The Role of Technology in the Evolution of Services Procurement
Exploring how and where technology in enabling the adoption of different resource models.
With Andrew Karpie, Contingent Workforce Industry Analyst & Consultant
00:00:00 - Consulting on workforce technology and experiences in contingent workforce analysis
00:08:30 - Services procurement's emergence in the workforce mix
00:19:40 - The intersection of contingent workforce and SoW
00:32:00 - Constraints, control and addressing output-based work
00:40:50 - The services procurement tech landscape
00:50:40 - Management of the SoW lifecycle through solution integration
01:00:30 - Inflection points pushing organisations to address SoW
Episode Highlights
Transcript
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Jonny Dunning: 0:01 Great, so we can get started. Okay, so I’m very pleased to welcome today, Andrew Karpie. Really pleased to have you joining me on the podcast today. How are you?
Andrew Karpie: 0:13 Hey, I’m doing great. And it’s really great to be here today, Jonny.
Jonny Dunning: 0:18 Excellent stuff. We’ve had many interesting conversations in the past. And bearing in mind your amazing wealth of experience and insight into the market. I’m really looking forward to picking your brains on some of these topics. With the key topic, kind of that we’re centralizing our conversation around being the role of technology in the evolution of services, procurement, right. But obviously, this is going to touch on some other areas where we’ve seen technology have a big effect as well. And so just to kind of get us started. How’s independent consultancy life treating?
Andrew Karpie: 0:53 Yeah, I mean, it’s everything that it’s made out to be. And it’s something that I’ve done before, I’ve kind of flipped back and forth between employment and independent consultancy. So I guess I’m part of the, you know, the flexible workforce, agile workforce economy. And, yeah, I finding it very gratifying, and offers a lot of freedom. And it allows me to get into a whole broad range of different subjects. So it’s been gratifying. Most definitely.
Jonny Dunning: 1:37 Yeah, I think it’s really interesting how your experience has been kind of layered on itself by the different roles that you’ve had. So obviously, you’ve got a background, would you say kind of primarily, like Product Management?
Andrew Karpie: 1:52 Yeah, I would say it’s, my background was definitely in analytical and financial and senior product strategy and management roles in various domains and verticals. So, I think it’s a bit more eclectic, but probably, the preponderance of my background before getting involved in as a research analyst, in the contingent workforce area, services procurement area, was in product management, product strategy, product management.
Jonny Dunning: 2:24 So, then you obviously had a fairly long period of time when this analytical side of it and the market analysis really became a big part of what you’re doing, both working with staffing industry analysts, and also more recently with the team at spend matters. I mean, that’s just such a huge window onto the market, isn’t it really, in both cases?
Andrew Karpie: 2:46 Yeah, definitely. I think it at staffing industry analysts, I was able to, get a broad overview and really understand what was going on in the whole staffing and contingent workforce management industry. And it was an opportunity for me to really drill into technology. In that industry. I started the research direction, focusing on platforms and online marketplaces at SIA. So that was, a great kind of introduction into the industry, and really an opportunity to very rapidly understand what was going on there, ad spend matters, my focus shifted more to kind of the procurement perspective on a contingent workforce, and in services, procurement. And that was really where I really where I got involved in or became focused on procurement of services, not simply the contingent workforce management side of things. So, I credit my time there to having the opportunity to really dig into services versus contingent workforce.
Jonny Dunning: 4:19 Yeah, and it’s really interesting as a technology provider. For me, working on that side of the fence, it’s always been really interesting to see some of your articles and have conversations with you and look at your analysis, where there’s been various occasions when I’ve been getting really excited about something. And you’ve kind of said, Johnny, let me direct you to an article that I wrote kind of four years ago, where I read it because you get these kind of you get these kind of false dawns, don’t you where people are getting really excited about something and talking about it, and saying, this is going to be a big change, and this is all going to happen, and then kind of like it does like three or four years later, and then That’s been true of various different things. And I know certainly with things like the gig economy and the growth of the gig economy, there were a lot of naysayers. Initially, this will never take off, or it kind of, the start is always slow until something builds up momentum, and then it becomes more kind of geometric type expansion. Obviously, if you get something like COVID come along, that’s sort of things are just global game changes anyway. And you can push things in various different directions. But I’ve always found that really interesting. And you’ve time and again, you’ve been plugged into stuff pretty early. And because you’re dealing with the early adopters, right up to the giant enterprise that are maybe a little bit later to the party, but also with the staffing organizations, and who I actually believe are very innovative, in some ways in the way that they do things, because I think they’re adaptable organizations. And they’re problem solvers. So in my experience, I’ve seen the staffing industry be shot down multiple side by people saying, “Oh, this is the end of the staffing industry.” And what actually happens is the staffing industry adapts more rapidly, particularly to things like technology, like from back in my job or days, I remember seeing that back in like 2000 Oh, it’s the end of the recruitment agency. They adapted beautifully. They basically reduced their advertising costs by a factor of 10. And just really ended up kind of dominating that job board world. But you’ve seen that in across multiple different categories when we look at the whole staffing spectrum.
Andrew Karpie: 6:36 Sure. Yeah. I mean, I think the past 10 years have definitely been a time of proliferation of different approaches and technology based approaches to sourcing and engagement. And, I think that, when I say proliferation, I really mean it in terms of kind of an explosion of different types of sourcing and engagement types of solutions.
