Procurement Services - Premium Content

What is a VMS today? Spend Matters’ SolutionMap helps define it 

work intermediation platform

Vendor management system (VMS) solutions have been synonymous with contingent workforce technology for the past two decades, but the functions associated with it have been evolving.

It began as a fit-for-purpose software application for managing temporary staffing suppliers and temporary workers, but over the past 10 years, most of these solutions have added functionality or modules to manage contract services/SOW suppliers and service delivery engagements. In the past five years, some providers of these solutions have grappled with the VMS term and concept. Today, most providers of these types of solutions still refer to themselves as VMS solutions, although their solution footprints vary.

When Spend Matters introduced its first SolutionMap for Contingent Workforce and Services (CW/S) enterprise technology in Q2 2018, it decided to forgo the use of the term VMS in favor of developing separate SolutionMap rankings for distinct technology solutions that addressed three extended workforce categories: (1) Temp Staffing, (2) Contract Services/SOW and (3) Direct Sourcing of Workforce/Services (formerly named “Independent Contract Workers”). This was done in part to sidestep the growing variability of the meaning of the term VMS. But more importantly, it was done based on the belief that the three categories provided a more accurate way to analyze and compare solution capabilities (to be discussed further below).

This SolutionMap Insider brief examines the current status of VMS and how Spend Matters draws a tentative line around what constitutes a VMS solution today. It also provides a high-level view of the “VMS” capabilities and an anonymized analysis of corresponding SolutionMap scores. Lastly, it concludes with questions posed to practitioners and providers about the validity of the definition and concept of VMS presented in this brief.

Utmost’s Extended Workforce System: What’s Behind It, What Is It and What Does It Mean for Enterprises? [PRO]

It is important for enterprises to have a handle on the whole of their contingent (or extended) workforce. Not just temporary workers supplied by staffing firms, but also workers that are engaged through service providers (ranging from building maintenance companies to management consulting firms and BPOs ). And then there are the independent and freelancer workers of all kinds, however they are classified.

A new workforce technology start-up, Utmost, thinks it’s very important to enterprises — and workers too. The company recently announced the launch of its core platform, Utmost Extended Workforce System, and an $11 million series A round led by Greylock Partners and a partnership with Workday Ventures. The company, with offices in San Francisco and Dublin, was founded by two former Workday executives and a former Groupon technologist.

With respect to where there is a critical gap in the solution marketplace, the co-founder and CEO of Utmost, Annrai O’Toole, said in a recent announcement: “With hundreds of millions of extended workers engaged with companies today, there is an undeniable shift happening, yet it is clear that businesses need new, seamless solutions to transparently manage this population.”

Greylock partner Sarah Guo offered a starker assessment of the gap in the market: “Companies in every sector engage with an extended workforce, but the rigid and clunky systems used to manage that workforce are stuck in the past. Utmost is a cloud solution for the modern, flexible enterprise, and offers a worker-centric approach to manage this population that enterprises previously lacked.”

To be clear, Utmost is building an advanced open-technology platform that will be valued by enterprises right out of the gate. But, just as important (if not more so), the company is also taking a “worker-centric” approach, starting with easy-to-use mobile apps and efficient engagement workflows for external workers (and it is also working on delivering a set of enabling services to these often severely underserved workers).

In this PRO brief, Spend Matters examines the conditions that are creating a demand for a solution like Utmost Extended Workforce, provides an explanation of the solution and looks at what it means for enterprises.

Brightfield (TDX) Raises a Whopper of a Round: Analysis + Implications for Contingent Workforce/Services Technology [PRO]

Earlier today, Spend Matters reported that a $53 million Series A funding round was raised by Brightfield (TDX), formerly a consulting firm that became a provider of AI-derived market intelligence for the contingent workforce/services community. Spend Matters believes the size of the round — very large for a series A — is indicative of a number of factors beyond the fact that Brightfield (TDX) is a more mature organization in terms of product, customers and revenue than most companies going up for an earlier stage funding round.

