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Procurement Services

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.

The Contingent Workforce and Services Insider’s Hotlist: May 2018 [Plus +]

Welcome to the fourth edition of Spend Matters’ monthly feature, “The Contingent Workforce and Services Insider’s Hot List,” available to Plus and PRO subscribers.

Today, based on our own observations and our discussions with supply chain participants, change in the CW/S space (both its scope and pace) appears unprecedented; moreover, it may also be accelerating. The staffing industry of 10 years ago was mature, stable, highly concentrated and hardly innovative. But between then and now, much has been happening.

Change, up and down the supply chain, is being driven not only by enterprises beginning to require more effective solutions in the current environment but even more so by other external forces (e.g., new technology/solutions, workforce demographics and so on). While it is important to consider these external factors/sources, it is also important to watch how the core/traditional supply chain is responding to them. There is little, if any, disruption occurring, but there are many signs of assimilation, adaptation and, in some cases, innovation. For more on this, see our discussion, under the heading “Wildfire? Or Slow Burn?," in last month’s Hotlist.

Given the above, the past month did not disappoint, with developments in both the core/traditional category and the external/innovation category. We’ll start with developments in the first category and then proceed to those in the second.

Is Corporate America Now Embracing the Future of Work? It’s Complicated [PRO]

In this heady and confusing time of freelancers, digital platforms and the gig economy, there are different perspectives on the extent to which large enterprises are — or will increasingly be — sourcing and engaging independent workers, using new technology solutions, digital platforms and new internal processes to do so. In this PRO brief, we look at the state of affairs in 2018 by evaluating this question: When will enterprises, thus far reserved, recognize the tactical and strategic importance of leveraging the independent workforce and start deliberately taking steps to make the independent workforce a part of their total workforce strategies?

The answer is complicated, and predictions are impossible. But trying to answer the question offers procurement and HR practitioners insights, from which they can draw their own conclusions and form their own managerial perspectives.

Services Procurement History: The Rise of the Staffing Industry Model [Plus +]

interview

By just about anyone’s numbers, the staffing industry still maintains dominant market share when it comes to placing temporary or contingent labor at companies (and often government agencies and departments). In this multi-part Spend Matters Plus analysis we take a look at the growth of the temporary labor market and how staffing firms emerged as a dominant model — and the context with which they accelerated their growth in recent decades. Finally, we introduces the ideas behind why Spend Matters believes staffing firms will begin to increasingly share overall contingent market share with freelancer models, talent marketplaces, alumni and shared interest pools, independent contractors/consultants and related models in the coming decades and what this means for procurement organizations increasingly tasked with managing services spend.

Holding Managed Services Providers (MSPs) Accountable to a BPO-Based Standard (Part 3) [Plus +]

Consider that during the initial years of a services procurement outsourcing initiative involving legal spend, that pursuing e-billing programs that enable rate management and better invoice tracking along with formal rate management programs and related benchmarking, rate/value alignment and volume discounting is most likely to deliver optimal near-term results. Yet in most cases, in the out-years of a multiple-year legal spend management program, it makes sense to move to such areas as law firm selection, alternative fee arrangements, resource optimization and document discovery as the next areas to tackle.

Holding Managed Services Providers (MSPs) Accountable to a BPO-Based Standard (Part 2) [Plus +]

In the first post in this series, we explored the changing managed services provider (MSP) ecosystem and suggested what we believe will be a new battle between business process outsourcing (BPO) firms and traditional, often contingent-focused MSPs for the management and program oversight of broader services procurement initiatives for organizations looking for an outsourced services procurement option.

In our view, the more effective BPOs we track are making substantial investments in senior client-facing resources that become effective members of the company procurement team. These individuals often focus on opportunities to drive results that extend far beyond basic sourcing or compliance opportunities. In contrast, MSPs often bring limited subject matter expertise outside of contingent labor or basic SOW-type procurement initiatives.

Crowdsourcing: New Trends and Developments (Part 2) [Plus +]

crowdsourcing

In Part 1 of this two-part series, we provided an overview of crowdsourcing, defining what it is and how it is different from online freelancer marketplaces. We not only provided examples of different crowdsourcing platform providers (of which there are many) but also provided illustrations of real crowdsourcing in action.

Today in Part 2 of this series, we cover the emergence of practices and functions to effectively manage crowdsourcing across organizations and some of the segments where crowdsourcing has grown both on the demand (buyer organizations) and supply (platform providers) side. We also look at how the space is evolving and provide some highlights and suggestions for practitioners.

Crowdsourcing: New Trends and Developments (Part 1) [Plus +]

Crowded.com

Back in mid-2015, we published a brief on crowdsourcing, “Clarifying Crowdsourcing: Contingent and Services Procurement Examples, Definition and Analysis,” to provide procurement professionals with a clearer understanding of this valuable, innovative tool kit for business problem solving. We’re not sure of how many practitioners took note at the time or, if they did, what they might have done about it. In any case, after a three-year hiatus, we’re back to review recent trends and developments.

Crowdsourcing, properly speaking, is still neither highly visible nor well understood, except for by the managers that use it. Yet, in some ways, it is also becoming a mainstream sourcing practice. Its use within large enterprises continues to grow, and the range of real, applied solutions crowdsourcing provides is expanding. And while crowdsourcing becomes a new normal, what it is and how enterprises are using it also continue to change.

This two-part Spend Matters Plus series explores what forms crowdsourcing is taking in 2018 and how this approach could continue to evolve. Part 1 provides a definition of crowdsourcing (and what it is not), as well as examples of how companies are currently using crowdsourcing platforms. Part 2 looks at how procurement functions are managing the use of crowdsourcing within their organizations and potential new ways in which they could soon be using the technology.

Holding Managed Services Providers (MSPs) Accountable to a BPO-Based Standard (Part 1) [Plus +]

Observing the broader procurement BPO market in recent years, we’ve seen a number of trends emerge among the leaders in the industry. When it comes to the world of managed services providers (MSPs), however, few firms, if any, mirror these trends, at least not consistently. Part of the reason for this is that many MSPs have long-standing relationships with their clients, often owning to the history of their staffing firm-based parent company. (Many MSPs work in either a stated vendor-neutral or non-vendor neutral manner, even if they are part of a staffing firm’s based P&L, indirectly or directly.)

From a foundational perspective, MSPs provide a number of core services that we explore in the report "The Managed Services Connection— The Evolving Roles of MSPs in Services Procurement." In this analysis, we suggest that on the most fundamental level, all MSPs should provide transactional management in the area of contracted services (or outcomes), including the area of cost reduction.