The Services and Indirect Spend Category

Is the Contingent Workforce Growing? Interpreting the Latest Data from the Bureau of Labor Statistics

services procurement

Last month, the Bureau of Labor Statistics (BLS) released the 2017 Contingent Workforce Supplement, its first since 2005. The report estimates that in May 2017, 3.8% of the U.S. workforce, or 5.9 million workers, held contingent jobs. In the supplement, the BLS defines contingent workers as those who “do not have an implicit or explicit contract for ongoing employment.” Self-employed and independent contractors are included in this figure as long as they have been employed for under a year and expect their employment to last no more than one additional year.

Online Work Platforms and Enterprises: Survival of the Fittest or the Fastest? [Plus+]

cheeta

In this Plus research brief, we provide an analysis of the complex dynamics that characterize the online work platform technology market, in particular with respect to large enterprise adoption (or, to date, the lack thereof). We also examine some promising platform strategies/approaches that may promote platform business viability and, over time, more success in achieving large scale enterprise penetration. Finally, we discuss the implications of our analysis for both platform providers and enterprise buyers.

(Note: To avoid possible perception that we are making endorsements or recommendations in this brief, we forego references to specific platforms. Platform providers are evaluated separately, in our Vendor Snapshot and SolutionMap series, with these strategies and approaches in mind.)

The Contingent Workforce and Services Insider’s Hot List: July 2018 [Plus+]

Welcome to the sixth edition of Spend Matters’ monthly feature, “The Contingent Workforce and Services Insider’s Hot List,” available to Plus and PRO subscribers. As the mercury started to rise this summer, CW/S technology and innovation took a rest in the shade. Is this a seasonal fluctuation, or has the ongoing fire burned out? Most likely the former, but this month’s Hot List turned out more warm than fiery. Still, despite the tepidness of June, there were several developments and events that bear mentioning.

Solution Provider Product and Technology Roadmaps: Are They Important? [Plus+]

spend visiblity

The short answer to the question posed in the title is emphatically and definitively “yes” — now more than ever. When screening or evaluating technology solution providers for e-procurement, contract lifecycle management, vendor management systems (VMS) or any other solution, there is frequently an inherent present and backward-looking bias in evaluating and making decisions about these solutions. Considering only what solutions have done or are doing for their clients (and ex-clients) only tells so much about whether or not the solution is a good fit.

There are probably a number of reasons for this bias, including that it may have led to optimal decisions in the past because vendors often over-promised and only partially delivered. But in today’s world, this bias can handicap a procurement organization given the growing number of new solutions and rapid changes in technology. Whether intentional or not on the part of the solution provider, “adverse selection” may come into play here — to the detriment of all. By not knowing where a provider plans or intends to (or actually can) take its solution in the future, the buyer is missing crucial information that could result in a bad decision. Making sure that roadmaps are reviewed and analyzed is an important way to mitigate this risk.

In this Spend Matters PRO research brief, we explore this problem and make suggestions to support ways to move beyond it, including how to look at a provider’s product and technology maps from a 2017 cloud-era frame of reference. For those who are new to this topic, we start with the basics, providing an explanation of what vendor product and technology roadmaps are, what they should contain and what you should expect.

Sponsored Article

The Future of MSPs: 3 Characteristics of Successfully Evolving Providers

The world of work continues to change, and managed service providers (MSPs) need to evolve to remain relevant. Gone are the days where enterprise contingent workforce programs required little more from MSPs than managing a base of temporary staffing suppliers, regulating contingent workforce spend, and enforcing baseline program compliance. Today, these programs must also be built to navigate an expanding contingent workforce ecosystem, guard against increasing regulatory risks, and integrate data and analytics to provide program value beyond simple costs savings.

Digital Service Providers: Do They Require Your Attention and Why? (Part 2) [Plus+]

crowdsourcing

In Part 1 of this series, we described and unpacked the topic of digital platform-based service providers, which represent a modest but growing spend category far outside of the scope of contingent workforce and services (CW/S) procurement programs. While they are not on procurement’s radar, Spend Matters believes these providers will increasingly become a significant part of organizations’ services consumption and spend over the next 10 years.

In Part 2, we review what is arguably the most successful sub-segment of these digital service providers, as well as revisit the question of whether they require your attention and why.

Next-Generation Digital Service Providers: The Who, What and Why for Services Procurement [Plus+]

An increasing number of digital, platform-based service providers are appearing today, and while they now represent a small category far outside the scope of most contingent workforce and services (CW/S) procurement programs, the spend they account for is growing.

Back around 2010, traditional BPO providers sought to introduce clients to digitally turbo-charged offerings. Though similar in concept, the providers appearing today represent a whole new generation of platform-based service providers, many of which were startups or didn’t exist in 2010. They did not arise with the scale and legacy of the BPO providers, nor did they occupy the category of major service providers of which procurement was aware and already oversaw.

Far from a passing fad, these next-generation digital service providers will become an increasingly significant segment of services consumption and spend over the next 10 years. We base our projections on solid, long-term trends evidenced in both the consumer and business sectors.