Indeed, Brightfield “2.0’s” rapid data-driven success after its pivot — and the comparatively gargantuan investor vote of confidence at the Series A level — represent several converging trends. We will explore these in this Spend Matters Nexus research brief, which also provides overall analysis and key takeaways for services procurement providers, investors and practitioners. Our analysis begins with a company and solution overview of Brightfield and its TDX platform, Talent Data Exchange.

Jason Busch serves as Managing Director of Spend Matters Nexus, a membership, research and advisory organization serving technology acquirers (private equity, corporate development, etc.) and CEOs in the procurement and finance solutions marketplace (including contract management, B2B marketplaces/connectivity, indirect procurement, services procurement, direct procurement, commodity management, payment, trade financing, GRC/third-party management and related adjacent sectors).

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

Welcome to the October 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 our 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.

Let’s check on September’s developments, like our update of vendor rankings in SolutionMap, a look at California’s new AB-5 law on employee classification, industry partnerships like the Upwork-Workforce Logiq plan, and a look at this question: What do Match.com, Tinder and gig platforms have in common?

Workforce Logiq Partners with Upwork — What’s Going On? [PRO]

Workforce Logiq recently announced its partnership with Upwork, the largest global, online freelancing platform (in terms of spend, about $2 billion annually). The partnership — which is exclusive — is the first, officially launched, commercial relationship between Upwork and a managed services/solutions provider like Workforce Logiq.

To understand the deal, let’s look at Workforce Logiq’s history and where it’s going. Before we get to an interview with Workforce Logiq CMO David Trachtenberg, it’s important to see how this veteran provider got here.

The company is a well-established, global contingent workforce services and solutions provider, that is, a provider of MSP and other workforce solutions/services (such as contractor sourcing, compliance and payrolling services). With about $3 billion in annual spend under management, Workforce Logiq is also one of just two major MSPs that (a) are “vendor neutral” (i.e., are not a business unit of a larger parent company that has its own, proprietary staffing firm network) and (b) can offer clients a proprietary VMS solution.

Workforce Logiq has been undergoing a transformation in the past year or so. The company has a new senior leadership team put in place under Jim Burke, CEO and industry-outsider, who joined the company in spring 2018. The company also changed its name/branding from ZeroChaos at the start of 2019 to reflect its break from the past and look to the future. In a July 2018 interview with Spend Matters, Burke said: “I think of (Workforce Logiq) as a technology-enabled services business. That means we use our proprietary technology, data and global team of industry expert advisers to deliver a better service on behalf of our clients.” Accordingly, Workforce Logiq has been re-aligning to the market by providing the services and solutions that customers need today, investing in technology infrastructure and working with ecosystem partners to address customer requirements and pursue innovation.

CA Assembly Bill 5 is Law: Is the gig economy doomed? (Part 3) [PRO]

sharing economy

Last week, with a stroke of California Gov. Gavin Newsom’s pen, CA Assembly Bill 5 (AB-5) became law and cast the gig economy into question. Did it doom the gig economy and its contract workers? And what does it mean for businesses?

Technically the law takes effect Jan. 1, but its future, nonetheless, remains uncertain for many reasons. And even if the law does not get watered down or blocked in the courts or overturned by state referendum, the jury is still out on whether AB-5 will deal a death blow to the gig economy or just change it. The signing of AB-5 “into law,” to a significant degree, marks the start of a new phase of debate and uncertainty about the question of whether a worker is an employee (EE) or an independent contractor (IC) and what the future of the “gig economy” — an ambiguous term if ever there was one — will be.

Earlier in this series, we referred to the gig economy as “an ecosystem of businesses and many types of workers” and governed by laws — “that part of the labor market where businesses, including online ‘gig platforms,’ engage workers as non-employees.” We believe this is the broader context in which this law should be analyzed (because, believe it or not, it’s not just “all about” Uber, et al, which represent just one segment of workers classified as ICs. According to our estimates, based in part on Beacon Economics report, “Understanding California’s Dynamex Decision 2018,” ICs make up about 19% of the California employed workforce of about 20 million workers (upwards toward 4 million ICs in the state). And over 90% are in industry segments other than “transportation.”

In Part 3 of this three-part Spend Matters PRO series, we will try to assume the business perspective and provide our thoughts on the newly passed law and the fate of the gig economy as well as point to potential implications for contingent workforce managers, HR and other executives.

