliers also understood the business needs and how the organization was changing regarding tenure limits, M&A and more, so that the suppliers felt like they were on site even when they weren’t. We implemented a go-live optimized supply chain and put together an IC market rate analysis for effective usage. DZX doubled the program savings from 1-2% within the first 3 years.

Years 4 to 6: Tenure, Overtime and Transitions   

The next three years, DZConneX  focused on increasing savings by capturing rogue spend which added more savings to the rebate.  We also helped support HR cost initiatives by implementing tenure limits, as well as a tenure discount. A transition discount was also implemented to prepare for pending M&A activity.

Additionally, DZX attained proactive savings in the form of discounted OT rates, a prompt pay discount and bill rate differential which captured the savings between requested requisition bill rates and targeted delivered bill rates. Also, through the success of our North America Program and successful savings, we began to expand globally and established a rate card spanning three regions with highly competitive rates per skill set to be utilized, benchmarked and re-evaluated every year.

Years 7 to 9: M&A Savings, Misclassified SOW And More 

Seven years into the tenure of the program, our client had significant M&A activity, so DZConneX started focusing on an M&A inclusion strategy and transition, resulting in major savings of more than $1M.  We also supported an audit and negotiated services procurement and outsourced delivery. Services procurement spend spiked because of temporary tenure limit restrictions, and the business tried to work around this through the use of misclassified temporary workers in SOW engagements.

We successfully supported our client to achieve a company-wide 5% reduction in services procurement spend. During this time, the supply chain supporting the program exponentially increased and, as such, critical optimization efforts were made each quarter to ensure the most competitive rates and delivery.

Years 10+: Innovation 

DZConneX focused heavily on innovation during year 10. We worked to improve the program through temporary and services procurement initiatives, supplier optimization and implementing demand management strategies. There were savings opportunities within multiple business units due to increasing levels of overtime for contingent workers.

In some cases, we  provided a more junior level resource to perform overflow work of a more seasoned person, and, thus, lowered the spend costs. We also introduced new proactive savings recommendations through Direct Sourcing and Contingent RPO solutions while leveraging our client’s strong brand. We also continued to increase aggregated savings through tenure, prompt pay, and rebate savings.  

The Client Impact (Summary)

It can be difficult to find cost savings if you’ve been within the same program for a few years, but DZConnex worked with our client to ensure that innovative cost savings types were included every year, resulting in a$1.5M average savings year over year, with more than $600K coming from the rebate that DZX put in place. We saw the opportunity for proactive savings and created a blended innovative hybrid sourcing/pricing model. We focused on adding a master vendor for some locations and skillsets with standardized mark-ups to ensure that we  not only had competitive rates, but the best quality talent.

Vendor neutral was the  route we took for other locations and skillsets, with not to exceed bill rate targets to ensure we got the right quality talent needed while still competitively sourcing for the best rates. We also identified savings opportunities for SOW delivery and outsourcing within the program – again, we were able to keep costs down with competitive rates year over year. We expanded the rebate program to include all contingent labor types under management- supplier recruited, payroll, IC, SOW  – which created aggregated savings across the organization. Lastly, we supported and managed permanent hire and special hiring projects, leveraging our RPO Team and their expertise to offer more competitive rates than engaging a separate RPO organization., which created ongoing cost savings. DZX was able to successfully find continuous savings without any major disruptions to our client’s workflow, resulting in $17M in savings to date.