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An Executive’s Guide to Direct Sourcing of Contract Work/Services (Part 3) — What To Pay Attention To [PRO]

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Direct sourcing of contract work/services is an emerging, alternative way of tapping into pools of contract workers and service providers that are not available through established sourcing channels provided by procurement. Senior executives may be hearing more about this phenomenon, or their organizations may already be embarking on an initiative. As such, a clear understanding of today’s direct sourcing of contract work/services may be needed. This three-part series is intended to help executives to get a leg up.

Part 1 of the series discussed how direct sourcing today is different from the past and what it is now. Part 2 reviewed the landscape of direct sourcing solution providers and looked at some of the purpose-built technology solutions available today. This final Part 3 offers executives suggestions on what to pay attention to if they or a part of their organization begins moving in this direction.

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

Welcome to the July 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.

In the last Hot List, we covered key events and developments that took place in May, a pivotal month in the COVID-19 crisis. Among those were the first damage-control numbers reflecting the dramatic cut earlier this year in contingent workforce jobs by organizations across the U.S.

June seemed to start with a high level of business optimism, and the Dow reached a peak of 27,572 on June 8. But by the end of the month, large parts of the country have started to reapply COVID-19 restrictions, and the economic recovery could be heading for its first major bump in what is going to be a long road.

In the CW/S space, there was a lot going on, which we’ll dig into now before heading into the Independence Day weekend.

Spend Matters previews Everest Group’s contingent workforce management (CWM) best-practices study [PRO]

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The management consultant and research firm Everest Group recently conducted a survey to get a clearer picture of how well organizations manage their contingent workforces, what practices they have adopted and to what extent.

Spend Matters assisted in the survey design, and Everest Group completed the survey and analyzed the data using its Pinnacle Model framework. The firm will soon be publishing its Pinnacle Model report, “How Best-in-Class Organizations Manage Their Contingent Workforce.”

Earlier this year, Spend Matters and Everest Group joined forces to produce three online sessions based on the findings (video recordings are available for Part 1, Part 2, Part 3).

In this Spend Matters PRO brief that has been unlocked for our readers, we preview a subset of the survey results. The brief begins with a short explanation of Everest Group’s data methodology. It then discusses the five areas that provide a representative picture of and key insights into the current environment. The brief concludes with some of our thoughts on where things stand today — not so much for high-performing organizations, but for low-performing ones.

Extended Workforce Tracking Solutions: Can They Fill Your Gap in Visibility, Control? (Part 3) — Analyst Perspective [PRO]

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Today, we’ll take a big-picture view of the sector for extended workforce tracking solutions, and we’ll offer some tech selection considerations.

Part 1 of this three-part Spend Matters PRO series outlined the three general types of potential solutions (VMS, FMS and EWS, extended workforce systems). And Part 2 presented overviews of three providers/solutions that gave concrete examples of those types.

The examples showed that there are solutions that offer capabilities that could enable extended workforce tracking and management for an organization. They also showed that solutions vary in different ways that will impact suitability/value of a solution for a given organization (e.g., whether an organization is using a particular enterprise solution like Beeline, SAP Fieldglass, WorkMarket; the extent of requirements for a mobile solution, etc.). From the standpoint of organizations thinking about their current options, it is a complicated and evolving solution space.

Part 3 will now close the series with an analyst perspective on the current state of extended workforce solutions and suggested considerations for business executives and practitioners seeking technology solutions for the comprehensive tracking/management of their extended workforces.

Extended Workforce Tracking Solutions: Can They Fill Your Gap in Visibility, Control? (Part 2) — A Look at 3 Providers [PRO]

SciQuest

In Part 1 of this three-part Spend Matters PRO series, we asserted that amid the COVID-19 crisis, some organizations may be focusing their attention on and gaining visibility into their external or extended workforces (comprised of temporary staffing workers, independent contract workers and service provider workers). Considering that business practitioners might be thinking about available options for enabling technology, Part 1 also examined the landscape of solutions that could potentially enable companies to track, gain visibility into and control their entire extended workforces.

The landscape was broken down into three general types of solutions:

  • VMS (related to or based on vendor management platforms)
  • FMS (based on freelancer management systems/direct sourcing solution platforms)
  • EWS (extended workforce system designed as a platform for managing all workers)

Part 2 of the series offers summary overviews of three providers that serve to illustrate one of the three types.

