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Procurement Services

Beeline’s Acquisition by New Mountain Capital: Transaction Analysis and Competitive Impacts [PRO]

Beeline, well known in the contingent workforce and services sector as one of the top two global VMS solution providers, recently announced it is being acquired by New Mountain Capital (NMC), a private equity firm. NMC, which is focused on developing and growing companies in defensive growth industries, is now completing the last formal steps in its acquisition of Beeline from private equity firm GTCR. Spend Matters covered the acquisition announcement and followed up on the news with a subsequent interview of Beeline CEO Doug Leeby, who expressed enthusiasm about the deal and confidence in the new owner.

The acquisition comes at an interesting point in the evolution of the contingent workforce and services (CW/S) software market.  On the one hand, solution buying by enterprises continues to follow a customary pattern — we need a VMS or an MSP/VMS and a supplier-funded model — resulting in a commodified, competitive market. In such an environment, some VMS providers have focused on achieving economies of scale, exploiting solution adjacencies (e.g., SOW) and investing in new technologies (e.g., data analytics, artificial intelligence) to enhance solution value and differentiate their offerings.

At the same time, changing conditions on both demand and supply sides of the labor market (e.g., skill shortages, cost of talent, independent workforce, online platforms) have started to stimulate responses among CW/S intermediaries and software providers. Moreover, the application of state-of-the-art and leading-edge technologies is enabling incumbent and new providers to offer new types of solutions that may (or may not) address emerging business needs in the short term or the long term. In such an environment, having the capacity to invest — and a balanced but agile investment strategy — would appear to be critical to future success.

In this Spend Matters PRO brief, we add context to and take a closer look at the Beeline-NMC deal, which seems promising. We also offer our perspective on what the deal may mean for Beeline and the competitive markets it serves, in both short and long terms.

The Contingent Workforce and Services Insider’s Hot List: August 2018 [Plus +]

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

While the months of May and June were on the cool side, we saw a return to hot technology and innovation temperatures in July. Perhaps it’s extreme weather patterns? CW/S climate change?

Indeed, new hotspots could be found across the entire space, from the established core of traditional suppliers and intermediaries to new solutions that either complement or challenge the core (or both). While there has been friction and overheating on the demand side, developments on the supply side have also been heating up, with the mercury rising in places across the globe.

Now that our warmup is complete, let’s begin our first routine.

The Game of Professional Services: Procurement vs. Providers [Plus +]

Editor's note: This Spend Matters Plus brief is a refresh of our 2012 series on buying professional services, which originally ran on Spend Matters PRO. 

Procurement executives are often their own worst enemy in this context. Too often they measure their success purely on some hourly or daily rates achieved from the professional services provider. So the negotiating goal becomes a simple one. Your list price for a lawyer with around three years post-qualification experience is $300 an hour – we want a rate of $200 an hour. Or last year we paid £2000 a day for a managing consultant — how much discount will you give me this year?

Beeline Acquired by New Mountain Capital — The Journey Continues

Beeline, a provider of workforce management software, announced Thursday it has been acquired by New Mountain Capital, a New York City-based private equity firm, for an undisclosed amount, according to a press release. Founded in 1999, Beeline represents, alongside SAP Fieldglass, one of the “Big 2” vendor management system (VMS) providers. Its current incarnation is the result of a December 2016 merger with IQNavigator (IQN), which saw Beeline, part of staffing giant Adecco, acquired by GTCR, the owner of vendor-neutral IQN. Following the merger, Beeline and IQN were combined into a single company, renamed Beeline.

Strategic Technology Planning: A New Imperative for Contingent Workforce and Services Procurement (Part 2) [Plus +]

In Part 1 of this series, we provided a context and rationale for the adoption of strategic technology planning for contingent workforce and services (CW/S) procurement. We also began the discussion of what strategic technology planning explicitly means for an organization and how it can be enacted. Part 2 of this series continues that discussion.

By way of summary, we defined “strategic technology planning” as a specific type of strategic planning that lets an organization (i.e., CW/S procurement) know where it is now, where it wants or needs to be some time in the future, how technology can be leveraged as an enabler and what changes in resource allocation and investment must occur or what constraints will condition progress. We should emphasize that strategic technology planning is not the same as a tactical plan or roadmap, though ideally it would lead to these.

Strategic planning is more about high-level understanding (insight and foresight) than it is about immediate, direct action. We believe it must become a critical component to any CW/S procurement function and program that wants to avoid being caught flat-footed and aims to deliver a new (and necessary) level of business value over a reasonable planning horizon (e.g., three to five years). This type of planning effort may represent a shift of gears for many procurement practitioners. For this and other reasons, we suggest and outline a process in this Spend Matters Plus research brief that is intended to help practitioners get started and pointed in the right direction.

Strategic Technology Planning: A New Imperative for Contingent Workforce and Services Procurement (Part 1) [Plus +]

For many years now, planning for CW/S technology has been largely tactical, focusing almost exclusively on the capabilities and effectiveness of one VMS solution or another. Technology planning at a strategic level has been rare in CW/S procurement functions, in main part because it has not been necessary in a relatively static technology and supply chain environment. Need a core contingent workforce technology to manage processes, compliance, risk and cost? Adopt a VMS (or work through your MSP to get one). Seeking a specialized category solution? Work with the business owner (e.g., legal, telecom, facilities) to engage a vendor that meets everyone’s needs.