Jonny Dunning: 7:14 So if we look at services, procurement, specifically, not wanting to get too deep into definitions, I’m sure in your time at spend matters and staffing journalists, you’ve spent plenty of time in this area. But in the context of this conversation, I’m describing services procurement as not including contingent workforce. Firstly, what’s your view on that definition?
Andrew Karpie: 7:42 Yeah, I mean, I think the procurement of services, sometimes referred to as SoW in contingent Workforce Management Program contexts. Yeah, I mean, definitely. It’s the difference between, although there is a little bit of overlap, it’s the difference between engaging in deploying specific individuals versus individual workers versus contracting for particular outputs with a third party. And so I definitely think that’s the basic difference.
Jonny Dunning: 8:27 So, I agree, I think there are some gray areas emerging, which probably, kind of already there, but are being highlighted as more people look to address this area and try and kind of work it out and line it up and tidy it all up and put it into the right boxes. And so, if we talk about the procurement of services, as basically the procurement of a service from an organization that is going to deliver an output engaged under a statement of work contract, and this is, you get some people who will readily reuse the term, SoW and get other people in the services procurement entity who really don’t like that phrase, because ultimately, it’s just the contract. I do think it’s a great central point to come back to, because you get this kind of black and white scenario where you say, if it’s contracted under a statement of work, it fits in that box. And if it doesn’t, it’s quite possibly something else. So there’s a value to that, but on the basis of the services, procurement, and there’s a different set of problems or there is a specific set of problems that organizations have in addressing that. You obviously will have heard a lot of this from end customers from the research side of it, and also looking at the solutions that technology providers are trying to put forward. What do you see is that those main problems being for organizations?
Andrew Karpie: 9:52 Yeah, I mean, from what I have seen, and you’re referring to specifically procuring services Correct. So I mean, based on some data that I’ve seen, from my discussions. Interestingly, the problems are very basic. Those that seem to rise to the top are first of all visibility into services. So, there isn’t really an organizations are not very good at understanding, where services spend is happening, first of all, and being able to analyze it, getting visibility is generally the top problem that they cite, in terms of challenge for getting some handle on services?
Jonny Dunning: 10:56 I mean, the thing is, it’s, in some ways, the problems are basic. But the area that those problems are part of is incredibly complex. It’s like, if you look at the difference between buying goods, materials. And, I’ve certainly taken a real interest in this from a technology point of view, and from a process point of view, because our technology specifically focuses on just the procurement of service versus not rather than the procurement of materials. If you look at this wise, I would always espouse the fact that there’s different technology required for the different things because if you’re buying goods or materials, it’s fairly binary in some ways, in a sense, you’re buying a certain number of things, the things have to be the thing that specified, they need to be the right quality, delivered on time and all that sort of thing. However, there is complexity in the supply chain, significant complexity in the supply chain. And that’s where existing procurement technology is, in my opinion, pretty good at managing that, when you’re dealing with buying services, in most cases, is less complex. Less of that supply chain complexity. But there’s a giant amount of complexity that’s very fluid in the sense that of what it could be, what’s being delivered, every single project theoretically, is different in some way. Obviously, he gets repeatable stuff that’s at the bottom end of the tailspin, but generally, there’s just this giant scope. So although the problems are things like visibility, compliance, control, and all these sorts of things, are fairly basic problems. They’re just so complex, because service is complex. Would you agree with that?
Andrew Karpie: 12:40 Yeah, I mean, I think on the one hand, the fact that, these very fundamental problems, are those that rise to the top, indicates how much there is to be done. Beyond just getting some handle on those. But absolutely, I think that services are something that is to some degree intangible, as you say, it’s all about the contract really, in the specifications, and being able to determine and in control and ensure that the outputs or the results are being delivered. I think that’s services in a nutshell, services procurement in a nutshell.
Jonny Dunning: 13:38 I totally agree. And so in the same way as the fact that the problems are, in some ways, basic fundamental, I think the solutions need to be as well, in the sense of you are addressing those basic problems. But it’s like, I just made a note then that you referred to the intangibles. And I think really the problem solving exercise in addressing services procurement is trying to make those intangibles, tangible and measurable. And trying to be able to deal with the nuance and complexity of all these different services that can be provided by different provider types. I agree. But that’s where I think the statement of work is hugely important, because it all comes back to that. And, ultimately, I think at the moment, my opinion in terms of the maturation of this on the market maturity as it currently stands. A lot of companies really have no handle on this whatsoever. And some companies are quite doing okay, at managing a kind of source to contract process. But very few companies that we see are able to manage the kind of full source to pay process effectively. Stuff seems to get lost at the point of contract. And that’s I think, where from a technology point of view the problem solving exercise needs to address specific issues around. There’s complexity and nuance and a huge variation. But ultimately it comes back to. Can you define effectively what needs to be delivered? Can you capture that? And then you need to make sure that goes through to the delivery phase. And in a lot of cases, we hear anecdotal stories from CPOs, CFOs, etc, where, we’re looking at doing some work with provider X, and what did they do for us in the last year, and no one really knows, the CPI might well will almost definitely know how much you spent with them in total, but they won’t necessarily know what the projects were, whether they’re on time on budget, how much scope creep always sort of stuff. So I think, in a situation where some procurement teams are having to actually literally look at physical statements of work or dig them out to try and understand this information, is a fairly simple problem solving exercise of taking that information in through into delivery. And it’s a specific problem that’s kind of being addressed now. So we’ll come on to how that’s being addressed in a minute. But I think there’s also the idea that, generally, if you’re buying goods materials, I’m sure there’s some instances where this is the case, but not there aren’t usually changes partway through. So if I order a 50, red widgets, it’s unlikely that I’m going to order something complete, change that to something completely different halfway through the order,
Andrew Karpie: 16:30 There might be changes in quantities or price or something like that. But yeah, absolutely.
