A Primer on the Contingent Workforce and Services (CW/S) Procurement Technology Landscape

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“When it rains, it pours” may not seem like the most obvious adage to apply to the contingent workforce and services (CW/S) sector, but here we’re referring to how the CW/S procurement technology and services solution landscape, after decades of minimal change or growth, has suddenly begun to expand — and at a stunning speed.

Not only is the overall number of CW/S providers growing, the types of solutions they offer are evolving and defying simple categorization. Hence, our latest landscape report from analysts Andrew Karpie and Jason Busch, Spend Matters Landscape Definition and Overview: Contingent Workforce and Services, was a long time in the making. In order to analyze the diverse technology solutions falling under the expanding CW/S umbrella, Karpie and Busch proposed the subsequent four broad categories:

  • Contingent workforce management technology
  • SOW/services management technology
  • Digital platforms providing workers or services
  • Outsourced services solutions

This primer on the CW/S landscape provides a quick definition of each of the four categories and an overview of the primary capabilities of solutions from each category.

Contingent Workforce Management Technology

This category covers solutions that help businesses find and manage contingent workers (as opposed to services). These solutions might help you source contingent workers from staffing suppliers, manage the worker engagement lifecycle from onboarding to offboarding, process invoices and more.

Below are the core capabilities for this category, along with an example of a standard sub-capability for each (there are certainly more!):

  • Supply management — suppliers (e.g., sourcing new suppliers through an RFX process)
  • Supply management — independent workers (e.g., vetting workers for correct classification and other compliance requirements)
  • Contingent workforce sourcing and management (e.g., candidate review and selection)
  • Invoicing and payments (e.g., configurable payment terms and discounting)
  • Data reporting and analytics (e.g., dashboards that can be used to monitor activities, processes and spend)

SOW/Services Management Technology

In contrast to the first category, this one covers solutions that help businesses find and manage services, as opposed to contingent workers. These services range from marketing and advertising to IT and consulting. We estiamte that there are at least 25 distinct services categories.

Here are the core capabilities for this category:

  • Supply management — suppliers (e.g., performance management through scorecards)
  • Sourcing (e.g., bidding and auctioning capabilities)
  • Contract management (e.g., enabling of contract negotiation between two or more parties)
  • Project/engagement management (e.g., tracking performance against contract terms)
  • Invoicing and payments (e.g., ensuring compliance with specific countries’ tax regulations)
  • Data reporting and analytics (e.g., user-defined reports and queries)

Digital Platforms Providing Workers or Services

“These innovative technology-based platform intermediaries, through which either contingent workers or services can be sourced, utilized and paid for, have been emerging over the last 10 years,” wrote Karpie and Busch. “But it is only over the past few years that CW/S procurement departments have begun to take notice.”

Various factors including the comparative immaturity of the solutions and the sheer number of them have deterred adoption somewhat, but there is certainly a trend of increasing adoption. Here are the core components of these digital platforms:

  • Workforce-side platform capabilities (e.g., registration and profile creation on the part of the contingent worker)
  • Buyer-side platform capabilities (e.g., evaluating and rating the work once it is received)
  • Core platform capabilities (e.g., algorithms for purposes such as job matching and work distribution)
  • Managed (human) service layer (e.g., vetting workers)
  • Invoicing and payments (e.g., escrow payment processing)
  • Data reporting and analytics (e.g., data download and transfer)

Outsourced Services Solutions

This category covers the solutions of a “relatively stable” group of external business services providers that address a number of CW/S procurement requirements, from payrolling to worker classification to ensuring a steady supply of required contingent workers and services.

Here are the core capabilities of these solutions:

  • Contingent workforce program management (e.g., evaluating and selecting suitable contingent workforce staffing suppliers)
  • Workforce sourcing (e.g., recruiting)
  • Independent worker management (e.g., classification and compliance vetting)
  • SOW management (e.g., managing business user requisitions)
  • Own technology (e.g., owning a VMS that can be bundled into a comprehensive client solution offering)
  • Data reporting and analytics (e.g., predictive models that optimize matching and talent selection)

CW/S is a hugely important and complex area, and so we encourage you to read our latest free landscape report on this topic: Spend Matters Landscape Definition and Overview: Contingent Workforce and Services. The report provides a comprehensive look at each of the four categories summarized above, as well as at individual providers for each category. Finally, the report gives a history of the CW/S sector and explains why it deserves more attention from all businesses.

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