On Wednesday, Spend Matters Founder Jason Busch and Research Director of Services and Labor Procurement Andrew Karpie co-presented on a webinar, Contingent Workforce and Services (CW/S) Procurement: 2017 Tech Trends and Their Impact on You.
In case you missed it (though you can still watch a recording of the webinar on demand), here are some of the biggest takeaways from Wednesday’s webinar.
First off, change is coming to the contingent workforce/services (CW/S) world like never before. What’s driving it? There are four major actors, according to Karpie:
- Economic factors — “Current politics aside, businesses have to compete and grow in a flatter world. They have to reduce cost, they have to remain agile and change rapidly in response to competition, disruption, changing product demand and the rise of the digital knowledge economy.”
- Demand for talent — “Changing are, for example, the types of talent that are needed and the modes of consuming talent.”
- Supply of talent — “[There are] changing preferences among skilled professional talent and those preferences are to work more independently, to be their own boss, to have more flexibility in their lives.
- Digital technology — “It’s important to realize that technology in this framework is different from the other forces. It’s arguably the most important one to focus on. It’s not just a set of change factors coming down on the CW/S space. It enables solutions to problems posed by the other three forces. It creates new ways of doing things, and it can also create new opportunities for CW/S managers and providers in the supply chain.”
“From our standpoint, which is slightly biased, we think technology is the most important variable in the mix,” Karpie concluded.
A Complete Anomaly
Looking back, the year 2002 saw a peak in vendor management systems (VMS), with over 50 providers in the market. Today, the market has matured, and there are about 25 providers.
“What is dramatic for me is the degree of consolidation among the top players,” said Busch. “If we look at sourcing and supplier management, there’s not a single vendor with more than 10% market share.” In the CW/S market, however, Beeline/IQNavigator and Fieldglass control over 50% of market spend, which Busch described as “a complete anomaly.”
Karpie explained that the period of 2010 to 2017 has seen not only the hatching of new technologies but also the absorption of these technologies into new solutions. Regarding new technologies, there are two types of scenarios that could happen. One is that totally new solutions, such as WIPs and marketplaces, emerge. The other is that incumbent solutions adopt new technologies, such as VMS extensions to support self sourcing or talent pools of independent workers.
The trending technologies that Karpie and Busch see as having a high relevance to CW/S include cloud; data management and business intelligence; mobile platform; analytics, artificial intelligence and machine learning; and open-source software. Blockchain’s potential impact on CW/S is still uncertain, though Busch thinks it will be a significant one.
The webinar concluded with a question from the audience. What did Andrew Karpie mean exactly by the untimely demise of FMS?
“It’s a little bit tongue in cheek obviously but mostly serious,” Karpie said. “FMS is basically a third-party enterprise solution allowing companies to organize and manage independent labor. In reality that’s not the only solution type that meets the requirements of enterprises to engage with independent labor. For example, we talked about Beeline Self-Sourcing as a whole different model. And if you look at where the third parties have gotten with that model — they’ve had some deficits, like absence of sourcing and questions of integrating with existing systems and processes — the traction of that particular FMS, third-party, isolated or rather singular system has not been spectacular. That was the thinking that really lies behind my pronouncement of the demise of FMS.”
On impending change: “After decades of gradual, incremental change in the contingent workforce ecosystem, change will be accelerated.” — Andrew Karpie
On new technologies: “The first thing we want to emphasize is that it’s not so much the technologies but what the technologies can do for us, in our roles, in our businesses, et cetera. Or, what the technologies in the case of disruption can do to us.” — Andrew Karpie
On blockchain: “We think the notions of blockchain are very, very important in terms of the distributed management of systems of record and systems of provenance. We can trace a bill of materials in manufacturing, or, in contingent workforce, we can trace the past performance of a freelancer.” — Jason Busch
On disruption: “New technology can drive disruption, and basically disruption is like Shiva the Destroyer. It destroys industries, it destroys solutions. And it’s often the case that when technologies are disrupting, there’s a solution provider close behind that is coming up with new solutions.” — Andrew Karpie
On savings opportunities: “I think it’s really important to get back to ROI here. There are significant savings associated with learning new technology approaches.” — Jason Busch
On what to expect in the near future: “Many of the technology-based solutions by five years out will have matured. They will have become standardized and may be considered mainstream. I’m talking about work intermediation platforms, solutions that integrate and bridge enterprise users to multi-channel sources of talent. A good example of that is Beeline Self-Sourcing.” — Andrew Karpie
Couldn’t attend the live webinar but want more detailed insights than what’s in this recap? You can still get a copy of the slides and recording here.