The Services and Indirect Category

Manufacturing Skills Shortage Creates Challenges, Opportunities for Digital Transformation

Toyota supply chain

Manufacturing has a shortage of skilled workers, and year by year it is expected to grow to about 2.2 million unfilled jobs over the next decade, according to a study that has been tracking the gap for almost two decades. The shortfall in workers who can handle the technical nature of manufacturing and its digital transformation could cost the U.S. economy $2.5 trillion over the next 10 years, says the 2018 study by Deloitte and the Manufacturing Institute. As one manufacturing executive said in the study, “With the positive turn in the economy, we don’t have enough job candidates with the right skills and work ethic to fill our openings, and this is making it difficult for us to accept the orders our vendors are asking us to complete.” Find out how companies are trying to bridge the gap.

Sourcing and Engaging the Independent/Freelance Workforce — An Emerging Ecosystem? (Part 1) [PRO]

Coworks

It’s time for a Spend Matters PRO series to catch up on what happened to the gap that we identified several years ago between enterprise managers and independent/freelance workers.

In November 2015, we pointed out a barely noticed “white space” between the enterprise demand for independent/freelance workforce* and the supply of those workers. By that we meant that while enterprises, with the support of VMS technology and often MSPs, were able to source and manage contingent workforce from staffing suppliers and contracted services providers, they generally lacked the capabilities to systematically source and manage independent/freelance workers.

We also observed the emergence of FMS, the freelancer management system, at that time, but we were clear that it was just “a part of a much larger set of developments, encompassing a range of new —  and incumbent — solution and service providers that increasingly leverage advanced technology, digitized information and innovative approaches to sourcing and managing independent/freelance workers.” We further asserted that the independent/freelancer workforce white space would start filling with various providers of solutions and service providers.

We also speculated that — due to state-of-the-art cloud stack, APIs, services architecture and other technology that would be underlying their solutions — these providers would start to become components of a comprehensive digitally enabled and digitally connected ecosystem. By that we meant an ecosystem (and nested ecosystems) that could evolve and be reconfigured more rapidly to serve the unique needs and preferences of different enterprises and, just as importantly, the unmet preferences and needs of the independent/freelance workers whom enterprises would engage in many new ways (some previously not possible).

Now, three years later, we can ask what has actually happened and to what extent the white space between enterprise managers and independent/freelance workers has been filled to:

— Provide enterprises with the required capabilities to source, manage and maximize the value of this independent/freelance population.
— Provide independent/freelance workers with the access to the opportunity pathways and the support/services they require to function as viable “operators.”

In Part 1 of this PRO series, we assess the current state of the independent/freelancer workforce and whether it is overhyped. In Parts 2 and 3, we will focus on the extent to which digitally enabled sourcing channels and work intermediation platforms have effectively bridged the gaps. In other words, to what extent has the white space been filled? And what is the current state of the digitally enabled ecosystem?

Q4 2018 SolutionMap Release Notes: Contingent Workforce & Services (CW/S) Enterprise Technology Solutions — Temp Staffing, Contract Services/Statement of Work (SOW), Independent Contract Workers (ICW)

Q4 2018 marks the second research cycle for Spend Matters’ Contingent Workforce & Services (CW/S) “enterprise technology” SolutionMap, the sourcing and management of three underlying spend categories: Temp Staffing, Contract Services/Statement of Work and Independent Contract Workers (ICW).

The providers in the Q4 2018 CW/S SolutionMap include Beeline, Coupa-DCR Workforce, Field Nation, Shortlist, SirionLabs, TalentNet, Talmix, TalonFMS, Upwork Enterprise, Vndly and WorkMarket (ADP).

Given Spend Matters’ procurement orientation, we evaluate “enterprise technology” vendors within a source-to-pay (S2P) reference model. In other words, we look at vendors in terms of their capabilities that address some or all enterprise requirements that arise within an S2P lifecycle (i.e., from supplier sourcing to worker or supplier payment).

In this second CW/S research cycle, there was again limited participation in the Temp Staffing and Contract Services/SOW SolutionMap categories. However, a good number of key vendors have expressed interest in participating in upcoming cycles.

There continues to be vibrant interest in participation by vendors in the emergent Independent Contract Workers (ICW) SolutionMap category. There are two new participants, Shortlist and Talmix, in Q4, and there are several other vendors interested in participating in upcoming cycles.

We have gathered extensive business profile information, received well over 30 client reference surveys and have assigned scores to specific solution capabilities (RFI line items) ranging from well over 100 to about 300, depending upon how many SolutionMap categories a particular vendor participated in.

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

Welcome to the December 2018 edition of Spend Matters’ monthly feature, “The Contingent Workforce and Services (CW/S) Insider’s Hot List,” available to PLUS and PRO subscribers. If you missed previous Hot Lists, you can find them all here. 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 change may be accelerating or at least becoming more pervasive.

Despite the change of seasons, November was hot enough, with a continuing warm, steady stream of new developments like Spend Matters prepping the second contingent workforce comparison for SolutionMap (coming Dec. 4), an update on Upwork's stock performance since its IPO, Appen's aplomb with language, FlexJobs' map of jobs by states, and helping freelance workers help themselves.

Making It Real: Workforce Agility in Context

talent management

Organizations are increasingly being driven by market and competitive demands, new technology and other environmental factors to become more responsive to rapidly changing opportunities, challenges and threats — to become, in effect, more agile. The question of specifically how an organization can become agile is still being answered by executives, management consulting firms, framework creators and academic researchers. But what we do know is that how human capabilities are engaged, organized and used is a big part of the answer to the question. In this brief, we explore how workforce agility is connected to organizational agility, where most organizations actually are on the road to organizational agility and why the drive to agility is both urgent and incremental.

ADP and the Future of Work (Part 4) — Strategy Assessment [PRO]

talent management

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 Part 3, we offered an explanation of how we see ADP’s future-of-work strategy, providing additional context and zeroing in on essential features. In this fourth and final part of this series, we step back to assess the strategy and what it may mean in a broader industry context.

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.

A Critical Look at Category Management (Part 4) [Plus+]

Editor's note: This Spend Matters Plus brief is a refresh of our 2013 series on category management, which originally ran on Spend Matters PRO. 

In the last few weeks we’ve looked at some of the drawbacks related to what we might call “traditional” category management (Part 1, Part 2, Part 3). However, we should stress that they’re all aspects of the process that can be overcome by appropriate thought and management effort. The lack of stakeholder involvement we’ve sometimes seen — the overly procurement-centric approach — can be addressed by ensuring that the right engagement takes place. The risk of over-standardisation of approach can be mitigated by being aware of that issue and ensuring it doesn’t happen. But today’s discussion will consider an alternative approach that perhaps challenges more fundamentally the conventional steps in the category management process.