Procurement Services - Premium Content

Five Scenarios for VMS 2025: Scenario 2 — Procurement Rules [PRO]

This is “Scenario 2” of the Spend Matters PRO series in which we consider five scenarios for VMS in 2025. These scenarios represent exploratory thinking (not predictions) on our part. And they are not necessarily meant to be mutually exclusive (in fact, multiple scenarios will probably co-exist in 2025). In any case, they are intended to be tools to assist planners and executives in their thinking about the future. Spend Matters' Founder Jason Busch explored the issues in an introduction to the series.

The first scenario, named “The Status Quo,” explored a world in which VMS continues to evolve and flourish (alongside other enterprise software solutions, such as HCM) as a distinct, specialized enterprise solution for sourcing of temps and, potentially, other forms of contingent workforce.

This second scenario, named “Procurement Rules,” explores a world in which procure-to-pay (P2P) — or even source-to-pay S2P — technology suites integrate or subsume the capabilities of VMS (or vice-versa?). A trendline to this scenario has already emerged. SAP Ariba and Coupa have embarked on such a path through acquisition, and other procurement solutions could follow, whether by acquisition/integration or as extensions of their own platform.

Category Analytics and Intelligence Providers: Defining and Exploring a Nascent Market for Procurement Solutions (Part 3 — Labor/Services and Transportation) [PRO]

Accurate intelligence and benchmarks on goods and services are essential to effective sourcing, yet few procurement organizations have comprehensive coverage for all data sources across all categories that they manage. So to help practitioners get a better lay of the category intelligence and analytics landscape, Spend Matters has begun a market scan of technology, data/benchmarking and cost-modeling providers that deliver “category analytics and intelligence” to procurement and other functions. And while few firms in the nascent mega market are perfectly alike, our initial findings have convinced us that category analytics and intelligence could become one of the most important provider markets for procurement to deliver best-in-class performance in the 2020s.

This four-part Spend Matters PRO brief provides an introduction to category analytics and intelligence market and an overview of select providers by category. Part 1 of this series defined what exactly the market consists of, potential ways to segment it, and a basic framework for comparing vendors within and across sectors. Part 2 provided an overview of providers in the direct materials, indirect materials and cross-category specialist (direct and indirect) sectors. This installment (Part 3) covers labor/services and transportation. Part 4 will cover IT, marketing and should-cost solutions.

Category specific providers mentioned in this brief include: Avetta, Bodhala, Chainalytics, Coupa, Brightfield TDX, DAT Solutions, HCM Strategies, Jaggaer, SAP Live Insights, Staffing Industry Analysts (SIA), TenderEasy, Trax Group and Sisense.

HCM Strategies: Vendor Introduction, Analysis and SWOT [PRO]

This Spend Matters PRO Vendor Introduction offers a candid take on HCM Strategies and its capabilities — features that help companies establish market-based salary/pay-rate and contingent labor rate benchmarks and gain related insights into the market and their own business patterns. The company provides services within the U.S. today but is targeting the UK for 2020.

This PRO brief also includes an overview of HCM Strategies and its solution offerings, a summary solution evaluation, a SWOT analysis and a selection checklist for companies that might consider the provider.

The Contingent Workforce and Services (CW/S) Insider’s Hot List: February 2020 [Plus +]

supply risk

Welcome to the February 2020 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 last Hot List, we covered the investment rounds at VNDLY and Qwil; Degreed’s acquisition of Adepto; Aquent’s solution for encouraging companies to provide “benefits” to their freelancers; and the kind of far-out idea (and reality) of a temporary staffing agency for robots and robots-as-a-service.

In the first month of 2020, we saw developments like wider adoption of blockchain, technology changes, big fundraising, more freelancer banking/payments, crowdsourcing and "New Law" in the area of outsourcing.