Jonny Dunning: 16:35 Yeah, I think one of the problems that would be interesting, your opinion on this, one of the unique problems around or the specific problems around the way that services are procured is that change process is a huge part of it. And because of the time when you try to do something, you don’t know where it’s going to end up. But is that something you see?
Andrew Karpie: 16:56 Definitely. And I think to your point, the kind of the source to contract process is something that probably gets a lot of focus. And although even that, as you mentioned, is not being done that very well. But in many organizations, but the post contract delivery and contract pay, that is just, there’s not very much. I think that’s where there’s a tremendous deficit in practices today. And, interestingly, as you were talking, I was thinking about, well, for procurement, which generally is handling and trying to manage services, if at all. And, I think that procurement is not geared to being able to track and manage posts contract. It’s not what they do they buy. And, sure they’re interested in the results of what is bought. But, they’re not, it’s procurement is not geared to manage the engagement in the deliverables of services engagement.
Jonny Dunning: 18:26 That’s a really interesting point. Because the CFO certainly very interested, because they’d like to know what they’re getting for their money. And the CEO may well be very interested. And it’s a question of where does that responsibility lie. But I see this as a massive opportunity for procurement. And so if procurement can effectively use systems, to understand that information to hold that data, that makes their input to the board enormously valuable. And when you look at that kind of that delivery phase of the lifecycle, that’s where the really cool stuff happens. That’s where you capture all the data. Because what you’re saying is has what’s been delivered? Is it consistent with what was contracted? If not, what were the chain? What was different? Did it take longer? Did it cost more? Did it didn’t go well. But if you capture that information, which is, it’s a process, it’s a workflow, it’s not on the surface, it’s not hugely, exciting, but the insights gained from that really are and that is where I see the future of the kind of technological support of the procurement of services is all around understanding, gaining those insights and understanding them and using to make them, to make better buying decisions because, how big is the procurement of services? I always kind of say around a trillion dollars because I can’t remember where there is, I think it was an SI a figure that kind of put it around that. But I’ve seen some research from some of the big global solution providers who put in more like 20 trillion. But I think, once you get over a trillion, that’s kind of big enough. But this is a huge area of spend to get under control. And it also feeds back into the problem. Companies are trying to address around workforce and resourcing as a whole, where they just basically want to know, how should we be getting work done? And what’s the most effective use of our resources? And, this is where it’s all coming into the workforce solutions world where it’s being seen more as a delivery channel, rather than something that just sort of sits over there and is too complicated for anyone to look at.
Andrew Karpie: 20:38 Right, Well, I mean, I think this gets us back to, I don’t know, kind of a Pet question of mine is, what is the proper intersection of services, procurement and contingent workforce management programs? And because, you talk about, for example, the SI a trillion-dollar number. They’re very specific that this is SoW, type of services. So, clearly, as you’ve noted, the whole universe of services is, is considerably larger than that. And so, I think the big question that that is not getting answered is and should be posed and answered is, what is that intersection point? For example, should contingent workforce management programs be looking to manage major outsourcing agreements, and contracts? Now, it turns out that apparently, some are doing that, I’ve talked to BMS providers and MSP providers and some companies are using those tools and capabilities to manage something like that. But, I think that the question is that really the sweet spot? Or is it more professional services types of services, that could potentially be substitutes for contingent workforce types of engagements? And personally, I think that’s where services procurement within contingent workforce management, could have the greatest impact, if I think if that were clarified, and further defined. And I think that contingent workforce management programs would, would have much more success in being able to expand their footprints in services. And I think there’s a real opportunity there for you to carve out an area of services and actually show what can be done there, and how it can be done.
