In Part 1 of this Q&A, IQNavigator + Beeline CEO Doug Leeby discussed customer and partner reactions to the recent merger and how he views the future of the VMS market. Today in Part 2, we ask Leeby about specifics of the combined product roadmap and what differentiates the firm he leads from SAP Fieldglass.
Is there any update on the combined product roadmap specifically? How long do you foresee supporting multiple core platforms?
First, let me be very clear on the platform question. Despite rumors to the contrary, we are not retiring either VMS platform. As you can appreciate, in times like these, some will speculate irresponsibly or for self-gain and rumors then emerge. Together, we have about 300 customers with approximately 150 on each platform. Frankly, it would be both inane and irresponsible to sunset one of the VMS platforms.
I think people assume private equity is all about “the quick buck.” Supporting two platforms isn’t efficient but in this case, it is mandatory. GTCR understands that and supports us. When we bought Chimes years ago, we learned that when customers feel as if they are going to be forced to move off a platform (in this case, Chimes) they evaluate all the players. Retiring one of the VMS platforms would be a slap in the face to our customers, and we believe they would rightfully respond in kind. Having said all that, you still need a path to efficiency, but you must execute it in a manner that serves all your customers.
Both Beeline and IQNavigator were well down the path working on their updated and contemporary architecture. Technological advancements have continued to progress at a furious pace and there is so much more available to us now. It requires, however, a micro-services architecture. This is an exciting and remarkably empowering approach that will enable us to converge both platforms onto a new architecture with minimal disruption. Typically, one would have to undergo a long implementation — nobody wants to do that. Converging to our micro-services architecture will allow us to build both new and old functionality on the new platform and “point” it to both Beeline VMS and IQNavigator VMS. To dumb it up, we will gradually move our customers to the modern platform without them feeling the effects.
Regarding our roadmap, the benefit of merging two like and highly competitive companies is that the roadmap shouldn’t change — and it won’t. We will release our roadmap at the annual Customer Conference this spring. Currently, we’re focused on our “Quick Wins” initiative.
Our “Quick Wins” initiative is simply that — sharing great IQN functionality with Beeline customers and doing the same with Beeline functionality for IQN customers. For example, we’re connecting IQN’s industry respected integration functionality (which you may know as IQNtegrator) to Beeline VMS to reduce the time and effort it takes to build integrations. On the IQN side, we’re integrating the Beeline self-sourcing functionality into the IQN VMS so that customers can use it to source workers directly, at a much lower cost. There are eight of these quick wins, and they’ll be released in production at quarter end.
Given new ownership and a growth orientation of a private equity investor versus a corporate, can we expect future acquisitions? And if so, do you believe they will fit into the "scale" argument for a core VMS, or are there other areas which you think would help tell a bigger story around the evolution of the contingent workforce and services procurement as part of Beeline's business strategy?
We’ve got our hands full integrating the two companies and converging the platforms while focusing on our customers. I don’t foresee any acquisitions within the next two years. Having said that, I do see some very compelling partnerships manifesting. We, as evidenced by the investment we’ve made in our technology partner ecosystem, are thinking about companies offering products that extend and evolve what we do and deliver more options to our customers.
Personally, I don’t see us acquiring another VMS player. The only reason one would do that is to augment the customer base, and as I’ve already articulated, I don’t think acquisition is an effective strategy in this space if you intend to “lift and shift.”
I do think you could see a combination of some of the smaller VMS companies as individually, their customers may be at risk in terms of platform longevity or investment and innovation power. With two major players in the arena now, they will have to find ways to compete, and typically you see that in the form of “quick innovation.” VMS is, however, basically ERP-grade software, and there are actually a lot of complexities that often go overlooked. Integration capability, data security and audits, financial/invoicing controls, domain expertise, implementation experience and data science are some examples. These areas are not inexpensive and can often be too much to bare for smaller firms.
What is your perspective on how organizations should think through their contingent workforce (globally) in a changing world of trade, labor laws and immigration? What is the role of a VMS in reacting to requirements and regulations that are likely to go through a period of punctuated equilibrium? What questions are you getting from customers in these areas?
Well, after using BING to figure out what “punctuated equilibrium” is, I believe I can answer this question. First, I think it astute of you to recognize this as a period of punctuated equilibrium. That is a time when rapid growth (or evolution) emerges from a relatively static and long period of little change. We are on the verge of a significant leap in our industry. To date, the changes have been relatively slow and somewhat predictable. However, as you point out, our customers will need more based on what they are facing today. It is our responsibility to anticipate our customers’ questions not just today but also tomorrow.
The role of VMS (we’ll just continue to call it that today) should and will inform our customers on ways to accomplish their projects. Today, most use VMS in a highly transactional manner and simply view it as a solution to provide governance over their staffing and consulting companies. We have been focusing on helping our customers find talent quicker and more efficiently, as well as providing information at key decision points.
Today, VMS is used in a reactionary manner. Someone needs a position filled and the VMS is used to fill it. Our advances focus on marrying our massive data set with artificial intelligence so that we can proactively make recommendations to our customers. The focus shouldn’t be on a resource, it should be on discerning the best “mix of talent” to accomplish the desired outcome. We are focused on workforce optimization as opposed to total talent management. Certainly, we subscribe to total talent acquisition and total talent analytics, but we believe the real value comes next from helping our customers figure out how best to staff (employee or non-employee) for a project and then source and manage accordingly.
Much of our growth comes from customers expanding globally and in implementing the services procurement solution. This comes from compliance concerns as well as spend concerns. Large companies are realizing they are at grave risk when they haven’t accounted for all external labor. They also realize capturing this enormous spend is a requisite to more responsible and effective budgeting. Our solutions have accommodated for this for years. The market is starting to catch up to what is available. In that same vein, we think it will take some time for the market to exploit some of the new functionality we bring that makes the name, VMS, antiquated.
You’ve been big on data and you mentioned your partnership with TDX at last year’s conference. Does data still remain a major area of focus?
Absolutely. In order for us to be used more proactively, we need to provide insights, which all come from the data. One of the most exciting aspects of this merger is that we now have the largest dataset of contingent labor in the world. Additionally, we remain committed to TDX, which will only further augment our data and ultimately provide more value to our customers. IQNavigator had a rock solid data scientist group. Paring that talent with this combined data set is an enormous competitive advantage for us.
As we think about the “Big 2,” what is the big difference between you and SAP Fieldglass?
SAP Fieldglass has always been a formidable competitor — one I have well respected. I think the SAP acquisition has helped them by having a lot more boots on the ground representing them. Additionally, some espouse an “SAP First” mentality, which bodes well for Fieldglass. Of course, that is compelling if you want to have that much dependent on one company. We’ve taken a different tact.
I believe strongly in “BYOS” or “bring your own software.” I think it is very difficult to be the best at everything. Rather, I think those that have proven to be the best have focused intently on their domain and led via innovation based on knowing their market needs better than anyone else. We think we are the best at serving our client’s needs for the extended workforce.
I believe people, predominantly, want choice. We don’t have a prejudice for which ERP, ATS or other solution a company chooses. Our responsibility is simply to integrate elegantly. We have scores of customers on Workday, Oracle, SAP and many other great software platforms. We are happy to integrate with anyone. The key for our customers is to be able to choose the best solution for their needs and then have their providers play nice together. That’s what we do.