2020 & Direct Sourcing of Workforce/Services: What to Know [PRO]

Direct sourcing of workforce/services (DSW/S) has been one of the most consistent, rising trends in the evolving contingent workforce/services (CW/S) procurement space in recent years. To a limited extent, the sourcing of contingent workers with little or no involvement of third party intermediaries has been practiced by most organizations for decades. But more recently, it has been changing in several ways, driven by a number of factors, including the emergence of fit-for-purpose technology. It is no coincidence, therefore, that there is a Spend Matters SolutionMap category — Direct Sourcing of Workforce/Services — that currently ranks nine technology solution providers (with more set to participate).

While the idea of sourcing and engaging workers directly (e.g., not through a traditional staffing supplier arrangement) seems simple enough, there are various forms that direct sourcing takes (depending upon the business use case) and a variety of ways that technology is being used to enable it. In that respect, it is not that simple. But it is something CW/S practitioners should be following — and probably getting prepared to evaluate — in 2020.

This Spend Matters PRO brief explains direct sourcing of workforce/services (DSW/S) in the context of 2020 and provides input for practitioners trying to understand how direct sourcing applies in their own specific business contexts/use cases. It discusses the considerable diversity of solution providers/solutions (based on our SolutionMap data and other observations) and how that diversity is relevant to supplier shortlisting and selection (including the role of the Spend Matters’ DSW/S SolutionMap framework).

2020 Predictions for Services Procurement: Scenarios and Black Swans [PRO]

As discussed in “2020 Problems in Services Procurement — No Light at the End of the Tunnel,” services constitutes the largest and perhaps most poorly managed non-payroll spend category. It covers an expansive set of sub-categories, from temporary staffing to other forms of directly sourced contingent workforce to a multitude of contracted B2B services (consulting, MRO, travel, IT management, legal, marketing).

“Human performance,” usually connected with the use of tools and resources/assets, has traditionally been the basis for the production and delivery of services. But services also have been becoming more digitized, both in terms of production and delivery. And there are now pure digital services, the production and delivery of which involve little or no human performance. Many are familiar with IBM Watson, but for nearly every form of human-based service, there is some type of digital/augmented solution that exists or is being worked on by an upstart firm. Look no further than the legal services industry, transportation or BPO industry and the impact that AI is having on those services.

There is no hiding the fact that gaining control over services represents a massive, complex undertaking — without exaggeration, a new frontier — for procurement. And obstacles and barriers to making significant, rapid progress abound, including inadequate (incomplete, fragmented) technology solutions and legacy enterprise architecture as well as organizational inertia. Still, there is hope — and there is innovation afoot.

This outlook and backdrop strongly conditions our view on what is likely to happen in 2020. Most of us would probably place our bets on a continuation of recent trends in the space (see “Incremental Scenarios” below). But we cannot rule out unexpected events/developments over the course of the year, either (see “Disruptive Scenarios” below).

The Contingent Workforce and Services (CW/S) Insider’s Hot List: January 2020 [Plus +]

Welcome to the January 2020 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 catch up on developments in December as we head into a new year. Seasonally not an active month, December was punctuated by a few key investments in CW/S solution innovators and a number of developments, which indicates that innovation continues to gather steam in the CW/S space.

Sourcing and Engaging the Independent/Freelance Workforce — An Emerging Ecosystem? (Part 5) [PRO]

This Part 5 is the conclusion of a Spend Matters PRO series that has explored different aspects of the state of an independent contract workforce (or ICW) ecosystem and its current importance for contingent workforce/services (CW/S) procurement practitioners and executives in enterprise organizations.

Part 1 of this series was published a year ago, and an impetus for this series was a research brief published in late 2015 (“Sourcing and Engaging the Independent Workforce: FMS and Beyond — Filling in the ‘White Space’ ”). That post first raised the question of whether we could expect the formation of a new type of digital ecosystem that enabled enterprise organizations and IC workers to engage in a sustainable, mutually beneficial way. Three years later, the question was taken up again, but in the context of whether enterprise CW/S procurement practitioners should be paying more attention to — or doing more to leverage — ICWs.

The final part of this series summarizes the research in Parts 1-4. It also presents our thinking on whether CW/S procurement practitioners should become more serious about ICWs as a part of their contingent workforce programs. Part 5 concludes with some suggestions for practitioners.

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.