Bob Rosetta

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IT Consultants – Staff Supplementation
Preferred Vendor Selection RFP &
VMO Implementation
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved.
May not be reproduced or distributed without written permission of J.P. Morgan Chase & Co.
Contents
 Background
 Objectives
 Preferred Vendor Selection Process
 Vendor Management Office (VMO) Implementation
 Critical Success Factors
 VMO Metrics
 Appendix
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 2
Background (Prior to Merger)
Heritage JP Morgan - Process and Stats
• Gatekeeper Model - 100 Vendors Engaged
•
12 Preferred Vendors in US
•
85% Compliance Rate
•
Function within Human Resources
Heritage Chase - Process and Stats
• Self Service Model - 400+ Vendors engaged
•
35 Preferred Vendors in US
•
40% Compliance Rate
•
Function within Procurement
EMEA – both heritage firms
• “Vendor on Premises” (VOP) model used – function outsourced to Hays (Chase) and Resource
Solutions (Morgan)
•
Function only covered procurement of independent contractors
•
Near 100% compliance for covered consultants and geographies
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 3
Background – (continued)
Both H-Chase and H-JPM (pre- 1999) fell victim to the inefficiencies of the decentralized self
service model
 Global vendor leverage: Too many vendors;lack of controlled buying; Rates agreed through POS
negotiations with project managers without leveraging firms global buying power.
 Commitment from vendors : Few vendors view JPMC as a preferred client
 Cost controls: Rate ranges varied widely across regions, skill sets, and business knowledge.
 Vendor metrics: Vendor quality was poorly or never measured. Vendor relationships were too
often based on the last consultant provided by that vendor.
 Workflow automation tools: Procurement and negotiation done by Project Managers over the
phone
 Consistency in vendor management: vendors poor performance with no consequence
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 4
Objectives
The primary objective of the new Preferred Vendors Program and VMO rollout is to provide
high quality, cost effective IT consulting services to the firm with sustained cost control over
our $650mm annual global spend.
Strategic Objectives
OPTIMIZE
COVERAGE

Ensure a steady supply of high quality SS consultants

Select preferred vendors for all major domestic locations who can
provide a broad-based, high-quality, steady supply of technical support
for JPMC applications and system on a T&M basis

Select a secondary-list of specialized vendors for “hard-to-find skills”

Provide representation of minority and women-owned business
enterprises (MWBE) amongst vendors

Classify preferred vendors as per three tiers – national, regional, and
specialty
Key JPMC requirements from preferred
vendors
Requirements
for pricing/rate
Per WAC-level classification
Cost-plus methodology
Tiered volume discounts
DECREASE RATES
IMPROVE
EFFECTIVENESS

Obtain most favorable rates

Develop new rate card pricing for all regions

Increase spend leverage by consolidating annual spend of over
$600 million with fewer vendors

Regional pricing

Improve quality and productivity of work provided by vendor personnel

Increase vendor accountability for performance of personnel

Decrease time spent by JPMC managers in acquiring/managing
SS consultants

Lower SS consultant attrition rate

Encourage vendors to invest in JPMC-specific infrastructure knowledge
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 5
Service-level definitions

Full-time recruiter

Dedicated account
representative
Business and legal terms

Vendor compliance terms and
conditions

JPMC Master Agreement for
consulting services
Objectives (continued)
The VMO will accomplish these objectives through a centralized managed service and supplier
community offering world-class breadth and depth of capability
• $650 million in leveraged rates
• Specific service level criteria
• Vendor Performance Management
• Standardized job classifications and pricing
Vendor Management Office
National
Tier 1 National Preferred Capabilities to Service All US
Domestic Locations. All
Consultant Requisitions from
ALL regions will be issued to
these vendors
Regional
LOB/Niche/
Specialty
Tier 2 Regional Preferred Support only the regions they have
been selected for. All consultant
Requisitions from within these
regions issued to these vendors in
addition to the Tier 1 National
Vendors
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 6
Tier 3 Line of Business /Speciality
Specific - UNIQUE
Capabilities/scarce skillsets to
service specific LOB’s; will receive
the requisition that originates from
the LOB in addition to the Tier 1
National Vendors and Tier 2
Regional Vendors - Restricted to
very limited use & approval by
VMO required
Preferred Vendor Selection Process
Develop RFP/
evaluation
framework
Formalize
distribution list
• Issue RFP
• Receive
Short-list
vendors
proposals
Activities
• Develop RFP to
be sent to
vendors
• Create vendor
evaluation
criteria and
scoring
methodology
• Set criteria for
• Send RFP
• Short-list
selecting vendors • Receive letters of vendors as per
• Select current
proposals from
vendor
vendors to receive
vendors
evaluation
RFP
framework
• Select new
• Involve regional
vendors to receive
IT management
RFP
in selection
Results
• Final RFP
• Vendor
evaluation tools
• RFP distribution list • 135 RFPs sent
with 135 vendors • 120 proposals
selected nationwide received
Status

