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A new species: Specialist providers of contingent workforce rate benchmarking/analytics [PRO]

Specialist providers of contingent workforce rate benchmarking/analytics services have emerged over the past several years. Based on our market scan, we have identified three such standalone, vendor-neutral providers — PeopleTicker, Brightfield Talent Data Exchange (TDX) and HCM Strategies. All three will be profiled at a high level in this Spend Matters PRO brief. A secondary goal of this brief is to begin to explore a broader, systematic research approach to understanding and comparing different rate benchmarking and analytics capabilities.

The estimation, or benchmarking, of contingent workforce “market” labor rates by job category is certainly not new, and rate benchmarking is widely used — or made available as a service — in practically every part of the contingent workforce supply chain (e.g., staffing suppliers, MSPs, VMS solutions, et al). But rate benchmarking data sources and methodologies have remained somewhat in the shadows for years.

Rate benchmarking produced within — and as just a part of — those contingent workforce supply chain providers has not made it easy to assess what lies behind the many different benchmarking approaches that are in use today. However, the emergence of third-party, vendor-neutral rate benchmarking and analytics service/solution specialists may help in doing so.

To compound the problem, there is currently no established framework that would allow for a comparison of different providers’ rate benchmarking approaches and allied capabilities (e.g., self-service, scenario-building and other capabilities). And, as “advanced analytics” (based on techniques such as data/text mining, machine learning, pattern matching, semantic analysis, simulations, etc.) provide a new foundation for rate benchmarking, the differentiation of approaches becomes more important over time.

Now, let’s take a look at PeopleTicker, Brightfield Talent Data Exchange (TDX) and HCM Strategies and then make some high-level observations about the group.

The Contingent Workforce and Services (CW/S) Insider’s Hot List: December 2019 [Plus +]

Welcome to the December 2019 edition of Spend Matters Insider’s Hot List, a monthly look at the contingent workforce and services (CW/S) space that’s available to our PLUS and PRO subscribers. For those new to the Hot List, each edition covers the prior month’s important or interesting technology and innovation developments in the CW/S space.

As we head into December and the holiday season, we look back on the developments in November: Small service providers now ‘Open for Business’ on LinkedIn; Is the job board Indeed going gig?; Fiverr grows topline, not bottom; crowdsource testing; and news about financial services for freelancers.

An inside look: Premier Inc. acquires Medpricer, a purchased services procurement solution [PRO]

healthcare

Let’s take a closer look at the Premier Inc. acquisition of Medpricer announced recently. For this Spend Matters PRO brief, we talked with leaders of both firms to get further insight into the acquisition and what it means. We also offer some reasons why this development is significant for procurement practitioners. Premier Inc., a $1.2 billion diversified healthcare improvement company, has acquired Medpricer, an innovative solution provider focused on the management of the enormous and largely unmanaged “purchased services” category of spend within hospitals and healthcare systems.

Premier bought Medpricer for $35 million and expects the acquisition to be modestly accretive in 2020. The company has stated that Medpricer will continue to operate as an independent unit and brand, and will remain GPO neutral, while augmenting Premier’s own technology and analytics capabilities. Medpricer’s CEO will continue to lead the business as part of Premier’s Supply Chain Services segment.

Headquartered in Charlotte, North Carolina, Premier describes itself as “a leading healthcare improvement company, uniting an alliance of more than 4,000 U.S. hospitals and health systems and approximately 175,000 other providers and organizations to transform healthcare.” The company leverages integrated data and analytics, collaboratives, supply chain solutions, and consulting and other services to promote "better care and outcomes at a lower cost.” It also collaborates with members “to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide.”

“Medpricer’s spend management platform,” the company has noted, “uses artificial intelligence to validate, compare and onboard purchased services suppliers; track and measure spend by category, supplier and facility; benchmark contracts terms to ensure competitive rates; set and manage specific savings targets; and manage contract compliance.” It was also noted that purchased services — which “often fall outside the scope of national group purchasing contracts” — are estimated to “account for up to 30% of a typical healthcare provider’s non-labor expenses, and represent a total addressable acute care market of approximately $160 billion.”

