Beeline and New Mountain Capital: A Conversation With Doug Leeby (Part 2)

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Beeline’s recent acquisition by private equity firm New Mountain Capital has certainly been the biggest event in the contingent workforce and services sector this summer. To learn more about what the acquisition means for Beeline and the workforce management software market in general, we caught up with Doug Leeby, CEO at Beeline, to get both his insider scoop and expert perspective.

In Part 1 of this Q&A, we discussed New Mountain’s approach to managing its portfolio companies and how that could affect Beeline’s growth in the near term. Today, in the conclusion of this exclusive conversation, we examine the competitive dynamics between Beeline and its largest rival, SAP Fieldglass, and explore the three most important industry trends Leeby is focused on.

Beeline’s Acquisition by New Mountain Capital: Transaction Analysis and Competitive Impacts Get our analyst’s take

Andrew Karpie: Within the contingent workforce and services space, Beeline’s acquisition by NMC has obviously been the biggest news in July. But, at the end of the day, Beeline continues to operate in the same complex, competitive and evolving solution space that it did in June. I’m wondering if you could share how, going forward, you see Beeline in the context of the competitive and market environment.

Doug Leeby: Well, it's still an incredibly competitive environment, as you can appreciate. There are the two big guys who are battling it in just about every single opportunity. At the same time, you still have some very strong players than be very competitive, even if they may be a distant third and fourth in terms of revenue size. In any case, it’s a very competitive space.

AK: Competition is intense for a variety of reasons, and there are serious competitors besides SAP Fieldglass. But Fieldglass is the other dominant player in the space, and as you said, you encounter them in practically every deal. So what do you see at the key differentiators for the market?

DL: I’d start by saying we have a very different philosophy and approach from that of Fieldglass. The SuccessFactors/Ariba/Fieldglass proposition can be the right fit and compelling for many businesses. But others don't want all their eggs in one basket, nor do they want to just presume that all three solutions are the best for their organization. So that's where we differentiate. We're independent, and we’re happy to integrate with anyone and everyone that makes sense. We also think that “point solutions” make a lot of sense for many businesses and that they should be able to get best in class. That means BYOS — bring your own software. Now these solutions can all talk and cooperate and handshake nicely in a way that it doesn't really need to be under one roof anymore. We think freedom of choice and choosing what's best for your culture or organization is the best way.

AK: And what are other differentiators from your perspective?

DL: I think we're focused more on alternative talent needs through our self-sourcing and private talent pools, as well as some of the partnerships and ecosystem work we've done. Our service model is a robust one. We think it's important — not everything can be automated. And that seems to be well appreciated by our clients.

AK: Let’s turn our attention to what’s happening in the CW/S space. What do you see as important, sitting as you do at the helm of Beeline?

DL: In terms of major industry trend and where we're going there are three big ones I consider important. There's convergence, and, second, ubiquity. And then, third, there is AI and machine learning.

In terms of what we call convergence, I think it's happening at two different levels.

The first is how organizations come to grips with what has been the dichotomy between internal employee workforce and external contingent workforce. The much-discussed total talent management is a great convergence concept, but I see it more in terms of total talent acquisition. To be honest, I think it's a bit disingenuous for anybody to be talking about total talent management, or at least my interpretation of it. Focusing on and enabling total talent acquisition — something we’re accelerating — makes a great deal of sense to me. But it's more of this notion of plugging a VMS and an ATS together. And that's really interesting and has to happen, in my view, but it isn't necessarily solving the big problem.

AK: What do you think that problem is?

DL: The big problem that I see isn't necessarily visibility across the two types of populations and deciding which could be employees, contractors — however you bring them in. The real issue is workforce optimization. For example, how do I affect the best outcome? It has to be outcome focused. Then I apply my various decision-making levers, whether it be cost, time, quality or whatever.

While I think total talent management is a noble and important endeavor, there is this other level of convergence I think we have to address first — that is, convergence within the external labor force. So not necessarily full-time and non-full-time, but under the umbrella of non-full-time, we still have to look at freelancers and contractors and consultants. And that convergence has to happen. Our technology is ready for that, but enterprises haven’t been as quick in my opinion as they should be. So, sure, SOW growth is record setting, and that's great. But the reality is most enterprises have still failed to get their arms around the entirety of their non-full-time spend.

For me, optimizing this external workforce and introducing innovation around alternative means of sourcing — such as the private talent pools and direct sourcing, self-sourcing — presents massive opportunities for the enterprise. If we can address that, get our arms around the external, variable workforce, then I think we're in a better position to take those learnings and apply them to a full-time world and see how we effectuate outcomes.

I always create this Venn diagram with your full-time on one side and the not-full-time on the other, and then there's that middle area. I could be wrong, but I just don't think that the overlap is enormous, because traditionally organizations hire full-time for their very strategic roles (although we may see some shifts in that). But, at any rate, the overlap isn't that great. As I said before, it’s not so much about putting these two populations together side by side and figuring out which one can go where.

I think it’s about zooming out, looking at outcomes, seeing what has been effective or has not been effective in the past, evaluating different sourcing and engagement models. That is, based on data and utilizing machine learning, come back and say: Actually, this is a better one based on your culture, your product, your demographics.

AK:  So that’s the area of convergence, what about what you called ubiquity?

DL: Yes, ubiquity. We don't think users want to log in to an application and spent a lot of time in there. They've got jobs, and they want to use applications the way they use Amazon. They want to quickly look for what they need, take action and move on. Sticking with that Amazon example, consumers can access Amazon from many different devices and even get help from Alexa. No matter where you are or what device you have in front of you, you should be able to easily, quickly and intuitively accomplish your goals. We embrace and continue to work on supporting this sort of ubiquity for our clients.

AK: And that brings us to artificial intelligence and machine learning.

DL: Yes, the ever-discussed AI/ML is the third area that we're focused on. We're still in the very early stages of that. But we have access to extremely rich data, and we understand who you're buying, when you're buying and how you're buying. So we can leverage that for our clients. We can provide them with better results. We feel like the incorporation of AI/ML, despite it being in its nascence, are unleashing very exciting and innovative ways for us to better interact with our clients, by anticipating their needs and fulfilling their needs in ways that previously were onerous or clunky.

AK: Any closing comments?

DL: I would say that what we just discussed encapsulates where we're going. We think the industry is moving in that direction and hopefully we're on the forefront of it. We’ve been doing a lot more pulling than I would like, but I do see the trends moving in that direction. And I think we'll be well poised for what’s coming.

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