Jonny Dunning: 23:18 But that’s such an interesting point. I think, this is a debate in itself. I mean, if you look at that kind of intersection, so that raises a few points in my mind. The first of which is there’s a whole question around who’s responsible within an organization? So right, is it a procurement responsible for the procurement of services, and somehow talent and HR responsible contingent workforce? It depends on the organization as a lot cases, doesn’t it? But, I had a really interesting conversation with a Bruce Morton, from an ages. A while back, and he was talking about this concept of like, work design architects, or like, you know, this kind of central function of working out how work should be done and packaged up and, and how it should be delivered. There’s all sorts of questions about who owns what, how do they come together, and workforce solutions providers are bashing their heads against that? And so they’re coming into it and their traditional stakeholders are over here. And then maybe suddenly, there’s new stakeholders over there that maybe don’t have the level of trust and experience with them. So a bit more concerned about, passing stuff over. And they’ve got these internal communication problems to deal with as well. So I feel like at the moment, there are constraints around the way that the juxtaposition of contingent versus services procurement currently sits in the sense that I feel like at this point of maturity in the market, it’d be quite hard for Workforce Solutions providers to dictate, that, to a certain extent, they’re going to be late by the client. But in terms of what portion of that services spend, they’d like they should be addressing. I mean, that, again, is a really interesting area, because it’s going to be heavily dependent on the client at the moment, I still feel like that’s client driven. There’s not a blueprint. And this is where we come to the fact that service procurement has been around, it’s been around for a long time. But in terms of the management of the procurement of services, I feel like it’s quite immature, globally. Because, in some cases, people are going to say, I just want to address Tailspin to start with, or I just want to address spend up to a certain threshold where it needs to be automated, and actually my top level consultancy stuff that doesn’t even touch procurement. Anyway, the SES, we deal with that. So we can’t bring that into it. Whereas some organizations, you may be having a bit more of a mandate culture internally, and maybe a bit more of a structured approach to buying those big consultancy type services might just say, I don’t care, it’s everything, and everybody’s gonna like it or lump it, because I need to, I want to increase supply chain diversity or want to work with smaller suppliers, where it’s giving me better results. I was just talking about the kind of the gradation. And, some companies are just saying we’re going to address the whole lot regardless. And other organizations are looking to start in different places. But I still don’t feel that, that’s something that the markets mature enough for Workforce Solutions, providers just be able to say, that’s the way we do it. Here you go. Here’s the blueprint, some of them are working towards that.
Andrew Karpie: 26:35 Right, no, I agree. And I think from what I’m seeing, many of the workforce solution providers, they’re approaching services and, and thinking about it as providing a solution for procurement. And, I think that has to be thought about. But the procurement perspective is extremely broad, and its view of services is broad and complex. And I think therefore, it’s kind of a boiling the ocean type of exercise. And, that’s why I think it would be very important for these providers to kind of narrow the range and scope of what they are trying to deliver to their customers. And, once again, looking at the customers, and what are the issues, customers want to get work done, as you said. They can use contingent workforce, or they can contract for professional services, in effect, to get projects done, as a SoW types of projects done. And it does broaden the scope. You know, it’s no longer an individual getting slotted into an organization. It’s another organization that is delivering an output, but I’m sorry, I need to break there.
Jonny Dunning: 28:22 I was on a roll. But yeah, like you’re saying it’s not paying for individual’s time, it’s engaging a service provider to deliver a contracted outcome. Yeah, I get told off the saying outcome, because ultimately, outcomes are to control outputs.
Andrew Karpie: 28:43 Right. Just to go back there. I mean, if you look at the development of SoW, as such within contingent workforce management. How did that how did that come to be? I mean, basically, it came to be that programs realize that staffing firms were trying to get around the process of control by, produced by, providing and proposing Statement of Work types of projects.
Jonny Dunning: 29:16 Surely, I would never do that.
Andrew Karpie: 29:18 Yeah, right. Exactly. But my point is that there were customer problems that drove the need for solutions. And, whereas I think we’ve come in and that was fairly, that kind of defines a certain space of services spend. And it kind of defines, if you look at it starts to define the problem on a smaller scale, and a more doable scale. And I think that what we’re seeing now is particularly with some of the contingent workforce solution providers is, they’ve I think they’ve kind of lost sight of that. And, they’re trying to solve or, propose solutions for a much broader problem. And, I think that is problematic for them. And it’s also problematic in terms of just, pursuing and developing solutions that that can add value progressively and can be manageable.
Jonny Dunning: 30:34 Yeah, your comment about boiling the ocean, I think is a very valid one, I think there are. So I agree that the, the majority of the large workforce solutions providers, the global players are already having solutions. But they are definitely going through a phase of rapidly evolving those solutions, building them out, defining them more effectively. And there are generally within a common theme is that there will be different levels of service. And there will be different levels of what’s in scope. And that might be on trend categories, and all that sort of thing as well. So I feel like, what you’re saying kind of ties in with my thoughts around what the constraints are? Because I don’t feel this is something that I mean, it’s going to be probably a bit of a seesaw process where the workforce solution providers say, we think we should the solutions should be these things. And then the clients on the other side, saying, well, actually, right now, our burning issue is this and this, and this, and this is what we’re going to let you look at, we’re not going to let you look at this, and it’s going to kind of like knock back and forward and get to at some stage down the line, obviously a point of maturity, like the contingent workforces on that side. So but I feel that there are two areas of constraints or two areas of potential constraints. One of them is a customer, the customer constraint. And I do personally feel that there are also some technical constraints around the use of more traditional systems or systems that have come from a contingent workforce background, because I think that naturally, there’s going to be different areas of priority. But just in terms of what you were saying, is that how it’s come to be addressed by workforce solutions providers, part of it is due to misclassified spend. And naughty business going on in the background where and companies are just as much guilty of this as well, where people are trying to get around headcount freezes, that they’re engaging, they do everybody shopping under SoW, and this is one of the things that companies want to get control of. And the reason why they want to get control of it is because it’s rogue spend, and it’s a significant compliance risk in places like, Germany, we’ve got the AUG regulations, the UK, we’ve got the R 35, regulations, 1099 versus WTO, in the US, etc. And there are a lots more regulations coming out from what I hear in other European countries and other countries looking to address this misclassified employee spend or conduct employment. So, it’s come to the industry, because problems have arisen. And part of it is because of this kind of rogue spend, but also part of it, in my opinion, is because there’s been a reduction in the distance between what the procurement of services under a statement of work are, what is and what contingent workforce engagement is. And I feel like weirdly, part of that has actually come from the gig economy approach of this task output based insurance ability. And I think it’s a really interesting area because when you were talking earlier about organizations and Workforce Solutions, providers trying to line up this contingent versus output based opportunity of how they get the work done. That’s very much more how the world has changed. I think COVID has kind of pushed that as well as has things like talent shortages. So in the UK, things like Brexit, for example, have created significant additional talent shortages on top of what those that were already were, and therefore that has increased the amount of outsourcing. So although they’re very different you know, it feels to me like there’s a bit of confluence there as to how these things have kind of merged a bit.
