Summer has arrived, and that means conference season is about to kick off with VMSA West, CWS Summit, and ProcureCon Contingent Staffing just around the corner. VMSA West, beginning on August 14, has become one of the largest annual events for professionals in the contingent workforce space. This year’s theme encourages participants to “look beyond the horizon.” Really, though, that sentiment seems more like a call to action, an urging to evolve, and perhaps even a subtle warning that things have changed dramatically in the industry. Whether staffing providers and MSPs have embraced those shifts is somewhat immaterial; the workforce and the clients have, so we must adapt. The best way to illustrate what that means is to look closely at the talent marketplace offerings being pioneered by Coupa and Beeline.
What’s He Building in There?
Beeline and Coupa Usher in a New Era of Workforce Procurement
“What’s He Building?” is the title of a 1999 song by Tom Waits. It’s weird and paranoid and comical at the same time—a suburban horror story delivered in the meter of Dr. Seuss. Rolling Stone described the piece as a “dramatic monologue from a nosy neighbor set to a palette of eerie sound effects – subdued metallic clangs, low-rent electronic flutters.” After each observation of the neighbor’s suspicious behavior, the narrator returns his attention to the uncomfortable mystery surrounding a device being constructed in his neighbor’s garage around 3:00 a.m. Every line ends with the narrator, increasingly agitated, intoning, “What’s he building in there?”
The creeping sense of dread and derangement comes from the madness that unsettles people when convention has been disrupted. For those who find comfort in environments that emphasize routine, unflappable rules, and the safe familiarity of the status quo, introducing an agent of unknown intent or nonconformity can produce feelings of profound distress. It’s no different in business industries as in pristine suburbs. Secretive actions breed disquiet. So when Beeline and Coupa began hinting at their development of technology platforms for talent marketplaces, people naturally wondered, “What are they building in there?”
In a June 3 article for Spend Matters, Nick Heinzmann and Andrew Karpie shed some light on what’s going on in those garages as they unveiled the new iteration of VMS platforms launched by Beeline and Coupa. Of Beeline, the authors wrote:
At the end of 2016, Beeline shrank the total pool of available vendors when it merged with IQNavigator, creating the largest independent, pure play contingent workforce and services procurement technology provider by a significant margin. The two VMS solutions — now a single entity under the Beeline brand — are being converged and replatformed into a unified offering (BeelineOne) while developing innovative approaches to external workforce sourcing and management requirements.
Two years after Beeline’s acquisition of IQN, however, a new competitive threat emerged from Coupa:
This of course was Coupa’s acquisition of DCR Workforce, which catapulted the source-to-pay suite provider (and arch competitor with SAP Ariba) into the top tiers of contingent workforce and services procurement technology capability. Coupa has branded the current and eventually integrated and replatformed capabilities as Coupa Contingent Workforce (CCW). While Coupa previously did provide baseline support for contracted-SOW services through its Services Maestro module, the acquisition allows Coupa to expand its offering and provide the same range and types of capabilities that would generally be found in leading VMS solutions.
But Beeline and Coupa haven’t just expanded the scale of a vendor management system (VMS) or merely enhanced core features and functionality. They’ve changed the scope. And the audience.
This Isn’t Your Parents’ VMS
Beeline and Coupa have reimagined the idea of a VMS as a tool used primarily by a managed services provider (MSP) to distribute requisitions and report on performance for enterprise programs. In some fashion, they’ve taken the technology back to its roots: the management of staffing suppliers for the comprehensive procurement of contingent talent. The difference is that the buyers of non-traditional employees, regardless of company size or spend, now have access to a VMS platform. Not only that, but one that fuels a connected ecosystem where candidates (contractors, freelancers, temps, et al.) can be sourced directly from suppliers in a community.
Coupa and Beeline have emerged as the premier networks for direct sourcing. Beeline’s Self-Sourcing platform, as the company explains, empowers clients to find and engage contract talent, not through traditional MSPs or staffing suppliers managed under an in-house program office, “but through direct access from your Vendor Management System (VMS) to internal and external talent pools.”
Coupa’s system is similar. Coupa delivers an organic suite of pure cloud applications to handle accounts payable, procurement, expense management, sourcing and inventory, and now workforce procurement and spend management. Clients in need of workers can send out job orders and select candidates from any of the suppliers in the Coupa Advantage network. These staffing agencies have been vetted with pre-negotiated markups to ensure procurement savings without sacrificing quality.
If you haven’t yet grasped the real story here, it’s that both companies may have finally solved the riddle of how to bring VMS to small- and mid-market customers. And that’s exciting stuff.
VMS for All?
