How Procurement at Gusto Went from Blockers to Business Enablers

Slow-moving and manual procurement contracting can give the department a reputation as a business blocker. Sid Ramesh, Gusto’s Head of Procurement, isn’t going to let that happen on his watch.

Gusto is an online payroll and HR platform that helps more than 300,000 small and medium businesses pay, insure, and support their hardworking teams with payroll, benefits, and more. Gusto’s size comes with unique challenges, like managing vendor relations, obligations, and purchasing for an organization with nearly 3,000 employees.

Sid has a vision to make the procurement process more efficient, impactful, and collaborative, and he uses cross-functional collaboration and Ironclad to make it possible.

The procurement team was siloed from the CLM

Through Sid’s previous procurement experience, he knows just how slow, tedious, and manual procurement contracting can be without the right tools. “I still remember past experiences going through cabinets and boxes upon boxes of files—physically trying to read contracts and make sense of agreements.”

A disjointed process makes it impossible to efficiently assess vendors, maintain compliance, control costs, and manage risk while working across departments.

Luckily, Gusto’s legal department was an early Ironclad customer, and Sid saw an opportunity to make procurement more efficient when he joined the organization.

“You’re trying to figure out what the lay of the land is. Legal had our initial engagement with Ironclad, so they already had the system in place,” he shared.

Sid noted that although the legal team used Ironclad to manage contracts, the procurement department was siloed and used a separate B2B platform to manage obligations. It was hard to align the two teams’ processes when people would send contracts or requests to the legal team in whatever form they thought was easiest, like email, Google Docs, or Jira tickets.

Collaboration and technology combine to improve procurement

Parts of the puzzle existed to transform the procurement team’s efficiency and impact, like a powerful CLM and a trusted procurement tool, Coupa. However, it was going to take more conscious effort to align everyone. Sid and his team took a multi-pronged approach to increase CLM adoption:

• Strengthening the procurement and legal teams by hiring more resources
• Working closely across departments
• Designing a contracting process that was easy for everyone

Now, the procurement process is fully supported by Ironclad, thanks to a few key features:

Coupa integration to improve efficiency

The Ironclad Coupa integration was the cornerstone of getting Gusto’s procurement department on board with the CLM. An early step in Sid’s collaboration with legal was “defining a very clear process that would integrate our B2B system with the contracting system to get that maturity going.” The integration lets procurement users initiate an Ironclad contract workflow from where they’re already comfortable working. Since the legal and procurement approvals process happens in tandem, there’s process compliance without slowing either team down.

Turn tracking to increase visibility

Understanding who holds the contract is critical for visibility and knowing who needs to make the next move. Turn Tracking lets everyone see who’s currently responsible for the contract and how long they’ve had it, so agreements don’t stagnate if each party assumes it’s the other party’s turn. Since all relevant stakeholders can check in on the process, the procurement and legal teams don’t need to manage constant status update requests.

AI playbooks to stay out of the legal queue

Workflows and AI playbooks let procurement teams customize approvals and processes for granular contract details, and Gusto is developing them.

CLM adoption has increased sixfold

In the past few years of making Ironclad a core part of the procurement process, Sid has recognized that it’s a group effort.

“Yes, we have the tool, and the processes are great, but all of this would not be possible if you don’t have the people to orchestrate and execute it. I lean on my team—my procurement manager, the legal team, folks in IT—it’s an entire village that needs to commit to getting contracts done in a timely manner by using the tools and functionalities. And then gradually building the relationships and credibility with internal stakeholders.”

The effort has paid off, though, since they’ve increased the number of contracts going through Ironclad sixfold in a year. Instead of siloed teams and underutilized tools, Ironclad is a single source of truth for all supplier transactions.

“How much control and oversight do we have over the entire supplier ecosystem? Some of it was totally lacking a year back. But we are expected, more and more, to have those controls and regulations,” Sid added. The team also tracks all spending and savings going through procurement contracts. The result is a cross-functional collaboration that turns procurement into an efficient and repeatable process with granular visibility.

Sid’s final advice to others is to forge strong internal partnerships and work with your tech partners to innovate. “Don’t hesitate to push your providers and solution partners. Continuously partner with them to innovate together because there’s a lot of value to unlock together that might impact the broader ecosystem.”