Andrew Karpie: 34:39 Oh, yeah. I mean, I definitely have come to see it as a spectrum. And you’re in the middle you have kind of that independent contractor. That is, may not be a company may just be a solo provider. And, but at the same time, generally they’re technically they should be working under a contract with statement of work. And, I mean, they can be hourly. And that often happens. But, that’s kind of where the, I think, that’s where things start to shift from a contingent worker to a service. And I definitely see it as a spectrum. And, whether that’s really important at this stage of the game or not, I’m not sure. But, I think organizations are beginning to tackle the independent worker, independent contractor type of category. So that seems to be underway. And it’s definitely growing. But I think at the same point, at the same time, I think, services are potentially a much larger opportunity for control and savings.
Jonny Dunning: 36:05 Yeah, and I think I’ll be interested, in your opinion on how kind of how much joined up thinking there is you seen going on within organizations, when it comes to the use of outcome based, deliverables based, workforce delivery? Because I think a lot of cases are very simple level, people just think that getting stuff done under an outcome is expensive. Okay, What’s your view on? Because, so, creating a requirement that delivers an outcome is more complicated than a job spec. And it requires the buying manager within an organization to have a clear, to be able to make a clear definition of what they need to do and why within their part of that organization, and they need to understand really how that’s going to contribute to the overall strategy of the whole organization. So in a super organized scenario, everyone should be able to do that. But in a lot of organizations, I think people struggle. And, do you think that some organizations just automatically think, well, if we outsource that it’s going to be more expensive? And do you think that’s true in reality?
Andrew Karpie: 37:26 Well, I think you were kind of hitting the nail on the head. I think, looking at outcome based contracts, I think that’s something that is generally viewed as desirable, because it promotes more certainty. And also kind of defines the cost and, presumably, ties it to deliverables. But I think what you said about, in effect, the, the cost of the process of doing that is high. And I think, you’re absolutely right, having to create a SoW, for a hiring manager or business manager. That’s definitely a problem. And, how it’s, you know, the whole, also how it should relate to a particular contract? Or, do you need to go out and get a new supplier? I think that is very burdensome, and probably a cost barrier in effect, and a barrier to getting me, getting that done. So, I would definitely agree with that.
Jonny Dunning: 38:39 Yeah, so it can create a barrier, or a perceived barrier to moving something from one workforce delivery model to another. So say, for example, saying, we’re not going to get that done with contractors or permanent hires, we’re going to outsource that could be seen as a barrier, where, it’s just quite simply the people within the organization sitting there thinking, well, how the hell are we going to define that? We just need the developers to sit there and crank away on it. Whereas actually, in the grand scheme of things, if they could define it, it might be a more efficient way of doing it. But it doesn’t suit every task. So I think there’s a level of maturity, that where within organizations where they’ll get to the point where it’s much easier to decide whether it should be done this way or that way. And I think there’s a big opportunity for the workforce solutions providers to help with that. And, it is more difficult it is there is a level of complexity to writing a good requirement or statement scope of work, whatever it might be. Having said that, there’s a whole massive amount of this that’s already happening. Yeah, and actually, there’s an opportunity to address the stuff that’s already being done, but either not being done very well or just not really being tracked. So, I always feel with services, procurement that whatever the issues around it, there’s so much that needs sorting out that it’s such a worthwhile problem to solve. Because even if, as you said, with the Workforce Solutions providers, instead of boiling the ocean, if they take a specific part of it, or an entry point, they may be very naturally sits alongside and complements what they’re doing on the contingent workforce side, there’s a giant problem to be solved.
Andrew Karpie: 40:21 Absolutely. That’s my view entirely. Right. And, maybe it starts with, I mean, everyone has been talking about multi-channel sourcing, and so forth. And some providers have been, attempting to enable that. But, maybe it starts with, the, the killer app to create SoW for certain category of services. So, managers, business managers that are looking to get something done. And, they would typically log into their BMS, in the traditional world. They’re able to have options, and one of those options is to use to pursue a service. And being able to, you know, the killer app would be, you know, really helping, and enabling the creation of that SoW. To start with. And so, I know fairly solutions that are out there that are working on that. And at the same time, even that, I think is kind of a complex thing, because it’s not just the creation of a SoW in isolation. It’s the creation of SoW in the context of contracting, and legal contracting. And so, I think that’s kind of a missing link here. In the solutions, tying that more so into the contracting process, and the overall supplier management process.
