The cyclical nature of the semiconductor business makes it prone to staffing changes. When business is up, hiring is frenzied and contract labor is in high demand. When times are bad, layoffs are common and contract labor is minimized. Keeping track of the comings and goings of these temporary employees can be difficult if the data are not centralized.

Texas Instruments of Dallas was certainly victim to those hiring trends in the early 1990s. At times, TI could not hire fast enough, nor could it gather the information it wanted on its contract hires, many of which had already worked for TI in the past.

"We needed to track things such as when the contractor worked here last and what we paid that contractor," says Luther Harris, director of purchasing at TI. "They may have left the company three months ago and were asking for a 20% pay increase when they came back the next time. We just didn't have the data on that. Our systems didn't support that and we were looking for a way to improve that."

With the growth of the Internet, TI decided that it would use an online system to procure its contract labor, both to streamline the procurement process and develop an online repository for contractor data. So TI started investigating the models available. For example, the online marketplace model got a look, but TI officials felt not having a company or agency responsible for the employee hired was too risky. There were other consortium-type models that had a third party linking a number of contracting firms to provide a wider variety of hiring options. But, again, TI did not like dealing with a third party instead of directly with the contracting firm, in case there were issues that need to be addressed.

"Our objective was to find a system that allowed us to use our standard contracts that are uniquely designed to meet our needs," Harris says. "We wanted to use a system to manage the relationship but not control the relationship." TI eventually had formal reviews of eight or nine systems and put RFPs out to five of them between August 1999 and February 2000. The winner was San Francisco's CascadeWorks' Clarity system. The Clarity system provides tools for vendor identification, selection, screening, ranking and evaluation. TI adds whichever vendors it wants into the system

TI's implementation started back in October 2000 and targeted the facilities group. That group was first because it was considered an isolated supply base that accounted for about 30% of TI's contract labor spend. If there was a problem with the new system, it would not overlap into other hiring areas. But according to Harris, the implementation went very well.

"Guess what? The facilities people love me now. And three weeks after the facilities people got up and running I had the IT people come down and ask if I can move up their rollout. I have had three business groups ask us to accelerate their rollout."

TI expects to save from 5-8% on its annual contract labor and consulting services spend through reduced billing errors, streamlined procurement processes and increased use of negotiated vendor discounts. The Clarity system integrates with TI's accounts payable system to trigger payments based on approved time sheets or consulting expense reports, streamlining the process and minimizing billing errors.

One of the biggest efficiencies gained with the new system is getting newly hired employees into the system and working. In the past, it took three different systems to enter a contractor into the company database, provide an IT password and get them a security badge. With Clarity, the initiation of an agreement to hire a contractor or the addition of a consultant automatically triggers an internal notification to supply a security badge when and where needed, or to request systems access based on the worker's needs.

Now that facillities is up and running, TI is expanding the implementation into other business units that procure contract labor. The calculator group was rolled out in December and there are six groups planned in January and another six planned in February. The U.S. operations are expected to be fully implemented by April and the worldwide offices are next. Eventually, TI expects to have 100% of temporary staffing bought and managed through the system.