Premier told Spend Matters that “Medpricer is an important component of its evolving cost management strategy and is an integral next step in our continuing expansion toward a fully integrated purchased services platform.” Premier also noted that it has the “ability to fund and materially accelerate the development of Medpricer’s offerings.”

Spend Matters recently posed some questions to Premier. We received written answers and also had an opportunity to talk with Premier’s Senior Vice President of Supply Chain, David Hargraves, and Medpricer’s President and CEO, Chris Gormley.

Sourcing and Engaging the Independent/Freelance Workforce — An Emerging Ecosystem? (Part 4) [PRO]

IQNavigator

In Part 4 of this five-part Spend Matters PRO series on the emerging independent contract worker (ICW) digital ecosystem, we will examine “worker-facing services.” These are services designed and offered to independent workers by providers, many of which may not have existed five years ago.

Part 1 of this series discussed the size, growth and constitution of the ICW population in the U.S. (it cuts across many types of work/workers: freelance creatives to construction workers, Uber drivers to truck drivers, etc.). Part 2 of the series examined the extent to which a digital ecosystem has been forming to provide enterprises with the required capabilities to source, manage and maximize the value of this ICW population. In Part 3, we described (and represented graphically) the different components of the emerging digital ecosystem today (see the ecosystem graphic below).

Part 4 looks at the extent to which a part of the ICW digital ecosystem is forming to provide ICWs (and incorporated microbusinesses) with the access to the opportunity pathways and the support/services (the worker-facing services) that they require to function as viable “operators.” It provides an overview of the service and service provider landscape and concludes with some comments leading into Part 5.

What is a VMS today? Spend Matters’ SolutionMap helps define it 

work intermediation platform

Vendor management system (VMS) solutions have been synonymous with contingent workforce technology for the past two decades, but the functions associated with it have been evolving.

It began as a fit-for-purpose software application for managing temporary staffing suppliers and temporary workers, but over the past 10 years, most of these solutions have added functionality or modules to manage contract services/SOW suppliers and service delivery engagements. In the past five years, some providers of these solutions have grappled with the VMS term and concept. Today, most providers of these types of solutions still refer to themselves as VMS solutions, although their solution footprints vary.

When Spend Matters introduced its first SolutionMap for Contingent Workforce and Services (CW/S) enterprise technology in Q2 2018, it decided to forgo the use of the term VMS in favor of developing separate SolutionMap rankings for distinct technology solutions that addressed three extended workforce categories: (1) Temp Staffing, (2) Contract Services/SOW and (3) Direct Sourcing of Workforce/Services (formerly named “Independent Contract Workers”). This was done in part to sidestep the growing variability of the meaning of the term VMS. But more importantly, it was done based on the belief that the three categories provided a more accurate way to analyze and compare solution capabilities (to be discussed further below).

This SolutionMap Insider brief examines the current status of VMS and how Spend Matters draws a tentative line around what constitutes a VMS solution today. It also provides a high-level view of the “VMS” capabilities and an anonymized analysis of corresponding SolutionMap scores. Lastly, it concludes with questions posed to practitioners and providers about the validity of the definition and concept of VMS presented in this brief.

Utmost’s Extended Workforce System: What’s Behind It, What Is It and What Does It Mean for Enterprises? [PRO]

It is important for enterprises to have a handle on the whole of their contingent (or extended) workforce. Not just temporary workers supplied by staffing firms, but also workers that are engaged through service providers (ranging from building maintenance companies to management consulting firms and BPOs ). And then there are the independent and freelancer workers of all kinds, however they are classified.

A new workforce technology start-up, Utmost, thinks it’s very important to enterprises — and workers too. The company recently announced the launch of its core platform, Utmost Extended Workforce System, and an $11 million series A round led by Greylock Partners and a partnership with Workday Ventures. The company, with offices in San Francisco and Dublin, was founded by two former Workday executives and a former Groupon technologist.