Finalize
vendors


• ?? vendors
short-listed

• Negotiate with
short-listed vendors
• Select no. of
preferred vendors
targeted
• Choose top 55
vendors as per tiers
• ?? vendors
selected
• New regional
rate card by
skill/proficiency

 = Completed
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 7
 Preferred
Vendor list
 New Ratecards
Preferred Vendor Selection Process (continued)
TIER 1 National Preferred
Capabilities to service all US domestic locations. All consultant requisitions from ALL regions will be issued to these vendors.
TIER 2 Regional Vendors
Support only the regions they have been selected for. All consultant requisitions from within these regions issued to these vendors in addition to the Tier 1
National Vendors.
NY/NJ Regional
DE Regional
TX Regional
FL Regional
MA Regional
OH Regional
CA Regional
TIER 3 Line of Business / Speciality Specific
UNIQUE Capabilities/scarce skillsets to service specific LOB’s; will receive the requisition that originates from the LOB in addition to the Tier 1
National Vendors and Tier 2 Regional Vendors – Restricted to Very Limited.
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 8
VMO Implementation
The expansion of h-Morgan's existing VMOs to include all units with JP Morgan Chase
(JPMC) is a key recommendation of the Technology Procurement Project (TPP)
The key benefits include:
 Enable the firm to realize sustained cost control over our $650mm annual global spend.
 Cost savings through an increased use of preferred vendors and strict enforcement of exception
processing. Point of Sale (POS) negotiating eliminated through standard regional rate cards.
 Cost savings through adherence to rate cards and increased management of the vendors. The
VMO process utilizes a quarterly scorecard system to monitor vendors, enabling an active
management of them.
 Speed improvements by the implementation of a professional services automation (PSA) tool,
standardization of processes
 Quality and speed improvements due to the presence of professional recruiters ensuring our job
requirements are understandable and screening unqualified candidate from the PMs.
 Risk Management - Only qualified vendors are utilized and mitigate co-employment and legal risk
associated with temporary technology workforce employees
 Improve Project Manager productivity by relieving project management of recruiting burden
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 9
VMO Implementation (continued)
The VMO will be managed under the Strategic Technology Sourcing Organization and
will service all JPMC domestic locations through regional delivery teams
Senior
Sourcing Manager
VMO
Team Leader
VMO
Staff US
Approx.
Number of
Consultants
Percentage
of Total
Consultants
Number of
VMO Staff
Percentage
of Total
VMO Staff
Northern U.S.
(including NY/NJ
MA/PA/DE/OH)
2,745
84
8
80
Southern U.S.
(including TX/CA
FL/AZ/CO/TN)
512
15
2
20
Location
Areas Served
NY
TX
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 10
VMO Implementation (continued)
Roles & Responsibilities:
The VMO’s Regional Delivery teams are managed by IT, Sourcing, and Recruiting Professionals
that provide end to end support