But in recent years, many aspects of the environment in which CW/S procurement executes its mission have begun to change significantly. Under these conditions, strategic planning becomes necessary. Because technology is now and will be presenting CW/S procurement functions with new opportunities to add value to their organizations in a variety of ways, allocating time and resources to conducting strategic technology planning is now an imperative. In most cases, this will mean starting from scratch. But foregoing strategic technology planning opens CW/S procurement to missed opportunities, core mission failure and possibly disruption.

In short: procurement, HR and IT organizations — not to mention line of business owners — need to work together to create their own CW/S technology information architecture through a strategic technology planning process. In Part 1 of this series, we build the case for strategic technology planning and provide an overview of what strategic technology planning means for a CW/S procurement function. In Part 2, we flesh out a targeted approach to CW/S procurement strategic technology planning and practical approaches for implementation within an organization.

Online Work Platforms and Enterprises: Survival of the Fittest or the Fastest? [Plus +]

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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.)

Digital Service Providers: Do They Require Your Attention and Why? (Part 2) [Plus +]

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In Part 1 of this series, we described and unpacked the topic of digital platform-based service providers, which represent a modest but growing spend category far outside of the scope of contingent workforce and services (CW/S) procurement programs. While they are not on procurement’s radar, Spend Matters believes these providers will increasingly become a significant part of organizations’ services consumption and spend over the next 10 years.

In Part 2, we review what is arguably the most successful sub-segment of these digital service providers, as well as revisit the question of whether they require your attention and why.

Next-Generation Digital Service Providers: The Who, What and Why for Services Procurement [Plus +]

An increasing number of digital, platform-based service providers are appearing today, and while they now represent a small category far outside the scope of most contingent workforce and services (CW/S) procurement programs, the spend they account for is growing.

Back around 2010, traditional BPO providers sought to introduce clients to digitally turbo-charged offerings. Though similar in concept, the providers appearing today represent a whole new generation of platform-based service providers, many of which were startups or didn’t exist in 2010. They did not arise with the scale and legacy of the BPO providers, nor did they occupy the category of major service providers of which procurement was aware and already oversaw.

Far from a passing fad, these next-generation digital service providers will become an increasingly significant segment of services consumption and spend over the next 10 years. We base our projections on solid, long-term trends evidenced in both the consumer and business sectors.

This Spend Matters Plus article defines this new generation of digital service providers and poses the entirely open question of whether they require the attention of procurement organizations tasked with managing services spend at this time. This question may be especially pertinent, given the significant similarities of digital service providers and traditional ones.

From blur to Maistro: Can Services Procurement Get a Life? [PRO]

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We recently had a briefing and demo by U.K.-based Maistro, which describes itself as “an AI powered platform and dynamic B2B Marketplace that optimizes the way companies buy business services.” Formerly blur Group, the company became Maistro following a significant restructuring that took place over the second half of 2017. Spend Matters has followed the company since 2013, but our coverage tapered off over the last two years as the company's condition worsened. However, since Maistro has been operating under new leadership for almost a year now, it may be time to turn the page and start a new chapter in our coverage.

With a new tagline, “Accelerated Procurement,” Maistro goes-to-market as a procurement-oriented “managed services” solution with an integrated online marketplace that consists exclusively of vetted service supplier businesses (not freelancers). While Maistro does participate in the workforce/services game, its combined characteristics differentiate it from other online freelancer/services marketplaces, such as Upwork, Freelancer, Fiverr and others.

Nonetheless, the work/services platform space is emergent and consists of hundreds of providers, with many well-financed and still searching for the path that will lead to scale adoption by large enterprises. Consequently, it is difficult to predict which providers may find the cure or end up in a platform graveyard, if or when there is a market shakeout. One thing, however, can be said about Maistro: Despite having many near-death experiences over the last four years, it appears to be rallying — albeit with an uncertain prognosis.

Why the Staffing and Contingent Marketplace is Failing Procurement [Plus +]

In our prior analysis of the services procurement market, we looked at the evidence showing how the staffing marketplace is failing procurement organizations. Today, we turn our attention to the “why” and the factors holding organizations back from gaining more value from their services procurement spend. This value includes greater savings, of course, but also reduced risk, increased compliance, improved talent management and recovered time to focus on innovation, continuous improvement and business outcomes.

We are not purporting any grand conspiracy of sorts here. Rather, the fundamental challenge with services procurement and the staffing industry centers on a supplier-led industry dynamic that has been able to break free from the bounds of how procurement manages all other spend areas, directing the buy-side rather than having to adjust its own sell-side driven business to maturing procurement expectations and requirements.

In this Spend Matters Plus analysis, a refresh of our 2014 series, we consider the “why” of the problem and go beyond the standard “fox watching the henhouse” issues with the traditional MSP/staffing market. Finally, to conclude this series, we will offer a prescription for changing the market from the inside out with procurement-led initiatives.

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.