The Services Procurement & Contingent Labor Category

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.

Corcentric Acquires Source One: Transaction Analysis (Part 2) — Customer Recommendations, Selection Checklist and Procurement Consulting Market Update [PRO]

Procurement consulting sector insiders might look at Corcentric’s acquisition of Source One as a rounding error representing what is most likely materially less than the revenue — both in terms of revenue contribution and valuation — that a single large client can bring to a Big Five strategy or operations firms over the course of a calendar year.

There’s likely some truth to this statement. But to dismiss the transaction along these lines would be to ignore the acquisition of one of the few remaining non-system integration procurement consultancies in North America of any scale. And perhaps more important, it would also require turning one’s back on a number of macro trends that are fundamentally shifting the dynamics of the procurement consulting, managed services and business process outsourcing sectors.

These trends matter for both for not only those interested in playing a part in sector consolidation (sellers and buyers) but also customers. This two-part Spend Matters PRO research brief provides insight into the transaction. Part 1 provided an overview of the acquisition and background on Source One. In Part 2, we explore Corcentric and Source One customer recommendations, provide a selection checklist for potential Source One customers to evaluate if the firm is the right "fit" and offer our analysis of what the transaction means for the broader procurement consulting and solutions market.

A User’s Guide to the Gig Economy for Procurement Practitioners [Plus+]

The gig economy has been talked about so endlessly that the term has become nearly meaningless. Yet contingent workforce and services procurement practitioners know there is something going on beyond the buzzwords, something that is beginning to matter to the work they do. It is difficult, however, for many practitioners to distinguish what is essential and of importance in the context of their procurement goals. To aid in that effort, this Spend Matters Plus brief explores how practitioners can make the gig economy work for them.

Fiverr Delivers A New Slant on Independent, Specialized Knowledge Workers

Coworks

Fiverr, a marketplace for creative and digital services, recently published a unique study focused on independent, specialized knowledge workers (ISKWs). The study, conducted in collaboration with the market research firm Rockbridge Associates, seeks to provide a better understanding of ISKWs — “where [they] live, what kind of work they do and how much they’re growing as a population and in terms of revenue earned.” From our perspective, the study is unique in its sharp focus on ISKWs and its sophisticated, transparent methodology. 

The Digital Evolution of the Contingent Workforce Supply Chain: What Does It Mean? (Part 1) [Plus+]

contingent workforce

Driven by the effects of new digital technologies and other factors (talent availability, generational change, etc.), contingent workforce procurement — and the contingent workforce supply chain — will be noticeably evolving over the next 10 years. The last impetus to change in the supply chain and procurement was the advent of VMS over 15 years ago, a set of developments that is well known by now. Given how much the world of commerce has changed since that time, we probably should not be surprised that another round of change has now begun. This time, given the range of drivers — technical, economic and social — that are converging, we should also not be surprised if the new round of change may give rise to new kinds of technology-enabled labor/services intermediaries and technology-based innovation across the existing contingent workforce supply chain (staffing suppliers, VMS, MSP and others). This Spend Matters Plus brief helps contingent workforce and services procurement professionals form a broad, strategic perspective on how technology, specifically, may bring about changes to the contingent workforce supply chain and how that may unfold. However, as will discuss later in this series, this is not just the “long game,” as both specific opportunities and threats will arise along the longer path forward.

The Freelance Frontier: How the Future of Independent Work is Happening Now

On May 15, we will be joining the Freelance Frontier webinar to contribute our own perspective on emerging, alternative sourcing channels and ecosystems for independent-freelance contract workers.The webinar will also feature three young, innovative solution providers — IC PreCheck, Bunker and Genesys Talent — that have started their journeys across the Freelance Frontier.

In addition to developing their own digitally enabled solutions, these providers have chosen to partner and configure themselves as part of an ecosystem that can bring together organizations and independent-freelance workers in an efficient, fast, compliant and mutually beneficial way. In the webinar, the providers will discuss their own solutions as well as how they work together.

Services Procurement History: Staffing Firm Dominance Faces a Challenge [Plus+]

In this Spend Matters Plus research brief, Jason Busch, founder and managing director, introduces the reasons why staffing firms will begin to increasingly share overall contingent market share with alternative models including the direct hire of freelancers/independent contractors, talent marketplaces, individual “out-tasking,” alumni and shared interest pools and related models. We also provide a readiness checklist for procurement organizations increasingly tasked with managing services spend that will offer a quick, honest assessment to show if they are ready (or not) for new models.