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Online Work Platforms and Enterprises: Survival of the Fittest or the Fastest?

07/06/2018 By

In this Plus research brief, we provide an analysis of the complex dynamics that characterize the online work platform technology market, in particular with respect to large enterprise adoption (or, to date, the lack thereof). We also examine some promising platform strategies/approaches that may promote platform business viability and, over time, more success in achieving large scale enterprise penetration. Finally, we discuss the implications of our analysis for both platform providers and enterprise buyers.

(Note: To avoid possible perception that we are making endorsements or recommendations in this brief, we forego references to specific platforms. Platform providers are evaluated separately, in our Vendor Snapshot and SolutionMap series, with these strategies and approaches in mind.)


Just over five years ago, online work intermediation platforms appeared as a blip on the radar of contingent workforce research analysts and eventually services procurement practitioners. Since that time, hundreds of platforms have been (and continue to be) launched across the world (predominantly in the U.S., but also in many other regions, even Africa). In some cases, platform development has been fueled by private equity — likely well over $1 billion to date.

Annual gross revenue of the B2B work platform segment is forecasted by Staffing Industry Analysts to be on the order of $6 billion in 2017 (about 1% of the global staffing industry market). And the overwhelming share of the online work platform revenue has been accounted for by SMB usage and, to a lesser extent, by individual and departmental usage in larger enterprises (typically not within the managed scope of a contingent workforce management program).

Despite the efforts of many online work platforms, enterprise penetration on a large program scale has not yet occurred. While some contingent workforce management programs have tested the waters, they are almost never the active agent driving adoption (which is, in any case, limited).

Work Platform Evolution

Adaptation and evolution have been the norm in the platform space, resulting in a proliferation of platform models and types, making classification difficult (to say the least). Many platform companies undertake “pivots” to try to adjust their offerings to find the “holy grail” that will unlock the enterprise or to simply align to broader market requirements to grow revenues. New platform companies can be fast followers, with more current technology and platform models and features that have benefited from the observation of platforms already in the market.

On the one hand, it is undeniable that the online work platform space is an exemplar of innovation and digitalization, creating the potential for disruption of the established (or legacy) contingent workforce/staffing supply chain. To date, however, the effect on the existing supply chain has been transformational, not disruptive, as large staffing and services providers begin to integrate platform models — through development, partnership, investment or acquisition — into their businesses and solution offerings. Still, the potential for online work platforms to, over time, become significant components in how enterprises source, engage and manage contingent workforce is very real.

But, to consider the flip side, the immaturity and ongoing evolution of the platform space — while innovative and appealing, in principle — most likely represents uncertainty from the standpoint of supply chain planners and procurement practitioners. Uncertainty obviously means risk, but there are other risks and questions that can loom large. What will be the effort and investment to implement new platform-based supply channels, and what is the likelihood of positive or negative ROI? (We are talking about procurement here.) Do platforms, at this stage of development, exhibit deficits with respect to legal/compliance requirements or integration with existing processes and systems? What about the possibility of business failure, after investment has been made in on-boarding the platform?

Objectively, the online work platform space is characterized by high potential, ongoing evolution, innovation, immaturity and industry fragmentation — all of which create dilemmas for enterprise procurement practitioners deciding how much mindshare and effort to allocate to platform sourcing alternatives at this point in time and for industry observers who wonder where it’s all heading. Does accelerated industry consolidation lie ahead? What will be the future topology of industry supply chains or diversified ecosystems? Which platforms, or types of platforms, will be winners? Which will be losers?

Promising Strategies/Approaches

At this stage in the game, these questions still cannot be answered and predictions are almost impossible. But it is possible, based on observation over the past five years, to point to strategies/approaches that may contribute to platform viability and possibly more success with enterprises:

Strategies/Approaches Discussion
Ready-to-go talent and services, not just technology While new technology-based solutions — depending on what they are — can and will be valuable for enterprises, it’s a no-brainer that enterprises really want talent and talent-based services. Platforms that inherently act as sources for various talent/services may have a stronger value proposition than pure-play technology platforms (such as FMS).
Vetted/managed talent populations and crowds One of the shortcomings of many of the earlier platforms has been the difficulty in searching for and finding what is needed in a large undifferentiated population of workers. There seems to be a platform trend toward vetting and managing talent (not just algorithmically, but also with humans in the loop).
Work/service category specialization Going hand and hand with the above, platforms that offer a broad range of work/services categories may provide the convenience of a supermarket or Amazon, but people are not standardized products with SKUs. Platforms that specialize in particular work/services categories are in a position to vet and manage with higher precision and provide delivery capabilities that are fitted for a specific domain.
Service outputs versus workers Hiring people to do work is a practice that is not going away. But mirroring a general trend toward SOW/project work, platforms that organize and deliver service outputs may have some advantages. The arms-length relationship with a service provider can reduce compliance burdens (e.g., worker classification, etc.). In addition, service outputs can be more measurable and, for some services, even standardized.
Suitable capabilities for enterprises Enterprises are a special beast that platforms must pacify. When a formal procurement program is involved, there are many legal and process requirements that are platform knockouts if not fulfilled. Many platform providers have generally underestimated these requirements and end up learning as they go (not very persuasive). Platforms that bring knowledge of enterprise requirements, processes and systems and the capabilities to address them should have better chance of fitting in. It also doesn’t hurt to be able to demonstrate value in procurement terms like spend analysis reports, certain metrics or bring additional value (through, for example, capabilities to blend external and internal project teams and make skills/project artifacts for future reuse).


Once again, these strategies/approaches have not been rigorously correlated with platform viability/success, but careful observation of platform trends over time suggest that they may be contributory.

