Fieldglass — Expanding the Services Procurement Pie (Part 2)

Last week, I started my investigation of Fieldglass, the platform vendor that my research suggests is the largest and fastest growing software-only provider in the services procurement market (in contrast to other services procurement software providers like IQNavigator that deliver both the platform and enabling services, but will also separate out the two if requested). As I mentioned in my first post, much of Fieldglass' growth in 2008 and so far in 2009 has been due to their ability to thrive within the MSP provider ecosystem (and becoming the new platform in a significant number of Chime's former customers). Given this, it should not be a surprise that Fieldglass plans to continue, in their words, "to promote [the] Fieldglass model and importance of separating the program and technology" as a central component of their go to market strategy throughout the rest of the year.

But what else does Fieldglass plan to do? They're expanding their model to provide program office support including analytical and benchmark driven reporting and data across the contingent labor (and even full-time hire) lifecycle. They're also building out their toolset to incorporate new decision support tools and business intelligence, benchmarking and data analysis. With a focus like this, it might seem that Fieldglass is content taking a backseat once they're working inside with a customer, leaving all of the interaction to their services partners.

But Fieldglass actively stays on board with clients just as any mission critical application provider would, providing operations/process services and business analysts (in addition to standard support and account management) to help their users get the most from their application. They also offer a services command center that helps organizations to better realize savings and services management objectives. As part of this effort, Fieldglass provides proactive reporting to help companies visualize and review programs and progress while also drilling into specific data through analytical tools and reports, working in tandem with MSP partners.

One of the advantages that Fieldglass has over Click and other pure software approaches where MSPs are not directly part of the selection equation is that they can bundle the fees for the application into the broader contingent labor agreement(s). In other words, companies do not have to pay for Fieldglass out of their capital budget -- suppliers can, in effect, self-fund the program (but we all know this is just moving money around). While I have not done a deep analysis of price points for software in the market, I would hypothesize at this point that providers like Fieldglass can command about one-third of the overall deal pie when they go in with an MSP with volume-based pricing.

I'd posit that this would work out to somewhere between 80 to 120 basis points (.8%-1.2%) based on the situation. Most of Fieldglass deals are pulled through their indirect sales channel today, coming from their MSP channel partners (and getting lumped into the 2-3% costs -- usually paid for by suppliers -- that are split between Fieldglass and an MSP or multiple MSPs). Yet the largest deals, Fieldglass suggests, still tend to "come at us directly". On these types of broader scale opportunities, Fieldglass tends to contract directly with customers versus through an MSP.

From a customer usage perspective, Fieldglass takes a broader approach than most providers in offering different options. As part of the application, Fieldglass delivers a decision wizard that can help show individuals who need to requisition the different options available for achieving the desired result. For example, to solve a specific need based on budgets and other factors, a user can explore the potential advantage to hiring a contingent worker, pursue a statement of work approach or make a direct hire (possibly from a talent pool that is only available to the specific organization). In the last regard, Fieldglass is working with some customers that are leveraging retired workers with expert skill-sets, using the application to manage the requisitioning of previous human capital assets. One company has had 1,000 retirees sign up to be part of the program (perhaps as a response to the falling values of their retirement accounts -- a perfect time for a symbiotic rejoining of retirees with their former employer (for a set period of time).

Fieldglass, like other providers, offers numerous templates (including from its partners) to help users rapidly tailor an RFX for a particular type of hire or requisition (including the previously mentioned temporary workers, SOW, and permanent hires). Based on the level of control a company wants to set -- or based on certain thresholds -- the entire process can be automated or it can require manual intervention and approvals. One of the real strengths of Fieldglass is how it can guide hiring managers to particular outcomes, steering them through nuances of different types of talent contracting arrangements -- even ones that we don't tend to think of managing in a services procurement platform. In this regard, while no tool would ever replace the work of an outsourcing advisory and sourcing firm for very large deals, the application itself can help automate much of the requisitioning and management processes for more run-of-the-mill outsourcing and offshoring efforts.

Stay tuned for additional commentary and analysis as this series on Fieldglass continues later this week. In the next post, we'll take a deeper look at Fieldglass' end-to-end capabilities (e.g., analytics, requisitioning, compliance, workflow, etc.) and how some of these areas stack up in the broader market. We'll also examine some of the broader trends within the services procurement market and how these might impact Fieldglass, specifically.

- Jason Busch

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