Part 3 will close the series with an analyst perspective on the current state of extended workforce solutions and suggested considerations for business executives and practitioners.

Three vendors have been chosen only to highlight the issues and give concrete examples of what’s in the market. Let’s look at the providers/solutions: Beeline, ADP’s WorkMarket and Utmost.

Extended Workforce Tracking Solutions: Can They Fill Your Gap in Visibility, Control? (Part 1) — Landscape Overview [PRO]

As the economy begins to tentatively lurch forward amid the coronavirus disruption, and large and midsize organizations begin to reconstitute their workforces and supplier relationships for a new normal business environment, we may see an adjustment of focus on their flexible, non-employee workforces.

We do not know what organizations’ extended workforces (a mix of temporary staffing, service provider or independent contract workers) will look like by the end of the year (and it is something that will certainly vary by industry segment/type of business and even individual company).

But it would not be outrageous to assume that pandemic lessons learned and uncertainty (about even the short-term future) will translate into organizations that are more flexible and reliant on extended workforce as ever before (and perhaps more savvy about the deployment of their workforce, both employees and non-employees).

Organizations that are recognizing that their visibility into their extended workforce is incomplete may be wondering about how this problem can be overcome, fairly quickly and at the least cost possible. As any good procurement practitioner knows, VMS solutions have been the work horses for tracking contingent workforce in the past, but that has largely been limited to temporary workers deployed from staffing suppliers. Beeline and SAP Fieldglass provide extended workforce tracking modules that enable basic tracking of any type of non-employee worker (without the VMS functionality).

New solutions have emerged in recent years that may be able to serve the purpose of tracking and, to some extent, managing the full breadth of extended workforce (temporary staffing, service provider or independent contract workers). Some of these solutions provide VMS capabilities, while others were not conceived to do so, but they were designed to encompass all worker types (in some cases employees in addition to non-employees).

This three-part Spend Matters PRO series focuses on solutions that may enable organizations to gain visibility into their entire extended workforces. Part 1 focuses on the state of technology solutions that organizations could use to keep track of their extended workforces, breaking down three types or categories of solutions. Part 2 will provide a summary of a solution/provider from each of those three categories, and Part 3 will offer analyst insights on what organizations should be thinking about as they evaluate their options.

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

Welcome to the June 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.

May seems to have been a slow month in terms of new technology and innovation developments, with the exception of — perhaps not surprisingly — the freelancer/SMB neo-bank area. One possible explanation of this shift in attention of CW/S solution providers from expansion and innovation is that the coronavirus crisis has them focusing on customers and remaining a going concern. In any event, the June Hot List will cover the key developments that came across our radar last month.

Specialist Providers of Extended Workforce Rate Benchmarking and Analytics — Series Wrap-Up [PRO]

Back in December, we initiated a five-part series with a brief titled A new species: Specialist providers of contingent workforce rate benchmarking/analytics. In that brief, we identified three third-party (standalone, vendor-neutral) providers that are, broadly speaking, data management and analytics providers and establishing a framework for analyzing providers, capabilities and services from a business-buyer standpoint.

The subsequent three parts of the series reviewed and analyzed each of those providers — PeopleTicker, HCM Strategies and Brightfield (TDX) — and their solution offerings. While all three have been centered around salary and rate benchmarking service/capabilities, they have also extended, to greatly varying degrees, their workforce-related analytics offerings. (See their Vendor Analysis profiles here, here and here.)

In this fifth and final part of the series, we synthesize our findings and provide insights into the market and the differences among the vendors. Spoiler alert: The three providers are quite different and will variously fit different types of organizations with different needs. We also discuss our research approach, moving forward on a broader basis.

When we started this series in December 2019, we could not have imagined what would lie ahead of us and where the world economy, businesses and workers would be now. But we are certain that we are entering a new economic and business environment in which data and analytics will be far more critical than ever.

Our perspective on this situation is reflected in our ongoing series (Coronavirus affects the world of work — How can businesses cope with the COVID-19 outbreak? (Part 1) and Coronavirus affects the world of work (Part 2): Facing the next phase of the crisis); and the importance of workforce data and analytics in this crisis period is discussed in this CORONAVIRUS RESPONSE series brief.

