Author Archives: Andrew Karpie



ADP and the Future of Work (Part 3) — Strategy Explanation

In Part 1 of this Spend Matters PRO series, we summarized ADP’s business characteristics, its market and financial strength, and its increased investment in innovation R&D as a backdrop and foundation for the pursuit of its future-of-work strategy. In Part 2, we examined the significant technology developments and recent strategic acquisitions that make up key execution components of the strategy. In this third installment of this series, we will step back and provide our perspective on ADP’s future-of-work strategy, both our view of what it is and what it may mean in a broader industry context.

ADP and the Future of Work (Part 2) — Innovation R&D, Acquisitions

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In Part 1 of this PRO series, we laid out ADP’s business characteristics, its market and financial strength, and its increased investment in innovation R&D as a backdrop and foundation for its pursuit of its future of work strategy. In this second part of the series, we examine the significant technology developments and recent strategic acquisitions that make up key execution components of the strategy. Part 3 will bring the pieces together to describe this strategy and what it may mean in a broader industry context.

ADP and the Future of Work (Part 1) — The Foundation

Spend Matters’ coverage of ADP — the global payroll, human capital management (HCM) solution and HR managed services provider — had been infrequent since mid-2015, when ADP sold its procure-to-pay business to Oildex. That made sense since Spend Matters tends to focus on technology and innovation from the procurement perspective, and (given ADP’s traditional focus on internal employees), there was not even much of a link to the contingent workforce area.

But that changed in early 2018, when ADP acquired the freelancer management system (FMS) WorkMarket, and it soon became clear that something larger was brewing at ADP. In fact, we have since looked more closely and found that the company is not only executing a strategy to address needs related to the growing freelancer or independent contract workforce (ICW) — but it also is making a great leap forward in rolling-out a leading-edge core technology platform for its payroll and HCM solutions and services, something that will no doubt play a role in the company’s freelancer/ICW, agile total workforce and overall future of work strategy.

The future of workforce sourcing, engagement, management and compensation is that of human capital management as well as payment “platforms” and digital ecosystems that bring together businesses (large and small), ecosystem technology and services partners and, last but not least, workers of different generations, localities, economic strata and types of work arrangements. That includes dynamic arrangements: part-time or temporary employment, on-demand intermittent gigs or moonlighting, and freelance/independent contract worker engagements.

In this three-part PRO brief, we will provide a refresh on ADP and how it is strategically addressing the “future of work” head-on. Part 1 will provide a summary overview of ADP and how the company has been strategically investing in innovation and technology to address the future of work. Part 2 will identify and discuss significant technology developments and recent strategic acquisitions, key execution components of ADP’s future of work strategy. Finally, Part 3 will bring many of the pieces together to form a picture (or more accurately, a sketch) of how ADP is moving forward to address a future of workforce management that is increasingly digital and decentralized, and where the needs and expectations of client businesses AND workers are already diverging from those that were stable for decades.

Upwork Is Now A Publicly Traded Company: The World of Work Is Indeed Changing

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Upwork, the world’s largest online freelancer marketplace provider, went public today on the Nasdaq exchange. The IPO has been anticipated since Upwork announced its Form S-1 filing with the Securities and Exchange Commission (SEC) in early September. The opening share price today was set at $15, above the price range of $12–$14 noted in last week’s amended S-1. The proceeds of the sale of 12.48 million shares were $187 million, well above the $100 million anticipated in the S-1.

Upwork Is Going Public: What It Means for Contingent Workforce Procurement and Human Resources Executives

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Upwork’s prospective initial public offering constitutes a significant marker in the steadily evolving contingent workforce and services procurement and the overall human capital management space, where enterprise executives and line-managers are dealing with seriously imbalanced supply and demand, increasing requirements for workforce flexibility and agility, and a parade of new, non-traditional, technology-driven solutions to the problem of “getting the work done.” This is true in a number of ways and at a number of levels.

In September, Upwork, the largest global online freelancer marketplace and the provider of Upwork Enterprise, announced an IPO plan to list its common stock as an emerging growth company on the Nasdaq Global Market.

Its SEC filings revealed a $10 to $12 per-share-price range. Net proceeds from the IPO (after repayment of $16 million in notes) could range, as reported by the California-based company, between $64 million and $74 million and would be used for working capital and other general corporate purposes, including product development, general and administrative matters, and capital expenditures. Based on the filings, Upwork’s IPO valuation could range from $1 billion to over $1.25 billion (about 5X revenue).

