The Services and Indirect Spend Category

FMS and Beyond: Filling in the ‘White Space’ of Sourcing and Engaging the Independent Workforce (Part 1) [Plus+]

services procurement

Editor's note: This Spend Matters Plus brief is a refresh of our 2015 series on engaging the independent workforce, which originally ran on Spend Matters PRO. 

Freelancer management system (FMS) is a vendor-driven term and concept that achieved buzzword status in staffing and contingent workforce management circles within just a year of its inception. It is a real and important technology solution development, one that has focused attention on an important expanding gap between talent-hungry enterprises and a fast growing, business-critical segment of the modern global workforce. While FMS is one catalyst of this focus and a way of beginning to bridge this gap — a procurement “white space,” if you will — it is also a part of a much larger set of developments, encompassing a range of incumbent and new services and solutions players as well as new technology infrastructures that will unfold and take shape in the coming years.

In Part 1 of this Spend Matters Plus series, we cover how a procurement white space has appeared between enterprises and an important growing labor population: the independent workforce. We also provide an understanding of what this independent workforce is and why it is important. In Part 2, we begin to identify the broad range of incumbent and new services and solutions players that are bringing together different approaches to connecting supply and demand in this emerging contingent workforce category.

TalentNet: What Makes It Great (Independent Contract Workers SolutionMap Analysis)

Lystable

TalentNet — a provider of talent acquisition, talent management and direct sourcing technology — enables organizations that are looking to source, manage and leverage independent contract workers (ICWs). TalentNet’s technology solution was recently evaluated in Spend Matters’ SolutionMap framework with the Independent Contract Workers (ICW) enterprise solution category. The ICW solution segment is the most dynamic part of the contingent and workforce and services (CW/S) procurement technology market, which also includes SolutionMap’s Temp Staffing (Vendor Management Systems/VMS) and Contract Services/Statement of Work solution segments.

Most ICW enterprise solutions have emerged over the past five years within the context of the so-called gig, freelance and peer-to-peer “economies” — a world of innovative platforms like Uber and Airbnb versus the establishment world of enterprise software applications inhabited for decades by providers like SAP and Oracle. While some new providers have stood up external platforms like online marketplaces that function effectively as third-party suppliers of talent, others have stood up enterprise software solutions that organizations can use to source and manage talent in ways that VMS, ATS and HRIS systems cannot. TalentNet falls within this latter category.

TalentNet provides a fit-for-purpose enterprise software solution that can be used within the context of contingent workforce management and/or talent acquisition programs. The “TalentCommunity” module enables enterprises to develop, scale and manage their own independent contract workforce using online private and public talent communities. The “TalentBench” module provides business users with a range of capabilities to manage and direct-source independent workers within those categories.

Upwork Reports Q3 2018 Financial Results: Trends Continue, But Q4 Growth A Concern

Upwork Inc., ​the global online freelancer marketplace and enterprise solution company that had a successful IPO in early October, reported its third quarter 2018 financial results Wednesday. Spend Matters hasextensively covered Upwork in past years, and the Upwork Enterprise technology platform made a strong showing in our Q3 2018 SolutionMap for contingent workforce technology.

Since the company’s Q2 2018 and earlier financial results became known shortly before the IPO, it was not a surprise that Q3 results reflected a continuation of mostly positive trends. Q3 2018 gross services volume (GSV) increased by 27% over Q3 2017 to $449.5 million, putting the company on track to cross the $2 billion annualized run-rate Q4. Total Q3 2018 revenue increased by 23% period-over-period to $64.1 million.

There’s one possible surprise to investors: Upwork’s guidance on Q4 revenue indicates a range of $64.5 million to $66.0 million. The lower end of the range would imply essentially no growth in revenue Q4 over Q3, and the high end would imply only 3% growth (compared to 8% over the last two quarters). And the stock price saw a slide in early trading Thursday. For now, financial analysts and investors are trying to gauge and understand a complex, entirely new type of business that has a vision of destination but is still working out the route to get there.

The Contingent Workforce and Services (CW/S) Insider’s Hot List: November 2018 [Plus+]

Welcome to the November 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, where the pace of change may be picking up or at least becoming more pervasive. The October Hot List covered a broad range of developments in September, ranging from Coupa’s acquisition of DCR Workforce to Upwork’s announcement that it would be going public; from Kelly Services’ investment in Business Talent Group to banking/payment innovation that just make freelancers and moonlighters easier; and more. This past month — with the Upwork IPO completed and developments in Uber Works, the importance of platforms, SAP Fieldglass' Digital Network and payments methods — we’re really wondering how high the heat will rise.

Field Nation: What Makes It Great (Independent Contract Workers Analysis)

talent management

Editor’s note: This “What Makes It Great” column is normally reserved for SolutionMap Insider Subscribers, but Field Nation has generously agreed to support access for readers who are not yet members.

Field Nation offers a specialized enterprise technology solution and online marketplace that enables the sourcing, dispatching management and payment of independent field tech contractors. The provider competes in the enterprise solution category that Spend Matters’ SolutionMap calls Independent Contract Workers (ICW), the most dynamic segment of the contingent and workforce and services (CW/S) procurement software market, which also includes the Temp Staffing (Vendor Management Systems/VMS) and Contract Services/Statement of Work solution segments.

Today’s ICW solutions have their roots in the so-called gig, freelance and peer-to-peer economies — the new world of platforms, like Uber and Airbnb, versus the established world of enterprise software applications inhabited for decades by the likes of SAP and Oracle. Field Nation is a specialized solution that supports organizations (mostly service management companies, in addition to value-added resellers and sometimes OEMs) that are responsible for installing and maintaining technology/equipment across geographically dispersed business locations of technology/equipment owners/lessees.