With respect to where there is a critical gap in the solution marketplace, the co-founder and CEO of Utmost, Annrai O’Toole, said in a recent announcement: “With hundreds of millions of extended workers engaged with companies today, there is an undeniable shift happening, yet it is clear that businesses need new, seamless solutions to transparently manage this population.”

Greylock partner Sarah Guo offered a starker assessment of the gap in the market: “Companies in every sector engage with an extended workforce, but the rigid and clunky systems used to manage that workforce are stuck in the past. Utmost is a cloud solution for the modern, flexible enterprise, and offers a worker-centric approach to manage this population that enterprises previously lacked.”

To be clear, Utmost is building an advanced open-technology platform that will be valued by enterprises right out of the gate. But, just as important (if not more so), the company is also taking a “worker-centric” approach, starting with easy-to-use mobile apps and efficient engagement workflows for external workers (and it is also working on delivering a set of enabling services to these often severely underserved workers).

In this PRO brief, Spend Matters examines the conditions that are creating a demand for a solution like Utmost Extended Workforce, provides an explanation of the solution and looks at what it means for enterprises.

Brightfield (TDX) Raises a Whopper of a Round: Analysis + Implications for Contingent Workforce/Services Technology [PRO]

Earlier today, Spend Matters reported that a $53 million Series A funding round was raised by Brightfield (TDX), formerly a consulting firm that became a provider of AI-derived market intelligence for the contingent workforce/services community. Spend Matters believes the size of the round — very large for a series A — is indicative of a number of factors beyond the fact that Brightfield (TDX) is a more mature organization in terms of product, customers and revenue than most companies going up for an earlier stage funding round.

Indeed, Brightfield “2.0’s” rapid data-driven success after its pivot — and the comparatively gargantuan investor vote of confidence at the Series A level — represent several converging trends. We will explore these in this Spend Matters Nexus research brief, which also provides overall analysis and key takeaways for services procurement providers, investors and practitioners. Our analysis begins with a company and solution overview of Brightfield and its TDX platform, Talent Data Exchange.

Jason Busch serves as Managing Director of Spend Matters Nexus, a membership, research and advisory organization serving technology acquirers (private equity, corporate development, etc.) and CEOs in the procurement and finance solutions marketplace (including contract management, B2B marketplaces/connectivity, indirect procurement, services procurement, direct procurement, commodity management, payment, trade financing, GRC/third-party management and related adjacent sectors).

The Contingent Workforce and Services (CW/S) Insider’s Hot List: October 2019 [Plus +]

Welcome to the October 2019 edition of Spend Matters Insider’s Hot List, a monthly look at the contingent workforce and services (CW/S) space that’s available to our PLUS and PRO subscribers. For those new to the Hot List, each edition covers the prior month’s important or interesting technology and innovation developments in the CW/S space.

Let’s check on September’s developments, like our update of vendor rankings in SolutionMap, a look at California’s new AB-5 law on employee classification, industry partnerships like the Upwork-Workforce Logiq plan, and a look at this question: What do Match.com, Tinder and gig platforms have in common?

Workforce Logiq Partners with Upwork — What’s Going On? [PRO]

Workforce Logiq recently announced its partnership with Upwork, the largest global, online freelancing platform (in terms of spend, about $2 billion annually). The partnership — which is exclusive — is the first, officially launched, commercial relationship between Upwork and a managed services/solutions provider like Workforce Logiq.

To understand the deal, let’s look at Workforce Logiq’s history and where it’s going. Before we get to an interview with Workforce Logiq CMO David Trachtenberg, it’s important to see how this veteran provider got here.

The company is a well-established, global contingent workforce services and solutions provider, that is, a provider of MSP and other workforce solutions/services (such as contractor sourcing, compliance and payrolling services). With about $3 billion in annual spend under management, Workforce Logiq is also one of just two major MSPs that (a) are “vendor neutral” (i.e., are not a business unit of a larger parent company that has its own, proprietary staffing firm network) and (b) can offer clients a proprietary VMS solution.