Spend Matters has closely covered Upwork developments for several years. And the Upwork Enterprise solution was recently evaluated and recommended within Spend Matters SolutionMaps for Contingent Workforce and Services (CW/S) enterprise technology solutions (specifically, in the category of solutions that address independent contract worker (ICW) sourcing, engagement, management and payment).

While this PRO report will draw a number of key points from the trove of new, previously insider-only information about Upwork, readers can access all of those details with one click in the amended Form S-1 filed with the SEC. The purpose of this PRO brief is more to analyze what this event means for executives in contingent workforce and services procurement and HR, many of whom may not be up to speed on changes taking place in the CW/S space — in particular, new types of platform intermediaries that have the potential to substantially enhance an enterprise’s workforce sourcing effectiveness and efficiency, engagement flexibility and structural agility.

The Contingent Workforce and Services Insider’s Hot List: October 2018

Welcome to the October 2018 edition of Spend Matters’ monthly feature, “The Contingent Workforce and Services (CW/S) Insider’s Hot List,” available to Plus and PRO subscribers. For those new to the Hot List, each edition covers the prior month’s important and sometimes just plain interesting technology and innovation developments within the CW/S space. Over the last several months, this space has seen both significant change and inertia co-exist, yet the change is not slowing down — quite the contrary.

The September Hot List covered a broad range of developments, ranging from the Ernst & Young acquisition of U.K.-based alternative legal services provider (ALSP) Riverview Law, to the partnership of Jaggaer with Science Exchange, a marketplace for outsourced R&D, all the way to some of the latest blockchain-based work intermediation intermediation platforms, such as Moonlighting. In the meantime, other developments continued percolate around the innovative edge of the defined CW/S space. Altogether these developments reflect an industry that is undergoing widespread transformation.

Highlights from ADP Analyst Day: It’s Not All Permanent, It’s Also Contingent

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Spend Matters attended ADP Analyst Day last week, held at the ADP Innovation Lab in New York City. At more than $13 billion in annual revenue, ADP is the largest provider of payroll services and one of the largest providers of human capital management (HCM) solutions in the world. Over the past six decades, ADP built its business on the basis of the permanent W2 employee workforce. But as we all know, nothing is permanent — particularly in workforce, where for businesses and workers things are becoming increasingly contingent. And ADP, which acquired WorkMarket earlier this year, is clearly rising to meet the changes in the market, on both the business and worker side. As you might expect, this is not a casual undertaking for ADP but a studied, strategic initiative now moving into gear.

Coupa’s DCR Acquisition: Analyzing the Move (Part 2) — Strategic Context and Differences Between Labor and Goods Ecosystems

Even discounting the technological capabilities DCR Workforce brings customers, Coupa’s recent acquisition of the VMS provider is a watershed event for the procurement software market. Specifically, it signals to the market a coming together of technology offerings for services procurement and indirect source-to-pay solutions.

As we observed in our previous brief in this series, SAP Ariba and SAP Fieldglass did not have a compelling reason in the immediate years following SAP’s acquisition of both companies to “work as one” in developing, positioning and selling the joint value proposition of one source-to-pay portal for buyers and suppliers that spanned indirect and services spend in a single go-to-market effort. In contrast, Coupa is on a different track — one that SAP is now starting to follow, as well — in uniting these two disparate solution areas and business functions inside companies.

But humans are not SKUs, which is one topic among many that we’ll discuss as we explore the context of Coupa’s strategic acquisition in this research brief. We’ll also explain the key sector differences between the services procurement/VMS market and indirect-centric procure-to-pay and source-to-pay solutions.

Just coming up to speed? In the first two components of this series covering Coupa’s recent acquisition of DCR Workforce, we provided an overview of the acquisition itself and a review of the DCR solution set.

We also shared our view on some of the strengths and weaknesses of the DCR solution prior to the acquisition, along with an overview of the broader competitive landscape that will be relevant as DCR now becomes “Coupa Contingent Workforce.”

In this section of the series, Part 1 explored the history and context of services procurement and indirect procurement from the perspective of both Coupa and the broader market. It also provided context based on the differences between how SAP pursued the market initially with Ariba and Fieldglass following its acquisition of both vendors.