Jonny Dunning: 42:15 Yeah, and my personal view of the services procurement tech landscape is that the will need to be, different providers are going to need to address these specific problems, because the problems are big enough and complex enough that they really, it’s going to be very difficult for someone to just waltz in there and solve all of them in one go. And so, you’ve talked about the kind of creation of a scope of work, or that that origination of what then becomes the statement of work. If you look at the procurement of services solutions, how do you see the technology landscape sitting today? And how do you expect that to evolve over the coming years?
Andrew Karpie: 43:08 Yeah, Well, I mean, as we’ve been discussing services, not something new, even if it appears to be relatively new within contingent workforce management programs. So organizations have been buying services and trying to manage them and control them. And most of that has been going on through, kind of conventional systems of the enterprise. The financial ERP, the US, certainly, to some extent, going through E procurement, in some cases, Contract Lifecycle Management. So, there is a kind of patchwork of technology capabilities that are being used to support the procurement of services. And, that’s definitely out there. And, then beyond that, there are kind of the solutions that are more specialized, certainly, the BMS SoW modules and which grew up out of, as we were saying before, a particular set of needs. And, then there are some specialist solutions, such as video and a number of others out there, there are some CLM solutions and supplier governance solutions that also specialize in services. But you know, so I think those are the basic categories of water out there. And it’s a relatively small population of solutions. If you compare it to something like talent acquisition or something like that? Oh, yeah. So it’s definitely very early days. And in terms of where that’s going, I mean, I think we kind of circle back to the beginning of the conversation. It’s gonna depend upon how organizations, kind of decide to address some of the services procurement gaps. And then it’s a question of, what is the best solution that are set of tools that we can use to, you know, to accomplish our end.
Jonny Dunning: 45:46 When you talk about organizations kind of be more of a blueprint, or a more of a clear way that people look to address this, as the market addresses the problem and says, that’s too difficult. This is the most important bit, and we’re going to add that on to it. And actually, this sits here, and that becomes more consistent. Where do you think that best practice is going to come from? Because that’s an area that I think is quite fascinating? Could because is that going to be driven by companies? Are they going to, they’re going to talk to each other and procurement people work together and formalize this best practice? Or is that going to come from these workforce solutions providers, who are basically sitting in the middle and having to solve the problem for multiple different end customers?
Andrew Karpie: 46:29 Yeah. And I think it’s definitely a combination of both. And that’s also, within the organization, there are multiple parties, as you’ve indicated, and I think that’s what makes it so complicated and difficult. But, I think, first of all, I would go back to the question of scope. I think it’s very important to scope the problem that’s going to be addressed. And I think organizations themselves struggle with that. And they are, you know, they struggle with where to begin, and they see the whole boiling ocean, and it can be very difficult, and I think that’s where solution providers can definitely play a role in assisting organizations to focus and scope, and accomplish initiatives and, and see results. We’re talking about the landscape, and I was reminded of a solution provider that I follow called conductive. And conductive is largely focused on the management of hospital or healthcare, so called purchase services, which is basically the whole range of services that a healthcare system would procure, but what I find very interesting about their approach is they help the client to zero in through analysis of the span to zero in on specific opportunities. And then establish initiatives to actually tackle them. And there could be multiple ones, they can do one and then do another. But I think this is more of what needs to be, what we need to see, in the general, outside of across different spend categories and in industries.
Jonny Dunning: 48:59 Yeah, it’s fascinating. I love the fact it’s very much data driven. There’s the within, if you look at the procurement of services, in general, there’s just all this data, there’s this amazing information is not being captured, and it’s going to waste currently. And I think, especially when you get things like a pandemic, but it cost pressures on companies, and they suddenly start to look at what they’re spending and go, you ask the question, what are we getting for this money? And we can’t really measure that. Well, there are ways to measure it. You got to do the boring stuff first, and capture the process and define your requirements and do all the sensible things. But if you can, then there’s a whole huge amount of benefits to reread massive savings to be made. What’s the kind of procurement yardstick? If you do a competitive bidding process, you’ll save 20% on not doing a competitive bidding process, right, all these things can kind of feed together.
Andrew Karpie: 49:52 That goes back to what I was saying before, Once again, it’s not the SoW in isolation. It’s the SoW and in relation to contracts. And, every SoW typically unless it’s, a one off and a contract in itself would be associated with the master services agreement of some sort. So there’s that whole contracting relationship, and then the whole supplier management side of things. And, so I think that’s where conductive seems to bring all of that together. So it’d be very interesting to see a solution like that, outside of healthcare.
