Spend Matters welcomes this guest post from Naseem Malik, managing partner at MRA Global Sourcing.
Call them on-demand workers, contractors, free agents or mercenaries — just don’t call them inconsequential. Procurement is no longer immune to to the increase of contingent workers other functions have experienced in recent years. And the shift from employing permanent workers to temporary ones is gaining ground.
In a series last year, we set out to explore the digital evolution of the contingent workforce supply chain — a specific area of the services procurement world that, dare we say, has been getting hot.
We began tracing a line from the vendor management system (VMS)-dominated atmosphere starting over 15 years ago up to the more recent technology-enabled platforms such as Work Intermediation Platforms (WIPs).
But as we know, launching into heady discussions on the topic may be rough without laying down some simple definitions first. For that reason, we want to give services procurement practitioners a bit of a primer on three basic categories — marketplaces, service providers and private pools/networks — and examples of WIPs that fall into each (or more than one) of them.
Whoa, What’s a WIP Again? Here’s a Super Quick Review
First, let’s just quickly define WIPs. While well-known platforms such as Amazon, Uber and Airbnb have arisen in the retail, transportation and hospitality areas, tech-enabled platform businesses, functioning as new intermediaries between demand for and supply of work/services, have been proliferating. Spend Matters refers to these platforms as work intermediation platforms (WIPs).
These platforms have been able to engage workforce populations that have not been previously accessible (e.g., talent in other countries). They have created new efficient ways of executing work arrangements (direct sourcing to electronic payment); performance and fulfillment of work/services (e.g., online end-to-end); and new models of engaging workers (e.g., crowdsourcing).
After 10 years, WIPs are still at a very early stage of development. However, such a rate of maturation and acceptance is not atypical for technology-driven innovation. In our view, many WIPs around today will evolve to be successful, and new WIPs will emerge with successful formulas and models right out of the gate.
So, WIP Category #1: Examples of Marketplaces
The above platforms basically fit the marketplace model (and Upwork would also fall into Private Pools/Networks), but there are variations. So let's dig into them, shall we?
Contingent workforce procurement and management in a professional services company is oftentimes a unique activity. Performance metrics, while similar to other programs, are prioritized differently. Costs are monitored more closely, as they are directly tied to operating margins, and time to fill is a crucial metric. For a large program that hires thousands of contractors yearly, each day of cycle time reduction can add millions to the top line.
C-level executives, hiring managers, HR professionals, procurement directors and contingent workforce management practitioners at top-performing companies are recognizing that the way of engaging and leveraging talent is changing. They realize that ongoing high performance and competitive advantage require an entirely new approach to meeting their organization's needs for specialized, knowledge (i.e., business) talent — one that supersedes traditional work arrangements (e.g., “permanent” employment, stalwart consulting firms, staffing agencies) and organizational models.
In Part 1 of this three-part series, we address organizations’ changing requirements for how work is delivered, executed and managed in an increasingly digitized and networked business environment.
Officially launched this week, AllWork is a work platform that enables consumer brands to place brand/product freelancer specialists into assignments at stores of any number of different retail businesses. From our perspective, AllWork is a truly instructive example of how digital work platforms can and will enable completely new ways of arranging work.
Accenture recently joined McKinsey (“A Labor Market that Works: Connecting Talent with Opportunity,” 2015) and Deloitte (“Global Human Capital Trends 2016 — The new organization: Different by design”) with its own report that directly addresses online work platforms (which go by a number of names). The Accenture report, “Workforce Marketplace: Invent your own future,” is trend No. 3 of 5 in the company’s more comprehensive “2017 Vision Trends: Technology for People.”
When the Washington Post launched its Talent Network in June 2015, the Jeff Bezos-owned company promised to bring order to one of the media industry’s most unruly problems: sourcing and managing freelancers. Nearly two years later, the Post seems to have made good on that promise. Such a success story is a boon not only to media companies but to all businesses that extensively rely on a contingent workforce.
Attracting top performers continues to be a key area of focus for most procurement leaders today. We’ve seen firsthand the steadily increasing demand for strong supply management talent throughout 2016 and early 2017, although the supply has remained relatively unchanged. What’s also evolving is the way in which companies approach hiring and retention of these individuals, as well as the makeup of modern-day procurement groups. In this post, we explore the top three trends affecting supply management talent.
Spend Matters welcomes this sponsored article from Justine Hauth, implementation manager at SAP Fieldglass.
Your company has chosen a Vendor Management System (VMS) and you’re anxious to get started on implementation… but stop! An implementation project’s success begins with a well-organized and thought-out plan prior to kick off. Most of us have experienced the impact that poor planning can have: increased timelines, budgets, missed expectations and other frustrations that leave you scratching your head and asking “what went wrong?” and ”how did we get here?” So it’s essential that you consider the following while planning for a successful VMS implementation.
In December, Spend Matters covered SAP Fieldglass’ launch of its new product, SAP Fieldglass Flex. The new offering is effectively a VMS designed specifically for mid-sized organizations. Existing enterprise VMS solutions have tended to be too complex and costly for mid-sized businesses. And although some enterprise VMS solutions may have achieved some limited penetration in the mid-market, we believe none has been (1) designed from the ground-up specifically for this purpose, (2) benefited from best practices knowledge of a leading enterprise VMS and (3) had the support of one of the largest global software players. Given the above, we thought it was important to go a bit deeper into understanding Flex and were able to have a conversation with Rob Brimm, President of SAP Fieldglass, to gather more details about the product.
President-elect Trump has wasted no time intrepidly wading into numerous policy areas. One notable area of action has been federal spending, where his frequent pledges to cut costs from federal programs has made him seem more like the chief procurement officer of the United States (CPOTUS). Beyond federal spending, however, we as analysts of the contingent workforce and services procurement space have a far more specific question we’d like to address: How will Trump deal with the gig economy?