What’s Up with Contingent Workforce Programs and MSPs: A Chat with EverHive’s Brandon Moreno

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The old way of sourcing and managing contingent workforce and services is on its way out, that much is certain. Compared with the first MSP offerings from the 1990s, the number of options for engaging external workers and their work outputs has expanded considerably, making the task of choosing the right kind of program or solution partner for a business all the more difficult. To get a sense of where the industry has been and where it might be going, we sat down with Brandon Moreno, president of EverHive, for a quick Q&A on the state of contingent workforce programs and MSPs.

Coupa’s Acquisition of DCR Workforce: Analyzing the Move (Part 1) — History, Context and SAP

In the first two briefs in this ongoing series covering Coupa’s recent acquisition of DCR Workforce, we provided an overview of the acquisition itself along with a review of the DCR solution set. We also shared our view on some of the strengths and weaknesses of the DCR solution prior to the acquisition, as well as an overview of the broader competitive landscape that will be relevant as DCR now becomes “Coupa Contingent Workforce.”

As our analysis continues, we turn our attention to what the DCR Workforce acquisition could mean for Coupa as a developer of technology solutions and as a business in the indirect procurement software sector. Spend Matters believes the deal is the most significant strategic bet Coupa has made since the vendor shifted its strategy from providing open source e-procurement to what it is today. But is Coupa (and the market) ready for such a shift?

Coupa Acquires DCR Workforce (Part 2): DCR Product Strengths and Weaknesses

The contingent workforce (CW/S) technology sector could benefit from daylight when it comes to visibility into how “good” solutions actually are. Within the vendor management system (VMS) market specifically, there are various market dynamics that have led to an opaque situation in the past, in which limited information transparency exists. And when it does, this information can be often “overlooked” for various reasons when organizations are making technology-buying decisions.

Pardon the baseball analogy, but we’re still on the first at-bat in the first inning in trying to create a degree of transparency ourselves with Spend Matters CW/S SolutionMap, which launched last week, albeit with only a subset of the market’s top vendors participating in the first round launch — something we suspect will change in the coming quarters. If you’re curious to take a look, you can skim the free ranking charts for Q3 2018 (Independent Contract Workers, Temporary Staffing and Contract Services/Statement of Work). And if you want to review the true, transparent details yourself, see our SolutionMap Insider reports and ratings, as well.

While in our view the CW/S technology market trends more to capability/technology obfuscation than enlightened cloud transparency among procurement and HR organizations, DCR Workforce stands out as one of the few providers driving innovation at multiple levels, including its embrace of artificial intelligence (AI).

But how good is it really? This Spend Matters PRO research brief (Part 2 in our series covering the Coupa acquisition of DCR; see Part 1: Acquisition Analysis and Competitive Landscape Segmentation) provides a primer for those that want to answer that question. It is based on prior Spend Matters PRO research content, with new updates and insights included. (Granted, we cover the strengths and weaknesses on what we would consider a summary level by our standards, given that we consider more than 400 individual CW/S functional requirements as part of our SolutionMap analysis. But you’ve got to start somewhere.)

Coupa Acquires DCR Workforce: First Take Analysis and Competitive Landscape Segmentation

Coupa recently announced it had acquired the technology assets of DCR Workforce, a leading provider of contingent workforce/services (CW/S) procurement software. By so doing, Coupa has taken a giant leap forward in providing its clients a comprehensive platform that will now include the option of industrial-strength CW/S sourcing and management capabilities.

For many organizations, CW/S spend (including temporary staffing, independent contract workers and a broad range of categories of services provided by external suppliers) represents a considerable portion of external spend (including good and materials). And much of this spend — particularly outside of temporary staffing — is unmanaged today, in terms of procurement or HR’s ability to fully influence and orchestrate it.

In this Spend Matters PRO series, we take an in-depth look at what the acquisition of DCR means for Coupa and DCR, as well as to their customers. In Part 1 of this series, we look at what Coupa is getting by acquiring DCR, in terms of both business strategy and DCR’s specific capabilities. Based on DCR’s footprint, we also segment the competitive landscape into six primary competitor types.

Part 2 will consider DCR’s strengths and weaknesses within the competitive CW/S market. Subsequent PRO briefs will examine customer recommendations, competitive landscape implications and related considerations.