Implications for Platform Providers

A challenge of work platform providers is achieving growth and scale that will accompany large-scale enterprise adoption. Pessimistically, there is likely to be a longer road ahead, and there may not be may not be a shortcut into the enterprise (where the best approach today seems to be getting a foothold with individual managers and departments). But time is generally not on the side of young businesses that will continue to have to burn cash on platform development and sales and support; even well-funded businesses eventually come under the pressure from investors to achieve a high ROI exit. This problem could be exacerbated if the economy stalls and investment funds dry up, in which case tightly managed, gradually-expanded ventures, with little or no outside funding, may have some advantage — particularly if they are fast or not-so-fast followers.

There appear to be at least two paths for platform providers to take, in addition to considering the potentially effective strategies/approaches identified above. Bear in mind, it may not be an exaggeration to say: “the race is not to the swift, nor the battle to the strong” — time and happenstance are important factors to be appreciated in this game.

  • One “interim survival strategy” may be to manage tightly, make early profitability a real priority based on any viable platform-based business model (serving internal business users directly or other), without earlier-than-realistic enterprise penetration, even if at small scale.
  • Another survival — and even accelerated-growth — strategy is to form a tightly coupled relationship with or be acquired by a large, well-positioned industry intermediary (e.g., a large, multiline staffing business, an MSP provider, a VMS provider, a professional services firm, etc.).
    • This may seem like a cop-out and a move that will destroy shareholder value, but in the world of online work platforms, such as it is, it may not be in the long run (understanding that any acquisition agreement will specify fair, potentially rich earn-out provisions).
    • The advantages to a platform provider are cash cushion and longevity, access to development/expansion capital, potential new, “conjoint” solution model and, perhaps most important, access to a substantial enterprise client base. Pure-play technology platform solutions may find this strategy especially advantageous.

In any case, there is some evidence in favor of this particular strategy in a platform segment where unicorns may never appear.

Implications for Enterprise Buyers

On the one hand, most enterprise contingent workforce and services procurement programs are not ready for online work platforms. Indeed, there is organizational inertia and there are many questions and issues (discussed earlier) that confront practitioners (boiling down to risk/reward trade-offs at multiple levels). On the other hand, the potential value of these platforms is significant and cannot be ignored (business users in the enterprise are already finding value by using platforms, and this is a trend that will continue). Procurement must begin to find ways to increasingly open-up time and other resources to figure out what role — or roles — online work platforms will play in the enterprise (as well as how and when).

Conducting or subscribing to research on the online work platform space (both about the platforms and about enterprise adoption) is a first step. In addition, given that they are already utilizing online work platforms inside the enterprise, business users should be viewed not as rogue spend, but as a valuable knowledge resource.

A recent Spend Matters research brief, A User’s Guide to the Gig Economy for Procurement Practitioners, provides practitioners with guidance on how to best approach online work platforms, as suggested in this excerpt:

Spend Matters research and analysis points to the following model and process:

The process should be incremental and possibly span two to three years, certainly not months —there should not be the expectation of a sea change. It is a process of transformation of organizational learning and change, starting small and progressively expanding scope and depth all the while reducing the risk of a blind-side disruption and progressively increase the capability to respond to opportunities and threats.

All of this can be guided by a nine-step process:

  1. Seriously Get to Know the External Landscape
  2. Poll Your Business Users on Current and Desired Consumption Use Cases
  3. Stringently Assess and Identify Best-Fit VMS and MSP
  4. Invite Plausible Platform Providers to do Presentations, Demos, Q&A
  5. Develop an Initial Pilot and Adoption Program Plan
  6. Engage and Present to Senior Management (Including CTO and CFO)
  7. Move Forward with Pilots and Record What Happens
  8. Analyze What Has Happened, Document in a Report for All Stakeholders, and Proceed as Appropriate (e.g. repeat).

This whole cycle or parts of it may be repeated any number of times, occurring over a time frame measured in years. Instead of a “Big Bang project,” this process moves the organization in the appropriate direction, gradually and incrementally.

With regard to No. 4 above, the “promising strategies/approaches” exhibited by some work platforms may be helpful.

There are two other important dimensions to thinking about online work platform adoption:

  • It may be possible to extract the benefits of platforms indirectly, through third-party providers of MSP, VMS, independent contractor management solutions/services, et al. This alternative, at least in the early iterations of the nine-step process above, could accelerate the whole process and reduce some of the risk.
  • A big, but not so obvious, question is how online work platforms will integrate into enterprise systems and processes. Fit-to-purpose infrastructure will be necessary. Integration with legacy VMS and other enterprise systems will take things only so far. A new enterprise “gateway/integration” capability, based on a state-of-art “technology architecture stack” (iPaaS, micro services, etc.) will probably be necessary for enterprises to fully leverage online work platforms. While this capability may not be ready for prime time for two or more years, it does not mean that enterprises should not begin iterations of the nine-step process. Some VMS players are already working on these new capabilities, but it cannot be ruled out that these capabilities will come from other technology solution providers. 


We believe it is clear that contingent workforce and services procurement is now facing a state-change with respect technology and the availability of new solutions of various types and purposes. (For more on this, download The Impact of Disruptive Technologies and Solutions on Contingent Workforce and Services Procurement). Online work platforms are almost certainly among the most important developments as sourcing mechanisms for contingent workforce and services procurement in a world where digital capabilities will continue to permeate and transform established processes and economic activities everywhere.

Successfully responding and adapting to what has already started to enter procurement will require intensified, ongoing learning. And it is important to understand that, given the complexity and the emergent nature of all of these developments, progression toward the union of online work platforms and enterprises will not occur in disconnected industry silos. People working in contingent workforce and services procurement programs, online work platform providers, VMS solution and MSP providers and other ecosystem members should be prepared for a path of more collaborative discovery and learning and mutual adaptation and solution development in the coming years.