CA Assembly Bill 5 passes: Is the gig economy doomed? (Part 1) [PRO]

California Assembly Bill 5 (AB-5), recently passed by the state Senate, changes the definition of who is an employee and who is a contractor. It is expected to be signed by the governor and is slated to go into effect January 2020. The new legislation, which codifies the 2018 state Supreme Court decision in the controversial Dynamex civil litigation case and clarifies its application, is sending shockwaves through the ecosystem of businesses and workers that constitute the so-called gig economy (that part of the labor market where businesses, including online gig platforms like Uber, engage workers as non-employees).

The main issue, one that has become increasingly fraught over the years, is whether a worker should be classified as either an independent contractor (IC) or an employee (EE) of a business, given the conditions and characteristics of the engagement. Anyone who follows this matter knows that determining the classification of a worker is not a simple matter. The presence (or absence) of laws and interpretations at the national, state and even municipal levels and the promulgated regulations of different governmental entities responsible for taxation, unemployment compensation, worker’s compensation insurance, etc. means a worker may be classified differently depending upon the reference point.

In Part 1 of this three-part Spend Matters PRO series, we will cover the background/context of AB-5 and the essential points of the bill. In Part 2, we will examine different perspectives about the law, and Part 3 will provide our own thoughts and examine some potential implications for contingent workforce managers.

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

Welcome to the September 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.

We’ll look at several hot topics: Upwork’s review of disagreements about the size of the freelance economy, changes in worker classification, drone deliveries, a funding round by healthcare jobs marketplace provider Nomad Health, and how freelancers are changing banking and finance.

What I Learned About Coupa Contingent Workforce (CCW) at Coupa Inspire [PRO]

While at the corporate event Coupa Inspire recently, keeping a watchful eye on Coupa’s progress with Coupa Contingent Workforce (CCW) unification, I found myself thinking about something. It was just over two years ago that Coupa dipped its toe into the services procurement solution space with the limited release of Services Maestro. Among other things, that narrow solution component for sourcing and managing SOW projects of low-medium complexity and scale left few doubts that Coupa was serious about providing its customers with lifecycle source-to-pay capabilities for the procurement of contingent workforce/services (or CW/S, as Spend Matters abbreviates it).

I found it a bit amusing, in retrospect, that in a Spend Matters brief at the time (Coupa Unveils Services Maestro: Will the Student Become a Master of Services Procurement and Contingent Workforce Spend?) we somewhat playfully lectured Coupa about the complex nature of the space: “If Coupa decides to use the current iteration of Services Maestro as a jumping off point to enable procurement in this journey,” we sternly warned, “it will need to question, at the very core, how it opts to deploy its product development and product management resources to address the challenge.” And so it did, in September 2018, opting to buy (vs. make) a well-regarded VMS solution to “unify” into Coupa’s business spend management (BSM) platform.

So as I meandered in and out of the recent CCW sessions, demos, conversations with product development folks and, above all, clients and prospects, it became clear to me that Coupa was now looking like a maestro after all or, at least, certainly a very motivated and able fast learner. What my experience at Inspire brought home for me was that, in a period of just two years, not only had Coupa gone from nibbling on the edge of the CW/S solution space to actually being a major player in it. Coupa was also progressing steadily in realizing its vision of full contingent workforce and services capabilities woven into its unified BSM solution fabric.

This PRO brief will separate what I learned in terms of CCW progress and what I learned in terms of CCW challenges, and it will close with a brief analyst summary-commentary.

Microsoft 365 Freelance Toolkit: Retooling How Enterprises Work (Part 4) [PRO]

talent management

Previously in this series, we took a deep look into the Microsoft 365 freelance toolkit: what it is, how it organically took shape inside of Microsoft and how the supplier/partner collaboration with Upwork established a complete set of enterprise-grade, full lifecycle source-to-pay capabilities for the engagement of remote/online freelancers.