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

This month’s Hot List clearly shows that April was certainly one in which developments and innovation were not dampened amid the COVID-19 crisis. As they say, “necessity is the mother of invention.” We’ll let you decide if that has been the case in our industry ecosystem as you read our Hot List coverage.

CORONAVIRUS RESPONSE: Workforce data and analytics in a time of crisis [PRO]

In the contingent workforce and services (CW/S) category of Spend Matters’ Coronavirus Response series, our focus has been on solutions that are able to, at a minimum, help rapidly ramp up extended workforce to deal with resource shortfalls as well as manage and track as well as track and manage external workers, projects and services providers.

We are examining four categories of relatively new types technology-enabled CW/S solutions for: (1) sourcing and managing remote/online work; (2) sourcing and managing mobile-equipped workers across geographical locations; (3) direct sourcing of workforce and services; (4) and managing data and producing analytical outputs.

In this brief, we turn to third-party digital solutions for data management and analytics that organizations can use in a number of ways to cost-effectively source and manage their extended workforce (contingent workers and service providers’ workers). These solutions collect, manage and process large amounts of market data — and sometimes procurement data — and generate different types of value-added outputs for a variety of purposes.

A selection of data management and analytics solution providers — PeopleTicker, Brightfield (TDX) and ENGAGE Talent (a Workforce Logiq company) — will be highlighted below. This list, however, is not exhaustive.

The overall series addresses seven categories of technology solutions that can help in a crisis:

  1. Supply risk management solutions that include supply chain risk, CSR risk, supplier financial risk, etc. (Read this category’s PRO analysis and solution recommendations here.)
  2. Sourcing and commodity management, including advanced sourcing, direct sourcing, automated supplier discovery, and commodity management to help dynamically plan and source. (This category was updated April 23 and is discussed in-depth here.)
  3. Advanced procurement analytics to enable direct procurement and/or to perform “spend planning” when demand drops out or spikes. (Its profile for this series was updated April 22 and is available here.)
  4. Procure to Pay (P2P) that emphasizes working capital, dynamic discounting, payment control and related finance priorities to help inject cash into the P2P process — especially for many cash-starved suppliers. (See details about this category here. It was updated April 24.)
  5. Fraud, P2P and vendor management safeguards when new suppliers need to be set up quickly, and also when lowlife fraudsters try to use the pandemic as a way to steal money and IP. (Its profile for this series is here.)
  6. Providers with deep contract analytics that can analyze a contract portfolio for affected contracts from suppliers (and customers) for not just force majeure clauses, but other related clauses that tie to the multiple risks popping up at once in the pandemic. (Read in-depth detail on this category here.)
  7. Contingent Workforce and Services: See the four items mentioned above.

These data management and analytics solution solutions that we’re examining today also typically provide market rate benchmarking to ensure bill rate optimization as well as insights into labor markets/sources. When it comes to rate benchmarking, solutions generally address both CWs/MSP as well as permanent employees.

The solutions can support organizations in optimizing their contingent workforce management programs based on data and key metrics and benchmark programs against other programs (in the aggregate). Some providers offer capability to cost out and price SOW projects. Some providers go further.

Organizations may find these solutions more useful than ever if they are anticipating using more contingent workforce or services or have more churn in those areas — or want to get a better total talent perspective on extended and permanent workforce roles in the organization and their compensation costs. In the current coronavirus environment, organizations will be looking fundamentally into all segments of their workforces to get what the organization needs to do business, while being as cost efficient as possible.

CORONAVIRUS RESPONSE: Contingent Workforce/Services — Can direct sourcing of work and services help in this crisis? [PRO]

In the contingent workforce and services (CW/S) category of Spend Matters’ Coronavirus Response series, our focus has been on solutions that are able to, at a minimum, help rapidly ramp up extended workforce to deal with resource shortfalls as well as manage and track external workers, projects and services providers.

We are examining four categories of relatively new types technology-enabled CW/S solutions for: (1) sourcing and managing remote/online work; (2) sourcing and managing mobile-equipped workers across geographical locations; (3) “direct sourcing;” (4) management of workers; and managing data and producing analytical outputs.