In 2016, Allegis Global Solutions (AGS) announced the launch of its SIGMA MSP offering. The program came in response to the untapped potential of small- and mid-market companies that spend between $5 million and $50 million on contingent talent. Smaller businesses then and now play a much bigger part in the economy. The staffing industry understands this, but has not quite mastered a solution that can succeed in capturing a significant portion of the revenues that await. In a lot of ways, smaller clients still feel that MSPs are too large for their needs—that their offerings remain better suited to the realm of hefty enterprise spend. These customers would also love to move past manual processes, but they don’t believe they can afford a VMS.
The talent marketplace and direct sourcing platforms designed by Beeline and Coupa could be the answer. Non-enterprise businesses don’t require a specific threshold of spend to participate. They don’t need to purchase a VMS. They can also forgo the operational burdens of selecting, enrolling, and then managing a supply base internally. In these one-stop digital talent exchanges, customers can access solutions for their contingent hiring needs, while receiving the full spectrum of advantages that VMS automation delivers:
- Background screening
- Drug testing
- Talent pool-based sourcing
- Program analytics and business intelligence
- Visibility into rates, spend, attendance, and performance
- Independent contractor compliance, administration, and payrolling
- Electronic billing and invoicing
- Communications, notifications, negotiations
- Assignment, tenure, and breaks-in-service tracking
- Complete onboarding and offboarding
The nature of “community” in these ecosystems extends beyond the wide variety in supplier selection. Beeline and Coupa both leverage network partners who provide complementary solutions. Through these community members, contingent workforce customers receive support for nearly all aspects of program management, such as compliance and certification, electronic payments, background and drug screening services, risk mitigation, video interviewing, digital messaging, automated communications, and much more.
As Beeline describes, its direct-sourcing talent marketplace involves a uniquely proactive approach “because we continuously search for and engage with skilled professionals who are good matches for your organization; long before a contract job opportunity is ever opened.” Coupa promotes a remarkably similar practice.
The Past Challenges of Enterprise Programs Remain Fresh to Smaller Clients
Enterprise clients have long recognized and reaped the benefits of MSP/VMS programs. Back in 2007, the Human Capital Institute issued a substantive and groundbreaking report (“MSP Standards Board”) on the outsourcing of contingent workforce management to an MSP/VMS provider. To most of us in the industry, the pain points aren’t just obvious, they’ve largely been overcome.
- Visibility into worker locations, assignments, rates, and program spend
- Process optimization and centralized administration
- Cost containment through automation, streamlined distribution and approvals processes, consolidated billing and invoicing, etc.
- Mitigated co-employment risk and increased compliance
- Quality improvements and sourcing enhancements
- Reduced cycle times
- Labor forecasting and trending
- Robust reporting for metrics, program analytics, service level agreements (SLAs), key performance indicators (KPIs), and the identification of renegade spend
What’s utterly fascinating, however, is how all these problems continue to plague small- and mid-market customers. The issues may appear archaic to industry veterans, but the aches endure for non-enterprise clients. Why? Because they haven’t really experienced the opportunity to access MSP/VMS solutions in the same way. One of our team members became acutely aware of this while attending a contingent workforce breakout session during last week’s Coupa Inspire’19 conference.
Every attendee at the strategy meeting classified as a small or mid-sized business, with no more than 8 to 10 suppliers. Their sore spots, all universally shared, came in surprising echoes of the past:
- No real visibility into spend or individual contractors on assignment
- Manual processes for time keeping, payrolling, and administration via spreadsheets
- Where automation exists, the systems are disparate and onerous: CRMs, ERPs, procurement platforms like Ariba, third-party payrolling, etc.
- No automated or transparent methods for approvals, expenses, or assignment tracking; email seemed to be the common vehicle
- Expensive manual invoicing and various payment methods
- Inability to track and report on deliverables, performance, or KPIs
- Long lead times
- Misclassification concerns, co-employment risks, inefficient onboarding, billing errors, and compliance nightmares
The good news is that these companies may finally have a chance to achieve the level of program efficiency that larger firms have realized for years. For staffing suppliers, the boons are equally huge. They have the ability to be more competitive, attain higher margins, reach more customers, and expand their presence across markets—all while continuing to have access to leading-edge VMS platforms through Beeline and Coupa.
The World of 2020 May Look Very Different in Staffing
The topics showcased in the VMSA West agenda underscore the momentum that new sourcing models have gained. You’ll see intriguing sessions about emerging solutions like talent pools, supplier exchanges, and the “consumerization of procurement,” where buyers have direct access to a marketplace place of candidates while still maintaining a program office. These platform-driven ecosystems will likely represent the future of hiring. And based on the tools that Beeline and Coupa are rolling out, the future could be closer than we thought.