Workforce Logiq has been undergoing a transformation in the past year or so. The company has a new senior leadership team put in place under Jim Burke, CEO and industry-outsider, who joined the company in spring 2018. The company also changed its name/branding from ZeroChaos at the start of 2019 to reflect its break from the past and look to the future. In a July 2018 interview with Spend Matters, Burke said: “I think of (Workforce Logiq) as a technology-enabled services business. That means we use our proprietary technology, data and global team of industry expert advisers to deliver a better service on behalf of our clients.” Accordingly, Workforce Logiq has been re-aligning to the market by providing the services and solutions that customers need today, investing in technology infrastructure and working with ecosystem partners to address customer requirements and pursue innovation.

CA Assembly Bill 5 is Law: Is the gig economy doomed? (Part 3) [PRO]

sharing economy

Last week, with a stroke of California Gov. Gavin Newsom’s pen, CA Assembly Bill 5 (AB-5) became law and cast the gig economy into question. Did it doom the gig economy and its contract workers? And what does it mean for businesses?

Technically the law takes effect Jan. 1, but its future, nonetheless, remains uncertain for many reasons. And even if the law does not get watered down or blocked in the courts or overturned by state referendum, the jury is still out on whether AB-5 will deal a death blow to the gig economy or just change it. The signing of AB-5 “into law,” to a significant degree, marks the start of a new phase of debate and uncertainty about the question of whether a worker is an employee (EE) or an independent contractor (IC) and what the future of the “gig economy” — an ambiguous term if ever there was one — will be.

Earlier in this series, we referred to the gig economy as “an ecosystem of businesses and many types of workers” and governed by laws — “that part of the labor market where businesses, including online ‘gig platforms,’ engage workers as non-employees.” We believe this is the broader context in which this law should be analyzed (because, believe it or not, it’s not just “all about” Uber, et al, which represent just one segment of workers classified as ICs. According to our estimates, based in part on Beacon Economics report, “Understanding California’s Dynamex Decision 2018,” ICs make up about 19% of the California employed workforce of about 20 million workers (upwards toward 4 million ICs in the state). And over 90% are in industry segments other than “transportation.”

In Part 3 of this three-part Spend Matters PRO series, we will try to assume the business perspective and provide our thoughts on the newly passed law and the fate of the gig economy as well as point to potential implications for contingent workforce managers, HR and other executives.

CA Assembly Bill 5 passes: Is the gig economy doomed? (Part 1) [PRO]

California Assembly Bill 5 (AB-5), recently passed by the state Senate, changes the definition of who is an employee and who is a contractor. It is expected to be signed by the governor and is slated to go into effect January 2020. The new legislation, which codifies the 2018 state Supreme Court decision in the controversial Dynamex civil litigation case and clarifies its application, is sending shockwaves through the ecosystem of businesses and workers that constitute the so-called gig economy (that part of the labor market where businesses, including online gig platforms like Uber, engage workers as non-employees).

The main issue, one that has become increasingly fraught over the years, is whether a worker should be classified as either an independent contractor (IC) or an employee (EE) of a business, given the conditions and characteristics of the engagement. Anyone who follows this matter knows that determining the classification of a worker is not a simple matter. The presence (or absence) of laws and interpretations at the national, state and even municipal levels and the promulgated regulations of different governmental entities responsible for taxation, unemployment compensation, worker’s compensation insurance, etc. means a worker may be classified differently depending upon the reference point.

In Part 1 of this three-part Spend Matters PRO series, we will cover the background/context of AB-5 and the essential points of the bill. In Part 2, we will examine different perspectives about the law, and Part 3 will provide our own thoughts and examine some potential implications for contingent workforce managers.

The Contingent Workforce and Services (CW/S) Insider’s Hot List: September 2019 [Plus +]

Welcome to the September 2019 edition of Spend Matters Insider’s Hot List, a monthly look at the contingent workforce and services (CW/S) space that’s available to PLUS and PRO subscribers. For those new to the Hot List, each edition covers the prior month’s important or interesting technology and innovation developments in the CW/S space.

We’ll look at several hot topics: Upwork’s review of disagreements about the size of the freelance economy, changes in worker classification, drone deliveries, a funding round by healthcare jobs marketplace provider Nomad Health, and how freelancers are changing banking and finance.