Procurement Services - Premium Content

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.

Microsoft 365 Freelance Toolkit: Retooling How Enterprises Work (Part 1) [PRO]

The extent to which large enterprises are using independent contract workers, including online freelancers, has been a Spend Matters’ research interest for several years now. That interest has included the “what” and the “how” of what has been happening (including procurement’s role in the process).

In December 2018, when we covered Upwork’s partnership with Microsoft on the launch of the Microsoft 365 freelance toolkit, we recognized the event as one more step in the gradual alignment of enterprises and online freelancer marketplaces. But we barely skimmed the surface of what this toolkit actually is, how it came to be at Microsoft and how it could help other enterprises and their employees.

At that time, we reported that the Microsoft 365 freelance toolkit builds on Microsoft clients’ “existing technology investments and provides tools, templates and best practices that help enterprises launch, execute and manage freelance programs at scale.” And technology-wise, the toolkit consists of “built-in product features and integrations with Microsoft Power BI, Teams, SharePoint and Flow” that “guide enterprises through the freelance engagement process.”

This Spend Matters PRO series will take a closer look at the Microsoft 365 freelance toolkit, clarifying what it actually is, how it emerged and took shape, almost spontaneously, as a part of a bottom-up yet multidisciplinary process (which included HR, legal and even procurement as key players). The series will share insights into this two-year process based on our discussions with key managers at Microsoft and Upwork.

In Part 1, we draw on our discussion with Paul Estes, the Gig Economy strategy lead at Microsoft and the product lead of the Microsoft 365 freelance tool kit initiative. In Part 2, we talk with Chad Nesland, Microsoft’s director of strategic sourcing and the procurement lead in the initiative. And in Part 3, we incorporate our discussion with Eric Gilpin of Upwork Enterprise, Microsoft’s launch partner. We wrap up with our overall analysis of the Microsoft 365 freelance toolkit journey and potential implications for other large enterprises and their procurement organizations.

Services Procurement is Broken: Finding Fixes Beyond Contingent Workforce Management, E-procurement [PRO]

If you google the term “services procurement,” you’ll see an article from my colleague Andrew Karpie touching on the topic front and center. He talks about the need to transcend the traditional contingent labor-centric view of what is in fact a much larger scope dealing with the procurement of all services. Aggregate annual spend on complex services by U.S. organizations is on the order of $9 trillion to $10 trillion, while spend on temporary staffing is only on the order of $0.02 trillion. When looked at with a wider-angle lense, the scope of services spend is huge. But ...

This is where I’m going to carry the discussion forward. The problem that I’ll address is, to put it bluntly, the management of services spend is shockingly poor.

There are many reasons for this. The first is organizational.

A spend category like direct materials is fairly straightforward in terms of organizational reporting ultimately into the supply chain organization (and/or business unit). The same can be said for lab supplies managed alongside R&D or data center equipment managed alongside IT. But services are trickier, not only in their inherent complexity and variability, but also because of their organizational governance. For example, if I’m looking to bring in some DevOps contractors to supplant my IT outsourcing provider’s capabilities, do I use an IT category team, a contingent labor Center of Excellence or perhaps an IT Vendor Management Office to have the ITO vendor provision the resources?

Beyond the organizational governance issue, the bigger problem is the fragmented nature of managing (not just procuring) services and the underlying systems to manage them — even just in source-to-pay. Case in point: There is not a single source-to-pay solutions provider in the market that offers deep support for all enterprise spend on a platform with a single code base and a unified data model.

And this is 20 years after e-procurement systems started being developed. Let that sink in.

But before a few of the S2P suite vendors get their knickers in a twist over this statement, keep in mind that what I’m including with the term “deep support” is being able to track services work to the contingent worker level that temporary labor solutions (aka “VMS” solutions) and those solutions supporting independent contractors. These contingent labor procurement platforms for their part are only touching a portion of the spend, and the expansion of many of them into SOW-based spend isn’t necessarily something that firms want to use for all their contract-based spend given that modern S2P suites can do a reasonably good job of setting up SOWs against MSAs, modeling basic rate-based service catalogs, and then matching them to the downstream invoice-to-pay processes. The trick, however, is how to go beyond the basics and handle the real life requirements of complex services categories.

This transformation will require a new way to understand/frame services and a new class of architecture and platforms to meet these needs — while also making some practical moves with existing tools (e.g., using modern CLM platforms as a critical core to modeling the commercial details/attributes of these services). It will also require procurement to align more tightly with IT and to leverage an emerging ecosystem of platform providers and approaches that can help rise above the functional silos that manage services spend in disjointed ways.

Extracting maximum commercial value from services can only be done at an end-to-end process level, and procurement has an opportunity to help optimize the sourcing, consumption, settlement and ongoing management of these increasingly digital and externalized services (and their providers). By more easily extending the capabilities of digitally savvy suppliers into internal value chains with internal stakeholders, but also ultimately out to external customers, procurement can proactively be part of broader enterprise digital transformation activities.

