Workforce 2020: The Enterprise Imperative for the Digital Transformation of Work

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The world’s biggest companies are undertaking digital transformation projects, and many have chosen 2020 as their deadline.

To understand the drive behind these initiatives, look no further than the New York Times. In its publication “Journalism That Stands Apart” a team known as the “2020 Group” lays out the Gray Lady’s plan for a digital future. No small part of the report — more than a third of it — centers the paper’s digital transformation around perhaps its most important (and expensive) asset: its staff.

To be sure, there are many other changes the New York Times intends to pursue in order ensure its sustainable financial future. Yet this considerable space spent analyzing its workforce and the way the organization gets work done teaches a valuable lesson. A digital transformation is about far more than just digitizing communications and back-office tasks; the business’ approach to arranging and managing work must become digital, as well.

To follow through on any 2020 digital initiative, an enterprise must fully update its digital workforce strategy — call it Workforce 2020. Contingent workforce and services procurement (CW/S) practitioners thus need to prepare for this new workforce paradigm and fully understand the digital platforms that will enable it.

What is Workforce 2020? A New Digital Paradigm of Work

The workforce of 2020 is one that is empowered by digital capabilities, including broader access to data, effective search and, of course, mobile. To understand this shift, one need only look at the proliferation of smartphones. Within the last six years, the share of Americans that own smartphones rose to 77%, up from just 35% in Pew Research Center’s first survey of smartphone ownership, conducted in 2011. Since so many people live with a networked device, they are connected and available to work through new, digitally intermediated channels.

But mobile is only the access point. The underlying infrastructure of the cloud, as well as the growth of social media platforms and data available through advanced analytics, has revolutionized the management of work across digital platforms.

In fact, work arrangements and work assignment execution are optimized by technology. Bringing external talent — whether through freelancers, staffing vendors or any other source — into the enterprise through a digital platform allows organizations to compliantly dissolve barriers between employees, contingent workers and external vendors, providing a blended workforce that is more nimble, specialized and responsive to the work that needs to be done.

“Digital transformation of the enterprise does not just mean adding more technology to organizations,” says Andrew Karpie, research director for labor and services procurement at Spend Matters. “It means radically changing how the enterprise operates.

“There can be many manifestations of digital transformation, including using ubiquitous, real-time data and algorithms to processes flexible and autonomous workers. Another manifestation can be an increasingly 'borderless enterprise,' where external resources and services can be deployed on-demand and even meld with internal resources to achieve a firm’s objectives with clients in the marketplace.

“Accordingly, digital transformation also means a radical transformation of work and the management of work. Work can be algorithmically broken down and assigned to the optimal human resources — whatever form they take. Labor and talent resources, whether internal or external, and outside service providers can be leveraged in much more efficient ways as disconnected processes become seamless. Plus, customer needs are satisfied faster and more precisely with fine tuning."

Enterprises + Workforce 2020 = Strategic Advantage

As the economy continues to recover from the Great Recession, the ratio of unemployed people to available jobs has narrowed considerably, falling to 1.5 workers per job in 2016 from 5 workers per job in 2010. Despite this strengthening labor market, there is also growing gap between the number of jobs available and the number of hires. Economists have proposed that a skills gap is plaguing businesses, meaning the supply of available workers is unqualified to complete the work that companies need done.

To compensate for this dearth of qualified talent, companies will have to increase workforce efficiency and agility to find the people who can do these jobs. Integrating Workforce 2020 into the enterprise is thus no mere corporate exercise. By finding the skills and specializations they need at the agile pace required by the digital business environment, firms can secure new competitive advantages. Just as the NYT’s plan for 2020 demonstrates, business transformation starts with transforming your workforce.

As businesses seek to eliminate bloated costs and embrace more sustainable and competitive cost structures, an on-demand labor model based on digitally intermediated, analytics-enhanced work arrangements will become a critical enabler to those goals.

Yet to date, available workforce solutions have reflected legacy operating models and mentalities about how to handle talent. HCM, VMS and related technologies were not designed to handle Workforce 2020, and as businesses begin to adopt more automated, agile labor programs, these solutions may begin to produce negative marginal returns on investment.

To take advantage of Workforce 2020 — a strategic imperative — new technology-based solutions must be adopted.

The Path to Workforce 2020 Starts Here

Despite the emerging disconnect between previously available workforce solutions and the requirements for enabling Workforce 2020, many contingent workforce and services (CW/S) practitioners are unaware of new, technology-based workforce solutions designed and developed in anticipation of this new paradigm.

This awareness gap has, in part, been fueled by the availability of solutions that address some but not all of the challenges presented by Workforce 2020. The rise and fall in popularity of the moniker “freelancer management system” (FMS) illustrates this nicely. The FMS model proved attractive and interesting to enterprises, but it also led to many questions by prospects around how and from where workers were sourced into talent pools, how compliance requirements would be met and why organization should adopt a solution solely for managing freelancers, which are only one part of the whole labor pie.

“The right technology is key to achieving this transformation of work, workforce and outcomes,” says Karpie. “Just several years ago, freelancer management systems appeared on the scene, but they were effectively just holding tanks for the independent workforce and did not do the job. The next generation of work platforms, now emerging, has the digital capabilities needed to act as engines of work and workforce transformation to optimize the highly efficient assignment and management of work across a wider range of resources than can be done today.”

As Karpie explains, a new generation of solutions has begun to emerge that offer technologies for just these problems. And rather than wait for competitors to prove these solutions’ effectiveness, the time for CW/S to start becoming familiar with and adopting these solutions is now.

Stay tuned for Part 2 of this series, in which we explore the technological capabilities available in these new solutions and explain what practitioners should look for in a potential partner.

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First Voice

  1. Digital Transformation:

    Thought provoking blog on the impact of real digitization!

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