Services Procurement & Contingent Labor Content

Afternoon Coffee: MBO Partners’ latest look at U.S. gig economy; Hackett Group reveals procurement investment priorities

A new report by the Hackett Group has revealed that procurement organizations were prioritizing the transformation of digital technologies in specific areas. MBO Partners published its 9th annual “State of Independence” report, representing the longest-running study of the independent workforce in the U.S. And Sen. Mark Warner of Virginia warns against China cyber threats. Afternoon Coffee: your source for procurement and supply chain news.

Afternoon Coffee: Fiverr’s post-IPO share price bump; Walmart, other companies urge Trump to solve trade crisis

With share prices nearly doubling by the end of the first day of trading, Fiverr's IPO looked to be off to quite a start. Walmart Inc., Target Corp. and over 600 other companies have written to President Donald Trump to resolve the trade dispute with China. And on the heels of Gap and H&M, Ralph Lauren has also committed to a sourcing goal for sustainable cotton. Afternoon Coffee: your source for procurement and supply chain news.

Fiverr IPO launches at $21, and share price nearly doubles

procurement

Fiverr (NYSE: FVRR), the online marketplace for digital creative services, priced its 5.3 million IPO shares Wednesday night at $21 per, raising about $111 million in new funding. On Thursday morning, shares began trading at $26, but when the market closed in the afternoon, Fiverr’s share price had risen to $39.96 (nearly doubling). Based on the closing price per share and an estimated 31 million shares outstanding, Fiverr’s market cap would be about $1.2 billion, or 16 times revenue.

We will provide further analytic post-IPO coverage soon. In the meantime, check out our recent PRO series: Fiverr, the Online Services Marketplace, Is Going Public: What You Need to Know — Part 1 and Part 2.

Direct Sourcing of Labor, Total Talent Management Strategy Help Companies Improve Independent Contractor Success

talent management

When companies decide to engage contractors, the strategic approach should include methods for compliant engagement and management throughout the talent lifecycle, which incorporates sourcing and re-engagement.

So how can companies achieve this? Direct sourcing is becoming a more common option. This approach allows companies to seek out their own candidates to fill contractor roles, bypassing traditional third-party methods.

Will an Internally Managed Contingent Worker Program Work for Your Company?

It’s becoming an everyday occurrence: Businesses are hiring more and more freelancers, contractors and temporary staff — but they’re struggling to manage the process. Contingent labor experts talk about how in today’s workforce there are companies that have as many as 50% of their workers from non-employee sources. So how do companies determine the best way to locate and manage those workers while keeping a focus on what matters to the company: visibility, cost control, compliance and productivity?

Some companies still rely on more traditional externally managed programs, but the tide is changing. Companies using a managed service provider (MSP) often benefit from the provider’s expertise and broad supplier networks, but there can be difficulties with employee buy-in, staffing supplier relationships and costs.

Fiverr, Online Services Marketplace, Is Going Public: What You Need to Know (Part 2) [PRO]

Coworks

This two-part Spend Matters PRO series examines the online services platform provider Fiverr, which recently announced that it is going public (presumptively this month). The company — which has brought a fresh, distinct approach to the business market for freelancer-driven, platform-based work/services — will become the next business in the category to IPO after Freelancer.com (ASX: FLN) in 2013 and Upwork (NASDAQ: UPWK) in 2018.

Becoming a public company can be accompanied by opportunities for business validation, market awareness, access to capital, etc., but it brings new responsibilities, transparency and challenges (especially in a market that — despite getting kicked off in the mid-2000s — is still immature and evolving). Do these IPOs mark the start of a new stage of market development when businesses of all sizes may begin to accommodate and scale their new workforce models? If so, what do procurement practitioners and senior business executives know about Fiverr and the market that it and other work/services platforms operate in?

In Part 1, we examined Fiverr as an online work/services platform business (background, go-to-market strategy, solution offering and financial picture).