Jonny Dunning: 50:38 Yeah. I mean, it’s an interesting approach. And I think to a certain extent, it will be driven by the fact that the healthcare industry does things in a very specific way. And obviously, they’re buying lots of different services, but they will operate very specifically. It’s like if you delve into procurement in the way the NHS procure services, for example, in the UK, and the National Health Service, I’ve had some interesting conversations around that. But I think when you break out of that, certainly, from my point of view, the first problem that needs to be solved, is the management and tracking of that entire lifecycle. Yeah, because then that feels to me where it’s like the basic processes just falling down. And, for us, that’s what we’re really focused on just that management of that end lifecycle of any service procured contractor delivered under a statement of work. Because if you can capture that, then you can understand what you’re getting for your money, you can make your buying decisions, you can address supply chain, in terms of diversity, resilience, agility, innovation, etc. And so if you’re trying to solve that problem, that’s a big problem to solve. And it doesn’t necessarily mean you can solve the other problems around, completely automating the way every SoW movement, for example. So thanks for I think there’s room for these specialist providers. Definitely. And it’ll be interesting to see, they’re bound to be certain industries, where it’s very specific, where you get this kind of solution in a bubble, that just encompasses everything that specific industry needs. And in my experience in the kind of workforce tech sector, I’ve seen this growth of generalists, and then the breaking out into the kind of niche specialists seeing that time and time again. But I think when you look at like enterprise technology, a lot of it is about how it knits together. And so it’s interesting to see certainly with the Workforce Solutions, providers as the becoming more sophisticated in their approach to this multi-channel, or, dare I say, total talent kind of approach. And you’re getting things like the concept? Well, it’s a pretty, been around for a while, but the use of things like decision trees, and the use of integrations, I mean, a simple level, sometimes people will approach it, and they’ll say, you’ll have to integrate with this and have to integrate with that. Whereas if you’ve got a piece of a piece of technology that solves a very specific problem, or captures it, then sometimes what you need is single sign on. And you need the right branding and kind of user experience. So people are moving through different screens, they don’t need to know they’re going across different platforms. But they need a consistent experience. And they need the best possible experience for the specific tasks they’re trying to carry out. And that’s very difficult to have all just in one piece of technology. We all know that and appreciate that in our personal technology. But there are certain entry and exit points where data needs to flow. And that’s very important, certainly, for providers like ourselves, whether it’s putting in a purchase order from a source to pay system, whether it’s integrating with an E signature package, whether it’s finance systems, we’re always integrating with finance systems, but also things like data warehousing, and reporting. So there are hugely sophisticated reporting products out there. So if you’re using a system to capture contingent workforce Assist system to monitor what you’re doing with your permanent workforce, and a system to monitor how you’re procuring services. Each one of those three systems doesn’t necessarily need to be the data system of record, it could be the size center, or Power BI or something like that, or a data warehouse is used, where all of that data can just be fed in and then it can be traded separately. I think how the different technologies are kind of knitted together is going to be a crucial part of that evolution.
Andrew Karpie: 54:26 I definitely think that’s key. And, once again, because particularly in the services area, because, it’s tempting to kind of look at it as an isolated problem and solution, but it really is embedded into the enterprise processes and systems and data management and that’s where I think specialists point solutions are important. And crucial, but I also think that how they integrate with, the other solutions are incredibly important. And I think that’s maybe a point to emphasize more for the solution providers and how they do that, and how they can enable it, and what the results of that can be. And, I think there is the role for these specialists, because, going with a VMF, SoW module, for example, there’s a lot of baggage that comes with that. And, the organization that that is using, it is not nest, it offers this, kind of the allure is okay, well, we can source, either contingent workforce, or SoW’s through this platform. But there are constraints that come along with that. And I think the role of these independent solutions that they may fit and address a certain set of problems within the overall requirements set. I think it’s extremely important. And but at the same time, I think the integration part is also very important. And I think it’s important to buyers to see, how a solution like that can just, can kind of kind of fit into the flow and, not result in orphan data and processes and so forth.
Jonny Dunning: 56:55 Yeah, I totally agree. I think, if you can, a very simplistic level, if people aren’t having to sign into multiple systems, and if people aren’t having to, double type information, at the most basic level, those are the problems that have to be solved. And I think, when you look at, there’s no standardization around this. So we get people coming to us with, can you integrate with X, Y, and Zed in this scenario? How would you, fit in with these other systems? And in a lot of cases, now, it’s becoming more standard of what, okay, we that purchase order would come in their invoices would go out through this and easy or whatever it might be. But there are always situations where we’ll ask the question and say, Well, does it make sense to do that? Does it make sense to integrate with that piece of technology? What, the benefit of doing that, but I don’t think that the, market is not at a sufficient level of maturity, where that is clear in all cases. And so this is something that will absolutely evolve over time, and it will be more clear cuts, what’s the kind of standard way to do it. And as you say, these, the procurement of services is very much embedded into all parts of organizations. But the thing that’s quite amazing about it is even in very large and otherwise, very sophisticated organizations, even though it’s embedded, it’s often embedded in almost a manual way. Right, which is quite shocking when you consider how much money is spent in this way, how crucial it is, and how important the understanding of that data is. So there’s so much mileage to go. And there’s so much opportunity for companies to really get this working more effectively for them. And that’s happening at the same time as the fact that due to regulatory changes, and behavioral changes, there is a move towards more of an output based work delivery model, there is an increase in that transition to. So I think that’s why plus things like cost constraints, and the fact that this just hasn’t been dealt with, that’s why this is rising to the top or has risen to the top of people’s priority lists. Whereas I remember reading some of your articles from a good few years ago, when you were talking about services procurement offerings, and you got to say, we’re talking about this, when are people going to get on with it? If you look back at the research that you’ve done on this, and they’re kind of the articles that you’ve read in this area, do you feel that’s really happening now?
Andrew Karpie: 59:28 I think it’s happening more so. But I think the kind of the barriers and the inertia in organizations is enormous. And I think there’s an increasing recognition, but again, because it’s from the organization standpoint, it’s a multi armed Hydra....
