SAP Fieldglass Enterprise Risk Management Guide

SAP Fieldglass Enterprise Risk Management: The Definitive Guide for Contemporary Workforce Governance

SAP Fieldglass is a cloud-based vendor management system that offers organizations complete oversight and management of their external workforce. Beyond workforce management, the system also integrates multiple other critical functions of risk governance.

This guide offers a complete perspective for procurement leaders, HR leaders, and CFOs, that identifies the most important features of SAP Fieldglass and how the solution can be utilized to achieve operational workforce requirements in a manner that is compliant, risk-managed, and cost-efficient.

What Is SAP Fieldglass? A Brief Overview

SAP Fieldglass is an intelligent, cloud-native solution for managing services procurement and external labor. Founded in 1999 and acquired by SAP in 2014, Fieldglass has rapidly developed into one of the most popular VMS globally and now serves customers in manufacturing, financial services, healthcare, retail, and technology.

Some of the main functions offered by Fieldglass include:

• Management of the contingent workforce: monitoring temporary employees from the requisition phase to off-boarding.
• Management of SOWs: managing project-based work from external agencies.
• Vendor performance analytics: assessing supplier performance, compliance, and expense.
• Pre-built integrations to SAP S/4HANA and SAP SuccessFactors: combined workforce analytics.
• On-the-fly reporting and track-and-trace audit capabilities: governance-grade documentation of every worker case.

Unlike the competition, the comprehensiveness of its enterprise risk solution — covering operational, financial, and cyber risk — has set Fieldglass apart from its rivals in the current market.

SAP Fieldglass Vendor Management System: The Risk Foundation

SAP Fieldglass Vendor Management System is the enterprise risk governance system of record. It is popularly said that vendor relations are the most overlooked risk factors for any enterprise. Noncompliance of a single contractor, an unmanaged vendor, or a vendor with expired insurance can create legal, fiscal, and reputational risks for any enterprise.

Fieldglass solves these problems through several key capabilities:

Centralized Vendor Onboarding and Qualification

When vendors enter the Fieldglass ecosystem, they must undergo a comprehensive process for onboarding. Organizations can set their requirements — such as business licenses, insurance certificates, vendor diversity, and compliance documents — before a vendor can post employees. This helps companies do away with email-based, ad-hoc vendor management systems and provides a process that is both defensible and auditable.

Vendor Scorecards and Performance Tracking

The risks associated with suppliers do not end with the suppliers' onboarding. Fieldglass offers a continuous vendor performance evaluation system with customizable vendor scorecards. Hiring managers and procurement teams have the ability to score vendors based on ratings such as quality, delivery timelines, and responsiveness among others. This offers organizations the tools to create a dynamic risk profile on each vendor. Poor performing vendors can be restricted or removed from the preferred vendor list before they can create negative impact downstream.

Multi-Tier Supplier Visibility

For organizations with a complex and multi-tier supply chain, Fieldglass provides visibility beyond Tier 1 vendors to sub-contractors. This is especially valuable for organizations with compliance requirements for legislation such as the UK Modern Slavery Act or the California Transparency in Supply Chains Act.

Cybersecurity in SAP Fieldglass Vendor Management System

The larger the external workforce, the larger the attack surface. Because contractors need access to enterprise systems, sensitive data, and even customer-facing applications, they can represent a cybersecurity risk and a governance risk if not properly managed. SAP Fieldglass vendor management system cybersecurity features aim to address these risks.

Role-Based Access Control (RBAC)

Fieldglass's RBAC feature provides fine control over access and ensures that contractors and vendors see and participate in only the relevant data and workflows of their work. Access rights are linked to worker status, expiring when the worker no longer has active status, thus reducing the risk of insider threat.

Automated Worker Offboarding

Fieldglass provides automated workflows to offboard employees, initiating the worker access deprovisioning, badge, and equipment return as soon as their work engagement end date or contract termination date is reached.

Compliance and Background Check Automation

Fieldglass seamlessly integrates with external systems for background check and compliance verification, allowing companies to implement background screening and compliance checks as prerequisites for contingent work engagement. This is crucial for controlled and regulated industries.

Audit Trails and Data Governance

For every action taken in Fieldglass, be it an approval or update, there is a timestamp metric. This helps companies with their internal audits and inspections for compliance to regulations and provides frameworks for data governance, such as SOC 2 and GDPR.

Infrastructure for Enterprise Security at SAP

Fieldglass is built on SAP's enterprise cloud infrastructure. SAP customers benefit from extensive data encryption (both in transit and at rest), multi-factor authentication, SSO integration, and regular third-party security assessments. Thus, enterprises can be assured that the platform meets the enterprise-class security standard.

Financial Management Strategies of SAP Fieldglass

SAP Fieldglass is more than a workforce management solution. It is a financial governance tool for managing the most unpredictable enterprise spend — external labor — with discipline and transparency.

Expenditure Visibility and Budget Management

External workforce spend is difficult to manage. Contracts are arranged independently by departments, resulting in diverse and unstandardized invoicing. Fieldglass unites all contingent labor spend on one platform to provide corporate finance teams visibility on labor spend and empower them to manage forecast, committed, and incurred spend in real time. Fieldglass empowers budget owners with spend control at the department, project, or cost center level, with threshold alerts to pre-empt budget limit breaches.

Pricing Optimization and Benchmarking

Fieldglass has built-in tools to benchmark market pricing in contractor roles, comparing an organization's contractor pricing to role, location, and experience-based pricing. The insights help purchasing departments negotiate with suppliers while avoiding the risk of paying a premium for contingent talent. When employed fully, these insights can translate to a price reduction for contractors of between 10 percent and 20 percent.

