Fieldglass and Contingent Labor/Services Procurement: Looking Up in 2008
Now, I'll be the first to admit that services procurement is not a grouping of categories that I'm an expert in. But I'm a fast learner when I'm interested in a topic, and this is clearly an area that I should know more about. Without question, Fieldglass -- along with Chicago neighbor Click/ITW and IQNavigator -- is one of the clear leaders in the space. So who better to kick-off my 2008 contingent labor/services procurement education? In my recent meeting with Fieldglass, a few members of the team had the chance to tell me not only where their own solutions are headed this year, but also some of the broader market trends as well. I'll leave the specifics on Fieldglass solution focus and growth for another post in the coming weeks, but today I'll offer up a quick market backdrop based on our conversation.
To begin, when Fieldglass first entered the market some eight years ago, they saw the contingent labor segment of the services procurement market as an untapped opportunity -- but one that procurement would be the primary driver of inside the typical organizations. However, over time, it's become clear the procurement is not the only key buyer of this type of solution. Rather, HR -- and the MSPs (managed services providers) who Fieldglass is allied with -- are the most likely to articulate and realize the value that such a solution can bring to a company (and their clients, in the case of MSPs).
In part, this has happened because the emphasis has evolved away from just better contingency labor sourcing and requisitioning to the broader concept of managing such relationships throughout a relationship or engagement life cycle. Addressing this broader concept and closing the entire contingent labor and services process loop not only can directly reduce costs -- which typically are not the primary driver of investment decisions -- but can improve the overall level of results an organization achieves from outside services providers. At the same time, organizations realize internal efficiency and productivity gains from automating the contingent labor and services life cycle while at the same time vastly improving and closing the compliance loop.
Today, the value proposition for this market segment is evolving once again. It's shifting away from life cycle management, moving instead to the broader nexus of talent and the enterprise. In other words, what is the best way to procure and oversee talent based on the need to obtain a certain objective? Rather than just manage the tactical side of sourcing, requisitioning, administration and management process, solutions like Fieldglass are becoming more strategic as interest in the overall concept of talent management grows. Should I consider internal resources for a project? Or is a certain assignment better suited to contract resources on a time and materials basis? Or should we look to lock-in and manage consultants or contractors around a project-based approach? Answering and solving these broader questions is the future of the contingent labor and services procurement marketplace.
- Jason Busch
Human capital management is a terribly difficult challenge to any one in strategic sourcing. The services range from temp labor to consulting, research to outsourcing, application development to security services. The truth is that any application has to offer a very, very wide range of payment tools: hourly, unit pricing, fixed fee, expenses, volume discounts, fast pay discounts, etc.
More importantly, sourcing teams need to consider whether it makes sense to procure different categories of spend using different systems. That decision may be more political in nature, with HR and IT possibly driving the decision - and even possibly owning the category strategy. Given the complexity of certain projects which require goods and services and the need to apply financial capitalization rules and other levels of detail to services and goods, sometimes it just wont make sense to stray from Ariba.
However, Fieldglass is an absolutely wonderful solution for those whose challenge is chasing the best source of human capital and managing the results. Especially if you're free from the constraints of your financial systems' controls and your eProcurement solution is focused on direct procurement, catalog goods, etc.
Those who do a ROI may find managing two applications a bit hard to swallow, but that assumes you can successfully implement services in one of the gargantuan enterprise-class packages, like Ariba, which is neither easy nor inexpensive.
The one word of advice I would give everyone: include your customers in the selection process and make the strategic issues part of the conversation.
Tony
http://360vendormanagement.com/