Andrew Karpie and I have spent the past two days at Beeline’s customer event, speaking with dozens of people from all sides of the market — consultants, MSPs, customers and, of course, Beeline’s team, including a number of product managers. Andrew also attended IQNavigator’s customer conference the week before. At both events, a number of people we spoke with suggested how much they’d like to see greater coverage around the vendor management system (VMS) market. But as analysts with an eye on the future, we’d be remiss simply covering this market from an internal lens today.
In the coming months on Spend Matters PRO, we’ll be revisiting the VMS market in detail, including the providers (old and new) helping shape its future. But the VMS of the future will not just be about managing the basic lifecycle of contingent workers, from sourcing to offboarding.
Rather, it will encompass an expanded set of activities and capabilities, as well as improved intelligence at all levels of the talent and services buying and lifecycle management process. It will also bring yet another example of the movement away from “empty apps” in the procurement space — something both Coupa and SAP/Ariba have been hard at work at in the e-procurement space of late, albeit in different areas.
Here are five trends that we’re particularly excited about delving into in our coverage:
- The rise of supplier and contractor profile and risk management, including the management of contingent workforce, contractor and freelancer credentials and profile information (e.g., certifications, accreditations, risk profiles and more). Note: We also include firm-level supplier management and compliance components here as well. But the question remains: Will we see broader credentialing managed services such as technology-led ones like Vendormate (GHX), Avetta, Browz or rather, solution and consortia-driven models such as Achilles become the standard in the contingent workforce space? The geeks in us would like to see a blockchain-like architecture ultimately be used to manage this sort of information, tied to a platform-as-a-service (PaaS) model for sharing across diverse VMS and services procurement systems.
- An expansion of services procurement suites to support statement of work (SOW) and master services agreement (MSA) procurement efforts. This includes sourcing, contract management, supplier performance management, invoicing, payment and continuous improvement efforts for everything from simple to massively complex service provider agreements and relationships. There’s an irony in this as well. What’s interesting is that rather than just the MSPs managing the VMSs, you have VMSs managing all forms of MSPs, including BPOs and IT MSPs, as the solutions broaden to manage suppliers rather than just source and transact.
- The rise of new data and analytical solutions. We’re particularly excited about Brightfield Strategies new Talent Data Exchange, which we had the chance to see at Beeline’s customer conference, and how procurement organizations will integrate this type of information into their contingent workforce management efforts and VMS applications. We’re also interested to learn more about IQN’s cognitive intelligence engine, named ATOM (Automated Talent Ontology Machine), which will harness predictive analytics to provide real-time recommendations on rates, time-to-fill, labor demand modeling and industry benchmarking. Ultimately, we believe the future VMS will serve as a broader supply market intelligence dashboard and solution for all types of services that goes beyond providing labor rate intelligence to broadly examine labor categories, supply markets and geographies.
- The ability for procurement to increasingly compare, vet, select and onboard different types of third-party talent side-by-side through integrated systems. This includes not only staffing firm resources, but freelancers and independent contractors as well. In this sense, a VMS will be about sourcing, provisioning and managing all forms of non-employee talent.
- The evolution of technology and the rise of PaaS technology and business models. The notion that a VMS is an island is as foreign as thinking of total talent management (TTM) as centered on your full-time employees only. Increasingly, the VMS will be a gateway to a world of additional untapped sources of talent, technology, functional capabilities and market intelligence. And PaaS models will pave the way.
Stay tuned as the Spend Matters team reimagines the VMS world.