This Spend Matters Plus article defines this new generation of digital service providers and poses the entirely open question of whether they require the attention of procurement organizations tasked with managing services spend at this time. This question may be especially pertinent, given the significant similarities of digital service providers and traditional ones.

Beyond Contingent Workforce Management: Embracing an Agile Workforce

Today, when it comes to talent — especially highly skilled or expert talent — organizations are at the beginning of a new phase of workforce innovation. In the coming years, organizations will be going beyond the now well-established practice of sourcing external contingent workforce to augmenting or even replacing parts of their “permanent” employee workforce. The next phase of workforce organization innovation is embracing an agile workforce model.

From blur to Maistro: Can Services Procurement Get a Life? [PRO]

healthcare

We recently had a briefing and demo by U.K.-based Maistro, which describes itself as “an AI powered platform and dynamic B2B Marketplace that optimizes the way companies buy business services.” Formerly blur Group, the company became Maistro following a significant restructuring that took place over the second half of 2017. Spend Matters has followed the company since 2013, but our coverage tapered off over the last two years as the company's condition worsened. However, since Maistro has been operating under new leadership for almost a year now, it may be time to turn the page and start a new chapter in our coverage.

With a new tagline, “Accelerated Procurement,” Maistro goes-to-market as a procurement-oriented “managed services” solution with an integrated online marketplace that consists exclusively of vetted service supplier businesses (not freelancers). While Maistro does participate in the workforce/services game, its combined characteristics differentiate it from other online freelancer/services marketplaces, such as Upwork, Freelancer, Fiverr and others.

Nonetheless, the work/services platform space is emergent and consists of hundreds of providers, with many well-financed and still searching for the path that will lead to scale adoption by large enterprises. Consequently, it is difficult to predict which providers may find the cure or end up in a platform graveyard, if or when there is a market shakeout. One thing, however, can be said about Maistro: Despite having many near-death experiences over the last four years, it appears to be rallying — albeit with an uncertain prognosis.

Why the Staffing and Contingent Marketplace is Failing Procurement [Plus+]

In our prior analysis of the services procurement market, we looked at the evidence showing how the staffing marketplace is failing procurement organizations. Today, we turn our attention to the “why” and the factors holding organizations back from gaining more value from their services procurement spend. This value includes greater savings, of course, but also reduced risk, increased compliance, improved talent management and recovered time to focus on innovation, continuous improvement and business outcomes.

We are not purporting any grand conspiracy of sorts here. Rather, the fundamental challenge with services procurement and the staffing industry centers on a supplier-led industry dynamic that has been able to break free from the bounds of how procurement manages all other spend areas, directing the buy-side rather than having to adjust its own sell-side driven business to maturing procurement expectations and requirements.

In this Spend Matters Plus analysis, a refresh of our 2014 series, we consider the “why” of the problem and go beyond the standard “fox watching the henhouse” issues with the traditional MSP/staffing market. Finally, to conclude this series, we will offer a prescription for changing the market from the inside out with procurement-led initiatives.

The Contingent Workforce and Services Insider’s Hot List: June 2018 [Plus+]

Welcome to the fifth edition of Spend Matters’ monthly feature, “The Contingent Workforce and Services Insider’s Hot List,” available to PLUS and PRO subscribers.

In the CW/S space, new developments are observable every month. These can include:

  1. New innovative, technology solutions (sometimes hybrid technology and services)
  2. New entrants (some self-styled as disruptive) that have typically been the originators of No. 1
  3. Established supply chain players responding to Nos. 1 and 2, some more effectively than others
On a month-to-month basis, these kinds of developments ebb and flow, but there are always at least a few interesting developments (e.g., a new technology solution provider; a supply chain player or an enterprise trying something new; an alliance with, investment in or acquisition of a still young and innovative provider). If we were to go back 10 years, we would find an entirely different world where truly innovative, technology-driven developments were rare. But today the CW/S space is continuously percolating with new concepts, applications of technology, supply chain participants responses and other developments that go largely unnoticed.

Let’s have a closer look at some of what we picked up on our radar this past month.

The Evidence: How the Staffing and Contingent Market is Failing Procurement [Plus+]

There’s an incumbent ecosystem in the services procurement universe that has made a business out of delivering the bare minimum to keep customers satisfied and maintain the status quo. No, we’re not referring to the “tools” providers but rather the sad fact is that within the more capable vendor management system (VMS) tool sets today, much of the more advanced capability in these solutions goes untapped or is only partially used.

Who is to blame? It’s easy to shoot the messenger (i.e., staffing firms and the incumbent MSPs). But the blame rests with numerous other parties, as well, including consultancies, outsourcing firms, staffing researchers and, perhaps most serious of all, procurement itself.

In this two-part Spend Matters Plus analysis, a refresh of our original 2014 series, we highlight the contributing factors to how and why the staffing and contingent market is failing procurement, concluding with a prescription to start addressing the challenge. In Part 1, we present the evidence of how the staffing and contingent market is failing procurement.