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Procurement Services

How to Attack Marketing Spend (Part 2) [Plus +]

The next topic we must address in considering the basics of attacking marketing spend is potentially the most sacred of all: agency selection. In considering how best to engage in this area, it is important to consider the costs of both sides going through the process. For agencies, the costs to manage and respond to an RFP can be quite high. Some agencies estimate their total cost at around $200,000 per RFP — on average!

Granted, the bulk of this expense comes in the form of soft costs. But the undertaking is considerable, and carefully vetted among agencies. This point is important to emphasize: agencies are quite picky about the clients and projects they bid on. We hope the following example, based on how one West Coast-based agency approaches RFPs, provides insight into the best means of engaging the right set of firms.

The Emerging World of Digitally Intermediated Work: Old vs. New — or Something Else? (Part 2) [PRO]

The digital transformation in contingent labor and outcomes-based services within procurement today is happening now. In contrast to indirect procurement and direct procurement, where traditional intermediaries and sourcing models have remained largely untouched by limited new disruptive entrants, the services procurement sector is in the early stages of transformation due to fundamental changes in labor-driven connectivity to demand.

Although adoption of these solutions has varied to date, incumbent staffing, consultancy and other labor intermediaries are indeed coopting and engaging these new models — an important indicator of their trajectory. Moreover, to deny this trend is to turn your back on dozens of solutions that connect specialized labor markets with end users in the business, not to mention the hundreds of millions in funding that these new, innovative intermediaries have received in recent years.

This two-part Spend Matters PRO research brief explores the evolution of digitally intermediated work. In the first installment, we explored digitization in the context of new staffing and labor models today, explaining how these new models can complement and work alongside traditional incumbent approaches. We also explored how organizations can incorporate labor-based digitization into familiar contingent and services procurement models and practices. In Part 2, we turn our attention to summarizing the key trends that procurement, HR and IT practitioners need to be aware of, and we provide key recommendations to put digital services transformation to work for you — rather than against you.

The Emerging World of Digitally Intermediated Work: Old vs. New — or Something Else? (Part 1) [PRO]

digital business transformation

Fact: New, digitally enabled models and marketplaces for sourcing labor, talent, skills, expertise and services have started to emerge in recent years. Yet “talent brokers” have always existed in the labor market — work arrangements have long been intermediated by staffing firms and service providers. Viewed from this lens, what is happening now is not so much disintermediation of those intermediaries but rather the emergence and evolution of new intermediation models that, at their core, take advantage of digital technologies. While these models are appearing in the market as new solutions offered by new companies (e.g., Upwork, Catalant, Hired, WorkMarket), gradually they are also being incorporated and adopted by incumbent staffing and service provider intermediaries (e.g., Randstad, GRI, MBO Partners, PwC, Deloitte).

This two-part Spend Matters PRO research brief explores the evolution of digitally intermediated work. In the first installment, we take inventory of the current staffing and labor models today and how digitization alters the structure and properties of work compared with staffing models. We also explore the comparative sourcing and provisioning of digital talent, as well as how organizations can structure and consume these new services — compared with traditional approaches. Finally, we consider the current state of digitally enabled work arrangements and intermediaries. In Part 2 of this series, we summarize and structure key takeaways from all of the current trends and provide recommendations for practitioners.

IT Talent and Services Sourcing: Innovation in a Challenging Environment (Part 2) [Plus +]

IT

In this two-part series, we examine the state of technology-based sourcing, specifically in the IT workforce/services category. In Part 1, we looked into environmental factors that are driving innovation and other elements that are motivating openness to new approaches. In Part 2, we investigate different kinds of innovative sourcing solutions within the IT category and explore the emergence of an alternative supply chain or work/services sourcing ecosystem. We also provide recommendations for organizations to nurture and build alternative sourcing models and programs alongside existing IT services procurement channels. Providers reviewed in this brief include Hired, Toptal, Upwork and Kaggle.

IT Talent and Services Sourcing: Innovation in a Challenging Environment (Part 1) [Plus +]

Technology-based innovation in workforce and services sourcing has been a major focus here at Spend Matters over the past years. And though we have tracked the trend of increasing work platform specialization (platforms serving up anything from data scientists to marketing content deliverables to food service workers), we have not really zeroed in on sourcing innovation in any specific workforce or services category.

In this two-part Spend Matters Plus brief, we take a look at what’s happening in the IT workforce/services category. In part 1, we look into environmental factors that are driving innovation and other elements motivating openness to new approaches. In part 2, we examine some examples of different kinds of innovative sourcing solutions in the category.

How Innovative is Your VMS Provider? [Plus +]

disruption

What does it mean when a technology provider is innovative — or not? Innovation has been defined as the application of better solutions that meet new requirements, unarticulated needs or existing market needs (Maranville, 1992). By this definition, is your vendor management system (VMS) provider innovative — or not? In this Spend Matters Plus brief:

  • We discuss why identifying and calibrating VMS innovation is especially important today.
  • We pose the obvious, practical question: How can you judge if a VMS solution is innovating?
  • We provide an up-to-date framework to help you make that assessment (based on specific innovation criteria specific to services procurement).
  • We suggest how to use this framework in the context of vendor evaluation and vendor management (performance/innovation management).

Legal Sourcing and Billing: Category Sourcing, Maturity Models and Services Procurement Linkages (Part 2) [Plus +]

forced labor

Legal spend is a bit different than other categories in part because it cuts across all aspects of the business and the lines between “make” and “buy” can be drawn differently based on customer, need and timing. The fundamental challenge in this regard is that legal spending must be aligned with sales (customers), procurement (vendors), finance and operations (products) to deliver the right level of value. If it’s seen as a siloed compliance function, legal is doomed to languish as a subperforming cost center. In considering legal sourcing maturity, it’s essential to keep this in mind.

Legal Sourcing and Billing: Category Sourcing, Maturity Models and Services Procurement Linkages (Part 1) [Plus +]

UpCounsel

Around 2005, while working for Procuri, one of the authors of this article was involved in a large legal services e-sourcing project (with reverse auction at the end) for a Fortune 10 firm that spanned law firms across the U.S. At that time, we included a substantial amount of spend segmentation into the event. From my experience and research, we were one of the first to engage in a procurement legal sourcing effort of this magnitude.

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

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 PRO research brief that is intended to help practitioners get started and pointed in the right direction.

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

cheeta

In this PRO 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.)

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

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.

Beyond VMS: The Creation of a New Technology Category for Contingent Workforce and Services [PRO]

For over 20 years, vendor management systems (VMS) have been the sole enterprise technology category for contingent workforce and services (CW/S) procurement. Within that category, especially over the last seven years or so, most VMS solutions have been (to a lesser or greater extent) evolving, upgrading their technology, deepening their core functionality and expanding the scope of the kinds of spend that can be managed. One prominent example of the latter has been the development of SOW/services management capabilities. A less prominent example has been the development of functionality for managing independent/contract workers. Finally, some VMS solutions have begun to develop digital sourcing solutions, which in some instances will link to online work platforms.

In many ways, this evolution parallels the shift from largely point solutions for transactional indirect e-procurement technologies to broader source-to-pay (S2P) and procure-to-pay (P2P) suites, networks and platforms. But it is also different, in that it takes advantage of more recent digital enabling technologies, as well as a fundamental shift in underlying workforce dynamics in the market. In other words, it is both “bottoms up” technically and driven by external forces, as well — a perfect recipe for digital disruption. This Spend Matters PRO research brief explores the creation of this new category, which we believe will reshape the current VMS-dominated services procurement ecosystem and drive existing providers to evolve and innovate in new ways.