Field Nation’s clients typically maintain a W2-employee field installation and maintenance workforce, but — to an extent — supplement it by sourcing and engaging independent field tech contractors in different locations through Field Nation’s online marketplace platform. Field Nation has recently augmented its enterprise functionality and services, branded Field Nation ONE, which is also its blended workforce management software. And it has plans to expand its work/expertise categories beyond technology/equipment.

Where does that offering fit into the burgeoning ICW market? As of September 2018, Spend Matters’ SolutionMap contains functional and customer satisfaction benchmarks on more than 50 vendors within the procurement software market, including six providers in the ICW segment. To understand where Field Nation stands out most and helps set the bar for the ICW segment — and why should this matter for procurement and HR organizations — let’s delve into the SolutionMap benchmark and explore what makes Field Nation great.

“What Makes It Great” is a recurring column that shares insights from each quarterly SolutionMap report for SolutionMap Insider subscribers. Based on both our rigorous evaluation process and customer reference reviews, each brief offers quick facts on the provider, describes where it excels, provides hard data on where it beats the SolutionMap benchmark and concludes with a checklist for ideal customer scenarios in which procurement, finance and supply chain organizations should consider it.

Business Talent Group: A Specialist in Sourcing High-end Independent Talent [PRO]

Business Talent Group (BTG), which launched in late 2007, is a unique direct-sourcing, flexible talent intermediation solution focused specifically on “high-end” business talent and the organizations that need to engage this talent on a project basis. Over the past several years, online platform intermediaries of various kinds have captured the spotlight.

But BTG has not been trying to be one of the cool kids. Instead, it has been quietly refining its own talent sourcing and engagement model, its special blend of personal curation services and proprietary technology, which was designed from the start to service the unique needs of its F1000 client base.

Rather than being a “technology first” player in the developing segment of “next-gen alternative intermediaries” (i.e., neither a staffing supplier nor a professional services or consulting firm), BTG has maintained a primary focus on meeting the specific needs of hiring managers and organizations, on the one hand, and the specific expectations of highly skilled — often expert — independent professionals, on the other. For BTG, technology is critical, but always as a means to an end, like optimizing its specialized service and business models for clients and talent. And, more recently fueled by an $8 million funding round led by Next Equity in late 2016, BTG has been ramping up its investment in technology to create applications and tools to improve client and talent experiences and results.

At this time, BTG seems to have begun sharing the spotlight, recently attracting a minority investment from Kelly Services and becoming a part of SAP Fieldglass’ digital network. In this article, we try to provide some insights into where BTG is today and where it fits into the bigger picture.

Sponsored Article

Building the MSP of the Future: The GRI Approach

digital business transformation

Managed service providers (MSPs) failing to adapt to evolving enterprise standards for contingent workforce management risk becoming obsolete before the end of the decade. To win and keep business, MSPs of the future have to reposition themselves as experts, becoming trusted advisors offering a consultative approach built on modern contingent workforce strategies. What does this look like in practice? To find out, we take a look at how Geometric Results Inc. (GRI) is tackling the contingent workforce challenges of tomorrow and examining how its solutions and services align with the three characteristics of successfully evolving MSPs.

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

interest rates

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 [PRO]

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 Enterprise: What Makes It Great (Independent Contract Workforce Analysis)

Coworks

Upwork, the well-known, global online freelancer marketplace, is increasingly becoming known for its Upwork Enterprise solution, a combination of technology and managed services designed to enable enterprises to source and engage freelance talent. Upwork Enterprise was recently evaluated in Spend Matters’ SolutionMap framework with the Independent Contract Workforce (ICW) enterprise solution category. The ICW solution segment is the most dynamic part of the contingent and workforce and services (CW/S) procurement technology market, which also includes the Temp Staffing (Vendor Management Systems/VMS) and Contract Services/Statement of Work solution segments.

Today’s ICW enterprise solutions — many originating, like Upwork, as online marketplaces — have their roots (or at least their impetus) in the so-called gig, freelance and peer-to-peer “economies” (the new world of Uber and Airbnb versus the establishment world of enterprise software applications inhabited for decades by providers like SAP and Oracle). Some of these “gig economy” solution providers have been clawing their way into larger enterprises with new technology platforms to allow those organizations to scale up their use of freelancers sourced through online platforms. This is what Upwork has been doing with Upwork Enterprise, which goes go market now as a combined managed services and technology solution (analogous, up to a point, of traditional managed service providers with their own VMS technology).

In the ICW solution segment, Upwork Enterprise is a unique solution that provides a set of functionality and services that organizations of any size can use to source, engage and pay remote, online freelancers and agencies from Upwork’s global marketplace. It provides clients with robust capabilities that includes management of SOW projects and the organization of preferred providers (freelancers/agencies) in private talent pools. And the value of the platform also is being amplified by a growing set of managed services and solution offerings.

Where does Upwork Enterprise fit into the burgeoning ICW market? As of September 2018, the Spend Matters SolutionMap contains functional and customer satisfaction benchmarks on over 50 providers within the procurement technology landscape, including six providers within the ICW segment. But where does Upwork Enterprise stand out most and help “set the bar” in for the ICW segment? And why should this matter for procurement and HR organizations? Let’s delve into the SolutionMap benchmark to find out where Upwork Enterprise is great.

“What Makes It Great” is a recurring column that shares insights from each quarterly SolutionMap report for SolutionMap Insider subscribers. Based on both our rigorous evaluation process and customer reference reviews, each brief offers quick facts on the provider, describes where it excels, provides hard data on where it beats the SolutionMap benchmark and concludes with a checklist for ideal customer scenarios in which procurement, finance and supply chain organizations should consider it.

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

procurement solutions stocks

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 [PRO]

stock prices

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.