Cheryl Rowden was not a big believer in e-procurement. Sure, she had heard the stories about the savings and efficiencies gained with e-procurement, but as director of IT finance at the 40,000-employee Verizon Wireless of Bedminster, N.J., Rowden was not ready to risk investing in some fly-by-night software for a quick short-term savings. That's not how IT finance directors think.

"To be perfectly honest, I needed to be convinced to do this," Rowden admits of the early forays into e-procurement. "I am not a huge proponent of using software solutions to solve my problems. But with the merger the size of the one that created Verizon and its wireless subsidiary, the organizations were left with some challenges in becoming one well-functioning business. And getting our arms around all the ways that money was being spent was something we needed to do quickly."

One area that Verizon knew it could consolidate its spend was in the hiring of consultants and contract labor. The newly combined Verizon relied heavily on consulting work. Consolidating that spend through one software system to avoid redundancy offered a good chance for savings and manually hiring consultants made expenditure tracking nearly impossible.

To get the project started, Verizon invited several software providers to give presentations and there was one that stood out specifically for its capability to hire contract labor. Chicago-based Fieldglass' InSite application creates a virtual private marketplace where service providers can bid on consulting contracts. Verizon decided in May to start a 60-day pilot program with the ASP-based software provider and start overhauling the typical hiring process for consultants at Verizon. The online marketplace also automates the manual process of data collection for more in-depth analysis.

Using the Fieldglass system, the hiring manager creates a job requisition or work order for a new consultant and then circulates it to their management staff for financial and budget approval. Once it is fully approved, the requisition is sent to several providers and they bid on the contract, knowing it is being sent automatically to a variety of providers, which makes the bidding much more competitive. In the past, Rowden says, the typical practice was to source a contract to only one provider, decide on an employee, then work to get internal approval.

"Now, when the requisition goes out, it goes with a target cost, which is made up of an average rate for this type of position," says Rowden. "But even in its initial pilot run, it was clear to our providers that this was a truly competitive environment and we received many resumes under target." Other benefits include reduced overtime premiums, improved data collection, and more effective contractor demand aggregation.

The pilot went so well that in October, Verizon entered into a multi-year agreement for the Fieldglass application. The pilot group has remained on the application and is running consistently while other regions are being brought onto the system. The implementation is being focused on geographic areas that do the most hiring and therefore will see the biggest savings. More than 1,600 Verizon buyers, suppliers and contractors will use the system when it is fully implemented.

"During the 60-day pilot, we realized more than $25,000 in savings with a group of 29 consultants. Going forward, the ROI model we use to measure and project savings contemplates a 50% phase-in of savings benefits in year one and 100% realization in year two. In both years, we expect to realize savings in the low to mid seven figures, as competition amongst vendors drives costs down," Rowden says.

She notes that there is a multi-tiered learning curve in moving to the automated system after so many years on a manual system. Hiring managers are trained on how to prepare a job requisition effectively in the system, personnel suppliers need to learn the system to retrieve requisitions and submit resumes, and consultants need to learn how to submit time sheets directly to the system.

"Our budget managers are being trained to look at the data to know if a requisition is within budget," Rowden says. "And they look at a time sheet to make sure the numbers make logical sense before sending it on to the supplier."

Word has already traveled across the parent company, Verizon Communications, and requests are coming in for more detailed information on Verizon Wireless' move to the Fieldglass system. "I have a lot of people internally in the organization calling me, saying, 'I hear you're doing something.' I suspect that once the finance organization hears how much we've saved, we'll get even more requests from other areas of the organization," Rowden says.