Siemens saves $17 million in external workforce spend and expands the program globally

Headquartered in Germany, Siemens is Europe’s largest electronics and electrical engineering company as well as the world’s largest provider of environmental technologies. The company employs approximately 348,000 people worldwide across its four sectors: energy, healthcare, industry and infrastructure, and cities.

In Need of One Unifying Solution

In the past, Siemens’ external labor was managed independently by divisions within the organization, each using a different Managed Service Provider (MSP) and technology solution. With this model, Siemens had no visibility into its flexible workforce or its annual costs. And, with more than four different technologies in place, the company had no way to conduct reporting across this workforce.

With a fragmented management process and multiple technologies in use, Siemens decided to implement a single technology solution to enable visibility into its workforce.

Implementation Built on a Strong Business Case

In 2009, Siemens’ procurement team spearheaded an initiative to centralize the management of the external workforce. To that end, Siemens deployed SAP Fieldglass Vendor Management System (VMS) in June 2010, beginning with non-IT contingent labor across its healthcare and industry sectors, and consolidated all programs under Randstad SourceRight as the MSP.

Because of the decentralized nature of Siemens’ external labor management, a mandated program change across all divisions all at once would have proved difficult. Instead, the company rolled out the program to each new area of the business individually, presenting a business case and demonstrating results for the greatest buy-in and user adoption.

Big Wins for the Business

Immediately, the solution helped to streamline many previously manual processes and activities associated with managing flexible labor. The company demonstrated proven value of the tool through cost savings and process efficiencies to expand the program across Siemens’ remaining sectors. Annual program spend has grown from US$90 million in 2010 to US$150 million in 2015, enabling results on a greater scale. Overall, Siemens has been able to save US$17 million since launching the program. Approximately US$400,000 of those savings was achieved by turning 200,000 paper invoices into consolidated electronic submittals.

Success Expands within the Enterprise

Today, the company uses SAP Fieldglass to manage approximately 6,000 external workers, accounting for approximately $150 million in annual spend. The program has expanded to include external labor and independent contractors across additional business units as well as within Canada and the United Kingdom.

Siemens has expanded its program to include independent contractors, additional IT external labor, and Statement of Work (SOW) spend. The company expects to double its current program volume with these expansions, and to derive further benefits with a deeper impact on the business. Siemens has also expanded its program outside of the U.S. The company implemented SAP Fieldglass in the United Kingdom and Canada, and is evaluating opportunities to expand into other services categories to drive continued growth.