In Part 2, we will look at Fiverr in a broader industry context and provide a high-level comparison to Freelancer.com and Upwork. We also offer insights for procurement practitioners and executive leadership in larger organizations who are trying to get a handle on the potential supply channel of online/remote, freelancer-based work/services platforms.

Afternoon Coffee: Fiverr Sets Terms for U.S. IPO; U.S., Mexico in Tariff Talks

The U.S. and Mexico are seemingly trying their best to come to terms on immigration. Fiverr International, an online marketplace to hire and manage remote freelancers, announced terms for its IPO on Monday — Spend Matters has an exclusive deep-dive on what that means for services procurement practitioners. And Amazon unveils a new drone that the e-commerce giant says will begin making deliveries “within the next few months." Afternoon Coffee: delivering (not by drone...yet) your procurement and supply chain news.

Fiverr, the Online Services Marketplace, Is Going Public: What You Need to Know (Part 1) [PRO]

low commodity prices

Spend Matters recently reported that Fiverr, the Tel Aviv-based online marketplace for digital creative services launched in 2010, had filed its Form F-1 paperwork to go public with the U.S. Securities and Exchange Commission. Fiverr is the third online work/services platform to IPO, preceded by Upwork in October 2018 (NASDAQ: UPWK) and Freelancer.com in October 2013 (ASX: FLN). Among other things, the Fiverr IPO represents a new opportunity for analysts to get significant insight into another online freelancer marketplace’s financials and other business characteristics, including business strategy, business model and go-to-market approach.

Years ago, when Fiverr entered the market, some may have dismissed it as a low-end “5-dollar store” of online freelancers. But there was more than met the eye. In fact, Fiverr had begun executing its differentiated strategy of creating a unique marketplace based on its service-as-a-product model. According to Fiverr, it had “set out to design a digital marketplace that is built with a comprehensive SKU-like services catalog and an efficient search, find and order process that mirrors a typical e-commerce transaction.”

In this two-part PRO series, we will further discuss Fiverr and its SaaP model, including why it may align to procurement practitioner mindsets and e-procurement solution models. In Part 1, relying partly on Fiverr’s F-1, we will focus on Fiverr as a company and as a unique online freelancer marketplace platform. In Part 2, we will consider the broader context of evolving population of other online freelancer marketplaces, with special emphasis on the public companies, Upwork and Freelancer.

GDPR compliance can be complicated, but VMS technology can ease process of protecting personal data

As more businesses collect personal data, the concerns over privacy and protection continue to deepen. Social media outlets are failing to protect sensitive personal information, and hackers seem to easily find their way into retail and financial databases.

In response, governments are instituting policies to protect personal data. Some individual states in the U.S. are passing legislation, but the most sweeping effort to date is the General Data Protection Regulation (GDPR), which went into effect in the European Union about a year ago.

So, how are companies handling the collection of data and protecting that information?

Take freelancer websites, for example. Those companies collect candidate information for use in their contingent worker programs, and that data is especially sensitive. Every person applying for work is required to submit personal information during their application process, so companies impacted by GDPR must now more closely manage that. Companies have to monitor who has access, determine what data can be shared, establish proper channels for sharing, have a plan to erase data and set a specific storage term.

Afternoon Coffee: Pre-Mexican Tariffs Border Rush; The Day the iMusic Died; Contingent Workforce & Services Hot List

The Trump administration has vowed to slap a 5% tariff on goods from Mexico starting June 10 as an oblique bargaining chip on the immigration front, and it’s already creating supply chain headaches. A survey by a prominent human rights group has shown that around 80% of the world’s biggest canned tuna brands were unaware of the origin of the fish, according to Reuters. And Apple announced it will sunset iTunes. Afternoon Coffee: your source for procurement and supply chain news.

Beeline vs. Coupa Contingent Workforce: Temp Staffing/VMS Head-to-Head Comparison

The market for vendor management system (VMS) solutions has undergone two major structural shifts over the last few years.

