The 5 Keys to Maximizing Subcontractor Management Efficiency in OpenAir

Subcontracting is an excellent choice for completing projects with increased flexibility, reduced costs, added expertise, and the ability to maneuver the risks of hiring permanent employees. Subcontractors can help fill staffing and knowledge gaps for a professional service provider. However, working with contractors comes with its own set of challenges and complexities since they are outside the organization. Besides not being part of the organization, other complexities associated with subcontractors include the following:

• Tracking varying costs
• Managing availability
• Inadequate knowledge of their skill sets
• Temporary employment impacting software licenses
• Limited visibility of client/project list

Fortunately, subcontractor management is simplified with advanced PSA software like NetSuite OpenAir. OpenAir lets you oversee subcontractors and track and report their work efficiently throughout the project lifecycle. But how can you unlock the full potential of OpenAir for subcontractor management? Read on to find out.

Subcontractor Access

Access to OpenAir is essential for project delivery to be seamless, even for subcontractors. However, unlike users within the organization, subcontractor access should be controlled to a certain degree. There are two basic approaches for granting subcontractors access to OpenAir:

• User account issued to named resources from a vendor
• General vendor account issued with supporting fields on timesheets for individual user identification

It is worth noting that you don’t have to go for one or the other. You also have the freedom to combine the two approaches, which is great when you want to be more flexible in your environment. Knowledge of the vendor model for the subcontractor you’re working with is critical in selecting the access option. Is the subcontractor an individual? Are they a team?

Identifying Subcontractor/Vendor Account

Having granted access to the subcontractor/vendor, differentiating user accounts as vendors or subcontractors versus employees is essential. You can achieve this in two setup options—basic or advanced. The former lets you set up a custom field on the user for type, useful for either user accounts or generic users. On the other hand, the advanced setup option uses entity tags for type or employment status, which is useful for individual user accounts.

Access Tips

Some PS organizations can be apprehensive about bringing external resources, such as subcontractors, into OpenAir. Luckily, here are a few measures to take when granting subcontractor access:

• Limit permission sets by role (i.e., contractor role)
• Limit data views by filter sets
• Limit the ability to create or edit reports (by role level)

Also, be cautious of the auto-add feature for assignment groups. The feature automatically adds users to assignment groups, for example, all-employee assignment groups. When new users are auto-added, they inherit access to all internal projects. You don’t want to grant external vendors access to your projects, so keep them off the auto-add feature.

Resource Profiles

Skill profile is a feature widely embraced among OpenAir users. With the recent release of OpenAir, you can have skill profiles for subcontractors as you would with employees for use in searches and availability. You can set up subcontractor skill profiles in OpenAir in three ways:

• Set up regular user account access by the subcontractor to complete relevant profile
• Set up a generic user account to complete relevant profiles by vendor manager
• Search by hourly cost, a new feature letting you search subcontractors’ skills by the cost of resources

The other good news for the skill search option is you can now search both inactive and generic users. This means that even when your subcontractors are no longer active in your system, they can still be included in the search criteria. You can also use entity tags in your system, a great tool for tagging the types of users, employees, or subcontractors.

Cost Management

Cost management can get tricky with subcontractors. This is because their costs vary, and they are engaged on a demand basis. Still, cost management is essential for estimating and allocating resources. OpenAir provides for subcontractor cost management in three basic approaches:

• Cost entry as an expense item
• Purchase items using vendor POs
• Timesheet entry directly by the subcontractor

Please note that you can use more than one of the cost management options. You have the freedom to use all three depending on your needs. However, be careful when combining the options because it complicates reports and requires detailed knowledge of handling costs.

Timesheets

Keeping track of time is vital in ensuring efficient project management. The approach to timesheet management for subcontractors should be different from an employee. Time entries for subcontractors should consider the following:

• The access to projects should be controlled by task assignment or booking to ensure they only see the projects they’re assigned or booked to.
• Timesheet alerts should be optional. Subcontractors are not consistent, 40-hours-a-week people. So, it’s unwise to include them in scheduled timesheet alerts as employees.
• The ability to reconcile time entries and vendor invoice

Timesheet Alert Controls

Timesheet alert controls help you decide what vendors should be included or excluded from automatic timesheet alerts. These controls include:

• Scheduling to trigger
• Dedicating a department to subcontractors
• Timesheet required useful for staff augmentation type vendors

Cost Override Features

OpenAir simplifies the ability to track costs. Generally, you’ll have a single cost on a user, which works for everyone, especially if the subcontractor has a cost, and it’s consistent, not project-specific or task-specific. However, there are instances where a subcontractor may have expenses that change at project or task levels, and these costs must be accounted for, and this is where the cost override feature comes in. It lets you account for the following:

• Hourly cost overrides
• Project cost overrides
• Task cost overrides

Reconciling Vendor Invoices and Time Entries

Reconciling vendor invoices and their time entries is essential for ascertaining whether subcontractors claim payment for actual hours worked. It lets you go into timesheet time entries and filter different subcontractors, identify the time they entered for a period, and mark those times as invoiced or not. Reconciled entries can also be included in Cost Accrual reports.

Reports and Dashboards

As established, some of the reports can be made accessible to subcontractors. You can build these reports and share them with the subcontractors for them to run these reports on their dashboards. These reports often include scheduling and time. It is worth noting that granting full access to all vendor resources may require filter set creation for report support. Your visibility to vendor activity should include reports for:

• Vendor scheduling
• Timesheet compliance
• Time/vendor invoice reconciliation
• Time entry/cost by vendor account

Key KPIs to note and be featured on reports include plan versus actual time or cost, vendor skill sets leveraged, revenue ratio delivered by an employee versus subcontractor, and revenue forecasts by an employee versus subcontractor.

Bottom Line

The benefits of subcontracting are plentiful and significant. Subcontractors can help PS providers fill a skill or knowledge gap, control costs, access certain expertise, and adapt to economic cycles. However, subcontractors introduce certain complexities to project management. OpenAir lets you navigate the challenges of navigating the challenges of working with and managing subcontractors. The tips above can go a long way in helping get the most out of subcontractor management in OpenAir.

Need assistance with optimizing subcontractor management for your organization. Contact us to schedule a call with one of our team members.