Beeline's observations suggest that the Japanese contingent workforce and services procurement market is relatively immature. In Beeline's words, the "majority of existing solutions are master vendors covering single/limited skill set categories" and the "only technology used has been local products with limited functionality." In the Japanese market, MSP solution approaches are increasingly being considered for both staffing and SOW spend areas. Supplier-funded models are appropriate in Japan, Beeline suggests, if requested by the buying organization (and suppliers must bill clients directly). In terms of overall regional hurdles, the Beeline team believes that legislation has been a barrier to adoption of solutions and the intricacies of local labor laws and practices (Jiyuka) needs to be understood by all parties.
Within the Asia Pacific region, India presents the largest services irony. Even though the country is a BPO leader, it is "highly immature," according to Beeline, in services procurement investment in the VMS and MSP areas. There is rising interest, however, in SOW enablement at the moment (as well as general VMS usage to "manage high volumes" of spend). For contingent workforce BPO, "master vendor type arrangements are more prevalent than pure MSP/VMS," Beeline observes.
The Indian market faces a number of challenges, including available supplier margins to fund models in which vendors pay VMS and MSP fees. In this regard, "most" Indian staffing and services firms "operate at single digit margins." Technology integration also presents a material challenge given the "huge amount of manual processes in Indian supplier companies." There is also a "dependence on SOW type of work via the major tech companies due to lack of Specialist IT contractor companies," the Beeline team offers up.
In marked contrast to firms like Accenture, which uses a VMS to manage revenue-based resources, it is safe to say that in India, BPOs and outsourcers are using manual approaches. And we all know the limitations (and reduced speed) of this approach!