Service Spend Analysis of Firm Xxxx

Subject: Services Spend Analysis

1.

XXXX is an engineering and research company. Accordingly, there are many procured services that support daily operations. The following exercises will discuss procurement in services and Human Resources. XXXX’s HR service provider provides employee recruiting, distribution of employee benefits and employee contractors. The business process outsourcing of Human Resource Management is a critical operation that warrants examination.

The HR Service Provider manages contract employees for XXXX. Professional contractors who work at XXXX consume significant spend activity. The contractor may serve in a variety of specialized occupations and non-technical positions. Depending on the job, the hiring of a contractor may be considered both direct and indirect spend for the services rendered: engineering, quality, information technology, supply chain, human resources and others. Professional occupations working directly with production materials will proportionately have a higher weight as a direct spend activity; while employees in Finance that provide support services are indirect spend activities. As such, the HR service provider is an important vendor that is able to source technical staff for XXXX that the local market may not provide.

2.

This section will discuss the steps to conduct a spend analysis for HR Services. The ERP can be used to export Purchase Order data that can be used to generate metrics, charts and useful analytical tools. For the purpose of this assignment, an Excel report can be downloaded regarding the hiring of professional contactors. The purchase orders represent the annual or quarterly spend on salaries for each contractor. After consolidating the value of purchase orders and noting the number of purchase orders in the past 3 years, a trend in spending activity can be apparent.

The HR Service provider for XXXX is a single source vendor for employee contractors. In a recent analysis on the salaries of employee contractors, total spend and number of PO transactions increased from 2010 to 2012. The renewal of employment contracts caused many repeat purchases for contractor services and the number of employees spiked in the company. The data suggests that some purchase orders could be consolidated; some professional