At the end of 2016, Beeline shrank the total pool of available vendors when it merged with IQNavigator, creating the largest independent, pure play contingent workforce and services procurement technology provider by a significant margin. The two VMS solutions — now a single entity under the Beeline brand — are being converged and replatformed into a unified offering (BeelineOne) while developing innovative approaches to external workforce sourcing and management requirements. Facilitating this effort is the private equity firm New Mountain Capital, which acquired Beeline in July 2018 and has been working to strengthen Beeline’s competitive positioning, especially against the VMS market’s largest offering, SAP Fieldglass.

But in late 2018, a new competitive threat emerged, one that could turn the current “Big 2” VMS provider dynamic back into a “Big 3.” This of course was Coupa’s acquisition of DCR Workforce, which catapulted the source-to-pay suite provider (and arch competitor with SAP Ariba) into the top tiers of contingent workforce and services procurement technology capability. Coupa has branded the current and eventually integrated and replatformed capabilities as Coupa Contingent Workforce (CCW). While Coupa previously did provide baseline support for contracted-SOW services through its Services Maestro module, the acquisition allows Coupa to expand its offering and provide the same range and types of capabilities that would generally be found in leading VMS solutions. Even as the full integration of the acquired DCR capabilities will take time, CCW already poses a competitive threat to the likes of SAP Fieldglass (recently consolidated with SAP Ariba and SAP Concur in the newly formed SAP Intelligent Spend Group) — and, of course, Beeline.

The rapid evolution of the “new” Beeline and Coupa’s surprise leap into the upper tiers of the VMS market raises the question: How do the two vendors stack up in a head-to-head bout? After all, competitive matchups between the two are already becoming a more frequent event, and both help set the average functional benchmark score in Spend Matters’ Q4 2018 Temp Staffing SolutionMap. (The Q4 results are labeled Coupa but look specifically at the DCR solution pre-acquisition because the integrated Coupa-DCR solution is still pending and has not been reviewed for SolutionMap.)

Join us in this unfiltered SolutionMap results analysis from our Q4 2018 dataset as we look at the two top ranked contingent workforce/VMS providers, along with the commentary of the Spend Matters analyst team. Bear in mind, the scores/ratings in this analysis are now approximately 9 months old, and some of the score differentials may have changed — however, we have no reason to believe significantly.

These “Head-to-Head” reports share the insights of each quarterly SolutionMap report for SolutionMap Insider subscribers, providing unique comparative cuts of SolutionMap benchmark data along with the trademark quips that Spend Matters was better known for in its early years. So buckle your seat belt, prepare for some real data and expect a few sparks to fly as we pit Beeline and Coupa against each other in the vendor management system evaluation ring.

Not yet an Insider member? Here’s a preview: In certain temp staffing categories — which include Supplier Management, Candidate Evaluation/Selection/Submissions, Change Order Management, Engagement Management, On/Off-boarding, Rate Management, Requisition Creation and Approvals, Time and Expense and Worker Compliance — Beeline convincingly comes out on top. In others, it’s darn close, with Coupa coming out on top, or the two achieving a statistical tie. And in at least one area, Beeline delivers an unquestionably superior score.

Overall, the results suggest that the right solution will vary based on different organizational requirements. There’s no debate that VMS/temp staffing selection processes will reward procurement organizations that tailor provider selection to their specific needs.

The Contingent Workforce and Services (CW/S) Insider’s Hot List: June 2019 [Plus+]

Welcome to the June 2019 edition of Spend Matters Insider’s Hot List, a monthly look at the contingent workforce and services (CW/S) space that’s available to PLUS and PRO subscribers. For those new to the Hot List, each edition covers the prior month’s important or interesting technology and innovation developments in the CW/S space. Uber, Deliveroo, Doordash and Fiverr are among the companies making news.