Invoice Automation and PO Matching

Manual invoicing alone can put finances at risk. It can open ways for mistakes, duplicate payments, and even unauthorized payments. Fieldglass automates invoice generation based on approved timesheets and SOW milestones. Automatic PO matching and three-way reconciliation are part of the workflow. This helps speed up payment cycles and assists in securing early payment discounts with vendors.

Tax and Regulatory Compliance

Fieldglass helps organizations document the nature of every engagement. Increased scrutiny on the classification of workers has made documenting the nature of every engagement — whether employees, contractors, or workers on SOW-based projects — more important than ever. Proper documentation helps defend against tax authority audits on the classification of workers, helping reduce exposure to back taxes.

SAP Fieldglass in Liquidity Management

Examining SAP Fieldglass liquidity management demands an assessment of how well the platform allows users to plan, control, and optimize cash flows to external workforces — an area of financial management that is commonly undervalued.

Automated Accruals and Cash Flow Management

External workforce management poses a unique challenge to the accurate assessment of the company's obligations. This is especially so when contractors submit timesheets with delays in invoice submission. SAP Fieldglass solves this challenge through the automated accrual of approved timesheets. This automation enables the CFO to have a cash flow forecast to manage working capital — a notable feature of the platform.

Managing Commitments and Obligations

From the approval of a requisition to the payment of the final invoice, SAP Fieldglass views each engagement as a financial commitment. This feature provides the treasury team with a forecast of cash outflows to contractors through the commitment data that is incorporated into the financial planning systems via SAP ERP. SAP Fieldglass allows users to assess the liquidity impact of various workforce management decisions, such as increasing or decreasing the size of a project team.

Standardizing Payment Terms

Fieldglass's vendor management and invoicing features allow companies to align payment terms for their entire vendor base. With standardized payment terms, accounts payable teams benefit from less cash flow disruption. Standardized payment terms also help reduce the disruption that results from dealing with numerous vendors who invoice at different times.

SAP Fieldglass Contingent Workforce Management: Complete Control Over Workforce Engagement

Of all the capabilities offered by the SAP Fieldglass platform, the contingent workforce management module is by far the most popular. When organizations have to manage a large pool of contingent workers without a dedicated system, it creates a governance nightmare with compliance issues, cost overruns, and worker experience challenges that worsen over time.

Fieldglass offers a solution for the entire lifecycle of contingent workforce engagement:

Sourcing

Fieldglass offers an integrated approach to sourcing that eliminates informal and uncontrolled sourcing of talent that leads to the use of non-preferred suppliers. This is done through the structured requisition process. Hiring managers must make a requisition through Fieldglass and indicate their sourcing preferences along with other requisition details.

Selection

Vendors submit candidates directly on the platform, and access to the standardized candidate profiles facilitates comparison. This further optimizes the rate, experience, and availability metrics captured when submitting candidates, leading to an improved selection process and a reduced time-to-fill.

Onboarding

Fieldglass also guarantees that all contingent workers submitted to the clients are fully compliant and cleared to work by implementing a controlled process for submitting candidates. This is done through prerequisite onboarding steps that tool users must complete prior to contingent worker deployment.

Time and Expense Submission

Employees submit time and expenses via Fieldglass (or integrated mobile tools), and submissions advance via customizable workflows to the respective manager and cost center owner. Automated validations identify issues like duplicate submissions, excessive time, and unapproved expenses prior to invoicing.

Contract Changes and Extensions

Fieldglass executes a controlled workflow with complete audit documentation to manage contract amendments, extensions, and rate adjustments. This prohibits unauthorized extensions which result in undocumented fiscal commitments.

Knowledge Transfer and Offboarding

Once an engagement ends, Fieldglass initiates a process to formalize offboarding the user — including transferring any remaining deliverables, revoking access, collecting company property, and closing any outstanding fiscal commitments. This addresses the issue of "zombie contractors," employees who continue to invoice the company despite being no longer engaged.

SAP Fieldglass Vendor Management System for Contingent Workforce: Strategic Integration

The SAP Fieldglass Vendor Management System for the Contingent Workforce drives an organization's understanding of how vendor performance relates to workforce outcomes. Unlike many systems that view vendors as part of the procurement continuum, Fieldglass sees vendors as strategic talent supply partners.

Organizations can tier their vendor bases into preferred, approved, and restricted vendor tiers. Preferred vendors may be those who offer the best pricing, the best payment terms, and may have their compliance and performance validated simply by virtue of that preferred status.

This tiering creates a form of market competition among vendors where the best vendors win the most business. This competition provides organizations leverage and power to dictate the terms for how and when they use the vendor.

Why SAP Fieldglass Is the Gold Standard for Modern Workforce Governance

The combination of the most sophisticated governance features in the market and the ability to manage vendor risk, cyber, and financial liquidity creates the most holistic response to modern workforce threats of any Vendor Management System.

Organizations that excel in SAP Fieldglass don't just handle risk. They convert external workforce management into a competitive edge.

Conclusion: Cultivating Sustainable Workforce Governance with SAP Fieldglass

There is a guaranteed shift toward flexible, hybrid workforces. Along with this shift, new risks will inevitably arise — including, but not limited to, vendor non-compliance, cybersecurity gaps, spend leakage, and classification risk. Those organizations that manage these risks with a patchwork of spreadsheets, email, and other rudimentary systems will continue to accrue audit findings, budget defects, and failures of compliance.

SAP Fieldglass offers an enterprise risk management framework that is scalable and proven. Fieldglass combines vendor governance, contingent workforce management, financial safeguards, and cybersecurity into a single solution. This provides enterprises a confident foundation to work in the complex, ever-shifting, and global environment that we find ourselves in.

Fieldglass will become essential for career professionals to help build their expertise in the market, and especially for procurement leaders and technology decision-makers.

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