The overall series addresses seven categories of technology solutions that can help in a crisis:

  1. Supply risk management solutions that include supply chain risk, CSR risk, supplier financial risk, etc. (Read this category’s PRO analysis and solution recommendations here.)
  2. Sourcing and commodity management, including advanced sourcing, direct sourcing, automated supplier discovery, and commodity management to help dynamically plan and source. (This category was updated April 23 and is discussed in-depth here.)
  3. Advanced procurement analytics to enable direct procurement and/or to perform “spend planning” when demand drops out or spikes. (Its profile for this series was updated April 22 and is available here.)
  4. Procure to Pay (P2P) that emphasizes working capital, dynamic discounting, payment control and related finance priorities to help inject cash into the P2P process — especially for many cash-starved suppliers. (See details about this category here. It was updated April 24.)
  5. Fraud, P2P and vendor management safeguards when new suppliers need to be set up quickly, and also when lowlife fraudsters try to use the pandemic as a way to steal money and IP. (Its profile for this series is here.)
  6. Providers with deep contract analytics that can analyze a contract portfolio for affected contracts from suppliers (and customers) for not just force majeure clauses, but other related clauses that tie to the multiple risks popping up at once in the pandemic. (Read in-depth detail on this category here.)
  7. Contingent Workforce and Services: See the four items mentioned above.

In this brief, we turn to solutions for direct sourcing of workforce/services: enterprise solutions that enable businesses to “direct source” (without using staffing supply chain) and engage/manage their own affiliated (bring-your-own) contract workers and specialized service providers in private resource pools. These solutions typically take the form of horizontal, standalone software applications, while some digital work/services platforms are tightly coupled with their own front-end “direct sourcing” enterprise application (e.g., Upwork Enterprise). In the context of this brief, we will focus on the direct sourcing solutions that are horizontal, standalone software applications.

A selection of direct sourcing solution providers — WorkMarket (an ADP company), TalentNet and Shortlist — will be highlighted below. This list, however, is not exhaustive. Before you see the profiles of example solutions, we'll discuss this category of solutions, problems and use cases, and the solution rationale and value.

Coronavirus affects the world of work (Part 2): Facing the next phase of the crisis [PRO]

Part 2 of this Spend Matters PRO series will focus on where things stand with the coronavirus crisis about a month since many countries and most U.S. states issued stay-at-home orders. It also has been about a month since the publication of Part 1 of this series. Now, governments are considering plans for “re-opening” the economy that they will likely start executing in mid- to late May. Part 2 of this series will discuss approaching the transition/mitigation phase of the crisis. And it will consider how the challenges and priorities may be shifting for enterprise planners and human capital managers in procurement and HR.

This PRO coronavirus series is being posted outside our subscription paywall to inform more readers about handling contingent workforce/services issues during the coronavirus crisis.

In the middle of March, we published Part 1, in which we suggested that organizations, reacting to what eventually became a shutdown of major swaths of the U.S. economy, might begin thinking about the crisis in terms of four stages. We also suggested they begin thinking about relatively new, alternative digital solutions for sourcing and managing contingent workforce/services, given a new business environment that is both highly uncertain and subject to new constraints. (For more details, read Part 1.)

We made these suggestions to reinforce that:

* This crisis is not a one-time emergency to be stanched, but an unfolding of conditions over months, if not years.
* There is an opportunity — or a compelling force — to re-examine previous assumptions, strategies, approaches.
* There are alternative, digital means of sourcing and managing CW/S that can complement established technology and sourcing channels

We are continuing to recommend solutions for sourcing and managing CW/S in the “CORONAVIRUS RESPONSE” PRO series (here and here). At the same time, this series (“Coronavirus affects the world of work”) will continue to discuss problems and solutions, issues and opportunities over the different stages of the crisis.

We believe it is helpful to break down the coronavirus disruption into four crisis/post-crisis stages in order to discuss how different solutions can be usefully applied (or planned for):

* Reactive/acute
* Transition/mitigation
* Recovery/upswing
* Long-run/business-as-usual

Let’s jump into Part 2, and look at the transition/mitigation phase of the coronavirus crisis.

Through April 2020, a special PRO Expert Survival Pack is available to procurement practitioners only* at up to 50% off — Learn more