— In Part 1, we took a “product development perspective,” focusing on and explaining the toolkit itself. In addition, based on our interview of Paul Estes (Gig Economy strategy lead at Microsoft and the product lead of the Microsoft 365 freelance tool kit initiative) we also looked at how the toolkit was conceived and how it evolved from a set of internal of capabilities at Microsoft into a new solution for Microsoft customers.
— In Part 2, we took a “procurement perspective.” Based on our interview of Chad Nesland (Microsoft’s director of strategic sourcing and the procurement lead in the Microsoft Gig Economy initiative), we looked at how procurement, from the very start 2 years ago played a key enabling role in the cross-functional team and process that guided the evolution of the toolkit from idea to customer solution.
— In Part 3, we took a “partner/supplier perspective.” Based on our interview of Eric Gilpin, (SVP at Upwork Enterprise), we looked at the Microsoft 365 freelance toolkit coupled with the capabilities of Upwork Enterprise. We also examined Upwork’s role as a strategic supplier/partner, what Upwork brought to the table and what the partnership has meant for Upwork itself.


In this briefing, Part 4, we step back and take an analyst’s perspective on the Microsoft 365 freelance toolkit and Upwork partnership, offering our observations and potential insights for procurement and HR practitioners as well as other executives/managers who are grappling with how to address and optimize the use of freelance talent in their organizations. Taking things up a level of abstraction, we provide a more comprehensive business context; we highlight and discuss a number of important aspects of the Microsoft 365 freelance toolkit and the more comprehensive solution that includes Upwork Enterprise; and we suggest what possible opportunities and considerations executives/practitioner could encounter down the road.

Shiftgig Changes Course: What Can We Learn? (Part 1) [PRO]

Taulia

We recently reported that Shiftgig, the Chicago-headquartered, digital platform-based intermediary that connects workers and local businesses, announced that it was becoming a pure-play technology business. The company, which has raised $56 million since its Series A round in 2012, originally launched as an online marketplace that enabled workers to find hourly work and businesses to hire workers. Now, Shiftgig’s reinvention not only represents a significant pivot for the nearly seven-year-old company but also sheds some light on the evolution of the contingent workforce supply chain.

Part 1 of this series will provide background on Shiftgig’s business and a look into the company’s recent sale of its staffing operations to two staffing agencies that focus on hospitality/event staffing. Part 2 will cover our recent interview with Shiftgig CEO Rick Bowman, who shares his perspective on the business pivot and the current go-to-market strategy (ongoing since at least mid 2018). Part 3 of the series will conclude with our commentary on Shiftgig’s strategic shift in the broader context of the evolving contingent workforce technology solution and intermediation space.

Microsoft 365 Freelance Toolkit: Retooling How Enterprises Work (Part 2) [PRO]

In Part 2 of this three-part series, we shift our focus from the examination of what the Microsoft 365 freelance toolkit is and how it emerged with a broader work innovation initiative at Microsoft to the major role of Microsoft’s procurement organization in the process from the very beginning to the present.

In Part 1, we focused on the “customer zero” approach to the development of the Microsoft 365 freelance toolkit within Microsoft over the last 18 months. We also discussed the research, ideation and strategy process that started six to eight months earlier involving a number of key stakeholder groups/experts, including procurement, HR, legal and strategy in addition to the Microsoft 365 Product Content Group, led by Paul Estes.

We noted that this broader process was as much a cross-functional, organizational innovation journey into the future of work as it was a product journey motivated by the need to understand what the future of work would mean for Microsoft 365 products.

Over the past several years, Spend Matters has been researching to what extent — and how — larger enterprises have been adopting digital work platforms (such as freelancer marketplaces, crowd-based services platforms, etc.) as a way to source certain kinds of talent for suitable types of assignments.

We have also been focused on how services procurement/contingent workforce managers have been approaching (or could approach) these new sources on behalf of their organizations (see, for example, “How Procurement Can Participate in Platform Sourcing Initiatives: There Are More Ways Than One — Part 1 and Part 2”).

Based on our discussion with Chad Nesland, director of strategic sourcing at Microsoft, we now look at how procurement, starting two years ago, participated in Microsoft’s gig economy/work innovation initiative that, six months later, led to a supplier-partnership relationship with Upwork Enterprise and the subsequent development of the freelancer toolkit delivered to Microsoft 365 clients last December.