Supplier Management
•
Selection/de-selection process
•
Identification of new Supply
•
Negotiates leveraged agreements
•
Creation of Global Master Agreement and ensuring contractual compliance
•
Financial and service level tracking
•
Supplier/contractor performance reporting
•
Vendor/Supplier relationship management
Account Management
•
Works with IT Community to understand needs and forecast skill-set demand
•
Implements managed program
•
Ensures effective delivery of program
•
Systems development and support
Resource Management
•
Responsible for delivery of candidates
•
Manages daily user/supplier interaction and work flow
•
Screens resumes and negotiates rates
•
Systems development and support
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 11
VMO Implementation (continued)
The VMO’s shifts the IT Consultant “Buying” process to a centralized managed service model that will
strengthen control around our $650mm annual spend, eliminate “point of sale” negotiations, enable stronger
compliance with preferred vendors program, pre-negotiated contractual rate cards, and stronger vendor
performance reporting.
Centralized Managed Service Model - “Gatekeeper”
Decentralized Operating Model
* see appendix for detailed process flow
Vendor A
Vendor E
•PM Contact Vendors
Vendor B
•“Point of Sale”
Negotiations
•Initiates On-boarding
•Send to Procurement
VMO screens
resumes and
sets up
interviews with
PM for qualified
candidates
VMO completes
task order, ensures
program/ rate card
compliance,
capture vendor
metrics
Vendor C
Preferred Vendors
prescreen
candidates and
submit candidate
resumes
•Create Task
Order
•Post Accept
negotiations
Onboarding
Team
Vendor Management Office ( VMO)
VMO contacts
preferred
vendors with
specific
requirements
•Interviews
Vendor D
PM interviews
candidates, and
sends decision
to VMO
PM submits
assignment
requirements
to VMO
National
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 12
Regional
LOB/
”Niche”
VMO Implementation (continued)
The expansion of the VMO’s shifts the procurement of IT Consultants to a centralized
managed service model. The “Rules of Engagement” are the guiding principles for the VMO
The VMO Will:
AD&IT PMs Will:
• Distribute consultant requisitions with detailed requirements,
including WAC/Level information
• Facilitate distribution of candidate resumes to hiring managers
& Facilitate scheduling of consultant interviews
• Negotiate new consultant billing rates
• Capture consultant WAC/Level, hire date, billing rate, and
vendor firm name in for purposes of reporting, analysis, and
calculating volume discounts
• Collect and maintain accurate and timely vendor and VMO
performance metrics
• Manage the relationship with each preferred vendor and
dynamically maintain preferred list to reflect vendor performance
and/or JPMC’s requirements
• Monitor the market place and make rate card adjustments as
required
• Collect and maintain vendor profiles detailing available skill
sets, locations, references, and contacts
• Qualify new and potential vendors
• Facilitate quarterly meetings with the vendors and provide them
with candid feedback based on their respective performance
metrics
• Manage and facilitate resolution of key issues and exceptions
• Facilitate contractual requirements/Exhibits
• Post ALL staff supplementation/T&M consultant positions
with the VMO through the PSA (any exceptions must be
approved by the VMO)
• Not communicate requirements to vendors directly
• Forward all direct or unsolicited vendor candidate submissions
to the VMO
• Direct all prospective, “non-preferred” vendor inquiries to the
VMO
• Manage the duration of the consultant assignment to not
exceed 12 months without prior approval from the VMO and
CTO
• Not directly engage independent consultants (“1099s”;
Contact your VMO administrator to engage an independent
consultant)
• Discuss all consultant inter-entity transfers, re-classifications,
requested rate changes, and separations with the VMO
• Communicate any vendor abuses of the VMO processes to the
VMO
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 13
Critical Success Factors
 Strong Top-down support- Senior Management Sponsorship
 Broad communication of new program and TPP Recommendation
 Senior LOB Management Support
 Development of Compliance Program
 Track LOB Compliance
 Stronger Limitations on Exception Processing
 Transition to VMO Program
 Firm-wide communications program
 Vertical Automation Solution
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 14
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Average Rate 2002
$815.00
$813.27
$813.47
$813.80
$812.53
$812.44
$810.62
$811.83
$808.77
Average Rate 2001
$1,005.00
$1,005.00
$1,005.00
$1,005.00
$1,005.00
$1,005.00
$1,005.00
$1,005.00
$885.00
$1,100.00
$1,050.00
$1,000.00
Average Rates
$950.00
$900.00
$850.00
$800.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Average Rate 2002
$815.00
$813.27
$813.47
$813.80
$812.53
$812.44
$810.62
$811.83
$808.77
Average Rate 2001
$1,005.00
$1,005.00
$1,005.00
$1,005.00
$1,005.00
$1,005.00
$1,005.00
$1,005.00
$885.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Average Cycle Time 2002
5
7
10
10
10
15
12
14
10
Average Cycle Time 2001
21
21
21
21
21
21
21
21
21
25
20
15
Average Cycle Time
10
5
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Average Cycle Time 2002
5
7
10
10
10
15
12
14
10
Average Cycle Time 2001
21
21
21
21
21
21
21
21
21
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 15
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Avg Resumes Per Req 2002
3
3
3
3
3
3
2
3
3
Avg Interviews Per Req 2002
2
3
2
3
3
2
2
2
2
Avg Resumes Per Req 2001
12
11
8
8
9
8
9
9
9
Avg Interviews Per Req 2001
4
4
3
3
3
3
4
3
3
13
10
Avg Resumes / Interviews
7
4
1
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Avg Resumes Per Req 2002
3
3
3
3
3
3
2
3
3
Avg Interviews Per Req 2002
2
3
2
3
3
2
2
2
2
Avg Resumes Per Req 2001
12
11
8
8
9
8
9
9
9
Avg Interviews Per Req 2001
4
4
3
3
3
3
4
3
3
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 16
Appendix
 Preferred Vendor Score Card
 VMO Process Flowchart
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 17
Preferred Vendor Score Card
Preferred Vendor Score Card
20% Hit Ratios
20% Customer Satisfaction
25% Adherence to JPMC Procedures
15% Adherence to Rate Card
10% Financial Processing
10% Responsiveness/Efficiency
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 18
VMO Process Flowchart
Manager
Create Job
Requisition In
No
Validate
Request
w/VMO
Validate
Request
w/VMO
Consultant
Acceptance
Yes
Designate
Interview team/
Provide
Interview Times
Interview
Consultant
No
VMO
Review &
Approve
Job
Requisition
Verify
WAC/LEVEL
Job Match/Rate
Rang
Discuss w/Mgr
Format Job
Requisition/
E-mail to VMO
Vendors
Receive
Candidate
Resumes
Screen
Resumes
Update
Worksheet w/
Candidate,
Vendor, Interest
Date
Contract?
Yes
Extend Offer
To Vendor
Verify
Negotiate Rate
Coordinate
Interview
•Enter ATS
•Check for Prior
Submittal
Review Job
Description /
Search for
Consultant
Forward
Candidate
Resumes /
Rates
Copyright © 2002 J.P. Morgan Chase & Co. All rights reserved
Page 19
Provide
Consultant
Interview
Times
Consultant
Interview
Consultant
Acceptance
To CBS
Onboarding
Process
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