In this SpendMatters PRO analysis, we’ll dive into the challenges of segmenting external business services (e.g., understanding the interplay between digital-dominant and labor-dominant services) and how to look beyond the traditional contingent labor approaches (hint: Segmenting the market based on the presence of a statement-of-work is clearly not sufficient).

Later in this series, we’ll dive deeper into a new commercial framework for services and then map the resulting business requirements to technology requirements and associated vendor/solution types that transcend the source-to-pay market (e.g., enterprise CLM, ITSM, low-code platforms, etc.).

Coupa, Services and Coupa Contingent Workforce: A Progress Report (Part 2) [PRO]

In this two-part PRO series, Spend Matters provides a review and analysis of Coupa’s recent evolution in addressing the category of services spend, including Coupa Contingent Workforce. In Part 1, we provided an overview of where Coupa is at with the integration and leveraging of DCR Workforce.

First, we revisited the Coupa “services procurement” background/context leading up to the DCR acquisition last year. We also recounted our September 2018 briefing, in which Coupa discussed the acquisition and what to expect as far as integration (or “unification”) of the acquisition over the coming months. Additionally, we discussed what we learned from our most recent January 2019 briefing by Coupa on the current state of the integration.

Based on this analysis, we concluded that, six months in after the acquisition, Coupa’s integration at the organizational and product levels appeared to be on course. The priorities seemed reasonable even given the unique dynamics of the VMS market — and the plan, based on Coupa’s history of stamping out post-merger integrations, seemed on track.

But beyond this, what has happened to the DCR product under the Coupa umbrella? And how is it fitting into the changing world of services procurement — and potentially even help to shape it? In Part 2 of this research series, we will provide our own observations on where Coupa seems to be going, in terms of the contingent workforce technology solution segment and its increasing overlap with other procurement technology solutions.

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

Welcome to the February 2019 edition of Spend Matters’ monthly Hot List, a look at the contingent workforce and services (CW/S) 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.

Perhaps overcome by the polar vortex, for many, January turned out to have been a frigid month. But the CW/S space continued to percolate, with a number of developments and changes and a few new third-party reports that offered insights into various aspects of this evolving space.

Field Nation: Vendor Snapshot (Part 2) — Product Strengths and Weaknesses [PRO]

In the first of this three-part Spend Matters PRO series, we introduced you to Field Nation, a digital platform that enables companies and their managers to conduct “on-demand” sourcing, engagement, dispatch, management and payment of technical field services contractors, services providers and, recently, employees.

For a number of years, Field Nation has been providing what was basically a many-to-many online spot-buy marketplace. But last year, the company launched an enterprise-level, blended-workforce sourcing and management platform solution called Field Nation ONE, and that is the focus of this product evaluation.

Among other enterprise technology solutions that address independent contract workers (ICWs) and are featured in the Spend Matters ICW SolutionMap, Field Nation ONE stands out with laser-like focus in the field services vertical and its integrated proprietary marketplace of roughly 15,000 field service contractors in the U.S. and Canada. But while Field Nation ONE is an enterprise, S2P solution addressing the ICW work category, it is nonetheless a specialized one and needs to be evaluated on that basis. It also bears noting that Field Nation ONE is at the very beginning of its product maturity curve.

Part 1 of this Spend Matters PRO series provided company background and a detailed solution overview, plus a set of solution-fit considerations. In Part 2, we now cover what we see as the strengths and weaknesses of the solution as well as a rating of UI/UX. Part 3 will provide competitor and SWOT analyses, and insider evaluation and selection considerations.

5 Areas for Services Procurement Professionals to Watch in 2019

platform

As we start off 2019, more procurement professionals may want to be on their toes with respect to the changing contingent workforce and services environment. With that in mind — and recognizing the wicked challenge of making even short-term predictions in this space — we are not offering predictions per se but rather commentary on several broader trends. No promises, no New Year resolutions. Instead, we’d like to point to some areas we will be (and perhaps you should be) watching in 2019. To avoid being caught flat-footed as new developments and opportunities arise, practitioners need to keep their eye on five areas in particular.

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?

FMS and Beyond: Filling in the ‘White Space’ of Sourcing and Engaging the Independent Workforce (Part 1) [Plus +]

services procurement

Editor's note: This Spend Matters Plus brief is a refresh of our 2015 series on engaging the independent workforce, which originally ran on Spend Matters PRO. 

Freelancer management system (FMS) is a vendor-driven term and concept that achieved buzzword status in staffing and contingent workforce management circles within just a year of its inception. It is a real and important technology solution development, one that has focused attention on an important expanding gap between talent-hungry enterprises and a fast growing, business-critical segment of the modern global workforce. While FMS is one catalyst of this focus and a way of beginning to bridge this gap — a procurement “white space,” if you will — it is also a part of a much larger set of developments, encompassing a range of incumbent and new services and solutions players as well as new technology infrastructures that will unfold and take shape in the coming years.

In Part 1 of this Spend Matters Plus series, we cover how a procurement white space has appeared between enterprises and an important growing labor population: the independent workforce. We also provide an understanding of what this independent workforce is and why it is important. In Part 2, we begin to identify the broad range of incumbent and new services and solutions players that are bringing together different approaches to connecting supply and demand in this emerging contingent workforce category.