Kim Koster, vice president of GovCon Strategy at Unanet, co-author of the 2020 GAUGE Report and GovCon Expert, has published her latest article on Friday as a member of Executive Mosaic’s GovCon Expert program.
For today’s article, GovCon Expert Kim Koster has detailed the challenges facing supply chain executives as the compliance requirements, such as CMMC, have drastically changed as a result of enhanced telework capabilities and the impact of the COVID-19 pandemic. More importantly, Koster has highlighted many of the benefits government contractors have discovered due to these changes and update management platforms for a post-pandemic world.
“With so many clear benefits emerging from cloud-based subcontractor management platforms, it’s time for executives to shelve their legacy ERPs and disparate data systems and step into the future of subcontractor management. Modernizing subcontractor management systems allows prime contractors to gain the operational insight to drive better experiences, manage subcontractors, unlock profitability, and maximize their organization’s true potential.”
You can read Kim Koster’s latest GovCon Expert article below:
Rethink Subcontractor Labor Management
By GovCon Expert Kim Koster
In 2021, “change” is the word of the day. With much of the global labor force transitioning to remote work and virtual collaboration, the modern workplace has radically transformed from what it was just a year ago. This shifting landscape has only compounded the challenges faced by supply chain executives, who must also adapt to rapidly changing compliance requirements like CMMC updates and the CARES Act, as well as supply chains growing more complex by the day.
Prime contractors are overwhelmed by manual processes and isolated legacy systems. Scattered data and chaotic spreadsheet workflows create a lack of visibility into subcontractor costs and performance, which impacts financial reporting and project execution. Ultimately, supply chain executives are losing time and money, while opening themselves up to risks of non-compliance with DCAA, DCMA, and CMMC.
These challenges are just a few of the reasons why today’s supply chain executives are turning to technology-driven tools to deliver high-quality outcomes in a timely, proﬁtable manner. By gaining greater productivity and improved visibility into their firm’s financial and operational data, prime contractors can execute their daily tactical and strategic responsibilities in a more efficient, transparent, and intuitive way.
Here are some of the benefits government contractors have unlocked from their modern subcontractor management platforms:
1. Improved Efficiency
Legacy ERPs and a multitude of point tools require time-consuming and error-prone manual processes to operate. Automating basic business processes allows government contractors to better manage their business so they can deliver projects on time and on or under-budget, as well as capture operational efficiencies that readily scale across their enterprise.
2. Increased Profitability and Cash Flow
For subcontract managers, anything less than complete visibility means leaving money on the table. Budgeting and forecasting of procurements are part of many modern subcontracting solutions, which enable better and more accurate resource planning and allocation across multiple subcontractor teams. Instead of wondering where their money is going, executives can leverage data to constantly look for ways to further optimize procurement and increase cashflow.
Quicker and more accurate invoicing is proven to shorten the cash cycle by 4-8 weeks, while freeing employees from laborious manual tasks also allows them to focus on growing business and driving profits, putting more money in the firm’s pocket.
3. Reduced Compliance Risk
Rather than fear non-compliance navigating a sea of disjointed spreadsheets, supply chain executives can now rely on a solution that is purpose-built for GovCon. Modern subcontractor management platforms ensure the subcontractor process is compliant with all relevant regulations including: DCAA, DCMA, and CMMC, thanks to accurate timekeeping and expense reporting.
4. Gained Visibility
Organizations can’t get to the next level when they are resourcing and sourcing in the dark. Subcontractor management solutions offer 360° day-to-day visibility and real-time insight into utilization, resources, funding, cash, revenue, and profits. This lets executives turn information into actionable insights, helping to drive better decision-making and nurture business growth.
5. Ensured Accuracy
Legacy processes require manual reconciling and re-reconciling data to get subcontractor labor and expenses approved and billed. This often introduces error into the financials. A modern subcontractor management platform allows subcontractors to onboard and authorize resources directly through an online portal, delivering vendor invoices and project cost information in real-time. Greater data accuracy means more accurate invoices and improved operational efficiency, allowing executives to avoid time-consuming errors caused by disparate systems.
6. Streamlined Accruals
Accounting accrual nightmares have unfortunately been a regular headache for supply chain executives and accounting professionals in the past. However, modern cloud-based platforms allow you to avoid manual processes, journal entries, and lengthy reconciliations by automating the flow of information. Subcontractor actuals are available in real-time for financial and operational reporting, eliminating the need for estimated accruals.
7. Automated Reporting
Subcontractor managers often struggle with establishing and reporting KPIs for their projects. Now, cloud-based platforms allow subcontractor inputs to flow seamlessly into key reports like the NASA 533 as well as EVMS data. Reports support drill-down to the transaction line item and show metrics for up to three definable period ranges, giving executives access to real-time project analytics and insights.
With so many clear benefits emerging from cloud-based subcontractor management platforms, it’s time for executives to shelve their legacy ERPs and disparate data systems and step into the future of subcontractor management. Modernizing subcontractor management systems allows prime contractors to gain the operational insight to drive better experiences, manage subcontractors, unlock profitability, and maximize their organization’s true potential.
About GovCon Expert Kim Koster
Kim Koster is Vice President of GovCon Strategy for Unanet, a leader in ERP software purpose-built for government contractors. She supports GovCons in their effort to streamline project management, accounting and other businesses processes. She co-wrote the GAUGE Report with Christine Williamson, senior partner of the Government Contracting Practice at CohnReznick.