IQNavigator and iTeam Partnership Bringing Service-as-a-Product to a Business Near You Andrew Karpie - May 7, 2015 10:32 AM | Categories: Industry News, Services Procurement & Contingent Labor, Solution Providers, Technology | Tags: L3, Technology It’s a service, it’s a product – no, it’s SaaP! The recently announced partnership between IQNavigator and iTeam (a unique service provider of specific on-premise IT services) should be carefully noted by contingent workforce category managers. It reflects the continuing substantiation and legitimization of an emerging labor services sourcing/fulfillment model (“productized services,” called by some SaaP or Service-as-a-Product). While similar in many ways to the already well-established model of SOW, SaaP is a model that appears to take things to another level – in terms of (a) current technology, process and performance as well as the longer-term implications of how this model might develop and extend. SOW on Steroids? Established SOW practices make possible the delivery of fully managed projects/specific outputs that are organized and executed through the efforts of a third party supplier in order to fulfill a unique set of business requirements. SaaP, by contrast, involves standardized, narrowly-focused, repeatable (often unit priced) small project or task execution offerings. The delivery/execution of SaaP projects or tasks is enabled by the third party supplier’s technology-based platform that supports (a) standard, optimized processes, (b) data analytics to drive process performance improvements and (c) potential for self-service, on-demand modes of consumption. Its iTeam, for example, represents its technology plant as: “An advanced system of ‘productization’ and structured management applied to the contingent workforce resource selection, work delivery process and work product. We utilize a combination of proprietary software, knowledge-bases, vetting techniques and process optimization methods that offer enterprises a better way to utilize contingent labor to deliver on-premise technology services. By anticipating the common things that go wrong in an on-premise event and building proactive steps into our delivery engine to mitigate them before they occur, our exception rates are 10x-20x lower than traditional workforce management approaches.” Though we have not validated it, iTeam’s self-description helps us to clarify what underlies a SaaP model and what significantly distinguishes it from SOW. SaaP turns out standard service outputs like a manufacturing process, while SOW functions on what amounts to a “craft” basis, turning out essentially custom projects. Is SaaP Real? While it could be conceptualized and talked about in different ways (now, “SaaP” lingo is gaining popularity), the sourcing/fulfillment model appears to have legs and is up and running in a number of variants. Further, even though iTeam has developed its own unique SaaP platform based processes and offerings (focused in specific areas like Networks, VOIP, Digital Signage), the SaaP model is being pursued in different ways by other companies. One example, also focusing on serving enterprises, is SourcePanel, which operates on a slightly different model that connects businesses to the SaaP offerings of small, vetted IT services providers. Another example with a still different model is Visual.ly, that specializes in delivering a range of standard “graphics production” outputs to businesses. Lionbridge OnDemand is another example, with its SaaP types of offerings for translation and localization. Lionbridge wrote a nice guest post on SaaP on Spend Matters here. Other online freelancer platform or crowd-driven models (including Fiverr) are also pursuing this productized service model. Certainly, SaaP models are appearing and being operated in many forms and are demonstrating that standardized (productized) service offerings, enabled by a range of different technology-based platforms, can be successfully delivered/fulfilled to clients. So SaaP models are real, and they are likely in an early stage of development. SaaP in Our Labor Supply Chain Future? What is perhaps most significant about the IQNavigator/iTeam partnership is that it represents one of the first labor supply chain linkages between enterprises and SaaP-like providers and suggests the possibility for expanded enterprise labor sourcing/consumption in the form of “services” versus “individual workers.” While the lumbering SOW model has clearly led the way in this direction, the technology-driven SaaP model suggests a broader set of opportunities for how labor services can be flexibly consumed in the enterprise as “controlled spend.” Similar to how e-procurement and e-catalogs have arisen and taken root in the physical supply chain for sourcing and consuming products, SaaP may also be the precursor to something comparable in the procurement of services – in particular, services that consist largely of labor yet have other elements of delivery. This could be the big break we’ve been looking for to truly drive increased spend under management for complex, project and metered services. The involvement of an enterprise VMS platform and labor services ecosystem builder like IQNavigator would seem to suggest that such developments are underway. Indeed the future of enterprises procuring labor in a variable, non-employee labor is likely to look a great deal different from the one that prevails today, dominated by “rent-a-body” staffing suppliers. The managed contingent workforce supply chain of the future is likely to also encompass not only self-service, digitized “rent-a-body” supply of labor and talent supported by FMS and talent pools, but also a very broad range of “SaaP” models and the wide range of different labor and talent services that they can enable. So if you are thinking: “Huh? SaaP in our labor supply chain?” Perhaps you should be thinking about how to be making it happen, before you find that it has muscled its way in on its own. Voices (2) Andrew Karpie: 22.06.2015 at 7:03 pm Hi Marc, Thank you very much for your feedback on the article and for your incisive questions. Super–I will address them near term in a post or two. Short answers: most consumption of these services is direct (does not go through controlled procurement (let alone VMS channels). There are some exceptions like this one or where there has been integration with VMS from field services tech providers like Field Nation, OnForce… But even then the integration has been really to make the VMS the system of record, not to configure a real Source-to-Pay/Purchase-to-Pay process that extends to the direct buyer. Beeline now seems to be moving in this direction, technology-but initially for sourcing individual workers, not service outputs. In time it will come–at this point, I think we may be 2 years out. Platforms delivering productized service outputs, when I last looked analytically, seemed to be growing slower (numbers and spend) than I would have thought–this needs more analysis. I am not sure that the classification issues are driving demand for SaaP deliverable at this time. I think the main reason is that SaaP types of platforms and the whole category of platform-based work delivery is not on the radar yet of most procurement organizations. Kind of like the tree falling in the forest with no one there to perceive the benefits of arms length arrangement similar to SOW. Also, I think these kinds of platforms (like Applause in your neck of the woods) have not yet reached the Uber stage of being forced to deal with those issues that still apply to them or they have (unlikely in most cases) structured their own freelance work arrangements adequately to avoid classification issues. I’ll take all this up in in some future writing. Best, Andrew Reply Marc Osofsky: 22.06.2015 at 9:38 am Andrew, Great post. Very helpful to see the broader trend towards productization of services across multiple spend categories. I’d love to hear the Spend Matters take on some of the questions with which I am struggling as this transition takes hold: Will SaaP providers go directly to business buyers with category specific portals or will SaaP become offerings within VMS? Which categories will be next to become productized? Do the growing legal issues with contractors being re-classified as employees create momentum behind the SaaP effort? Reply Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of follow-up comments by email. Notify me of new posts by email.