Jonny Dunning: 1:00:03 It’s a thorny issue, isn’t it?
Andrew Karpie: 1:00:05 it’s just difficult to kind of get for them to get there, get focused and get grounded in a particular place to attack the problems. That’s where I think the value of the workforce solutions can be in bringing that focus. And, not boiling the ocean, unfortunately, in a lot of cases that’s not what’s happening. So...
Jonny Dunning: 1:00:33 I think the opportunity is there, I’d be interested in any predictions you might have my personal prediction is, this is going to really accelerate second part of next year, I think there are some key drivers that are forcing organizations to address this and to actually hit the go button. Even if it’s in a small white, it’s like, a guy I used to work with always used to give me the example of, there’s always a million things to do. And companies, should they do this, or should they spend the money retire marking their car park? it was a weird example. But in my head. That’s, it’s very true. But this has moved up the priority list, because of things like regulatory changes. Yeah, regulatory change, you’ve got to do something, you have to get your house in order. And also things like COVID, coming along, and just completely changing the landscape. These are real inflection points, a little bit like for the VMAs, and contingent workforce, the 2008, credit crunch and recession, I personally feel that we’ve had some serious inflection points that are making these changes have to happen. And I totally agree with you, in the sense that the Workforce Solutions providers can facilitate this, they can bring the focus, they can bring their problem solving abilities to bear on it. But I also think that people like ourselves, and the tech providers in this area have a responsibility, and an opportunity to support this process as well, in the sense of just making it easier for people. And I think one of the key things for me is, you need to make it easy to get started. And it comes back to your point, don’t boil the ocean, pick a particular area. But within organizations, if they have to suddenly address their entire global services spend, that’s so big and so important, so terrifying and so complex. And if they don’t ever get started, it’s harder and harder. So, I think the Workforce Solutions providers are doing a great job of working with their customers to get in there, find these points where it’s like, okay, that’s big and scary to address, but you’ve got this problem over here, there’s going to be a massive issue for you. And it might only be a small amount of spend, progressively. But if you can sort that out, if you can solve that, then you can scale it up, and you can apply that if you can prove the concept you can apply it.
Andrew Karpie: 1:02:53 Agree 100%. I think that is the value. And, I think the pandemic has been opening, with the talent shortages and so forth, has been opening the window on how to source and so I definitely think that’s been happening. And I think a major, for example, in the UK, it’s IR 35. And I know, that’s a lot of what you’re dealing with, and leveraging to promote and get adoption of your solution. And here again, it’s very, it really does narrow down the field, because we’re, you know, the major problem, there has been is this a worker, or is it a company? And, that spectrum, it’s what is substitutable for a worker, so I think there’s a real center of gravity there that organizations should focus on in which contingent workforce management programs can use to really make a dent in this problem.
Jonny Dunning: 1:04:10 Yeah, ICI 35 as a catalyst, really, and it’s, as you say, it’s a fulcrum. It’s a focus point. But also, when you look at COVID, people just work differently. Now. I am having this conversation over zoom. I was at work today, over zoom. And, people do things differently. And, and companies are much more, it’s easy to forget the huge transition even to just people working more remotely. And so the remote delivery of work, the outsource delivery of work, when people are working remotely, it’s much more difficult to have this kind of presentism or time based attitude. It’s a question of, I don’t mind if you’ve got childcare stuff to do, that’s fine. You sort that out. You’ve got to, walk your dog at a certain time. As long as you get the work done. You’re doing a great job. So, that that, again comes back to this whole point of outcomes, what’s being actually delivered. So I think all of these things really come together to get this very large problem moving in a meaningful way. And I think if you look at the UK, because we’ve had like this triple whammy, COVID, Brexit, leaving the EU, so talent shortages and issues created for that, and then the reforms to the IR 35. legislation around what’s a worker, what is it? It’s a company, this is just put an absolute pinpoint problem in front of companies that they have to address and Workforce Solutions, providers are, again, having to do that. But other governments around the world are taking similar steps. And as there is more of this transition, where there’s this blurring of what a worker is, and different worker types and different ways of delivering stuff, governments are going to want to nail that down and say, Look, we don’t even be missing out on the tax that we should be paid. But it’s hugely interesting. And, I think, hugely exciting. And I know, we could probably chat on for another, a good hour or so more. But just to kind of bring things to a close, I really your time. It’s been great to kind of get your take on it and bounce these ideas around with you. And no doubt, hopefully, we can have lots more of these types of conversations moving forward as the market does start to progress. Because I just think you’ve seen so much in other areas of the workforce industry that will inevitably be applicable to this as it moves through the stages of development.
Andrew Karpie: 1:06:47 No, I look forward to that, too. And I do believe that, you’re gonna see creasing interest in solving services, procurement problems. And, my closing argument would be focus. And I think that’s where the contingent workforce solution providers can really help companies to begin to make progress.
Jonny Dunning: 1:07:11 Brilliant stuff. Okay. Well, listen, as you’re an independent operator now, what’s the best way for people to get in touch with you? I know, obviously, you do a lot of stuff on LinkedIn and things like that.
Andrew Karpie: 1:07:21 Yeah, they can track me on LinkedIn. And that would probably be the best way to contact me. So without giving up my email here and having it published across the internet, so Okay, sounds good. Hey, so great to talk to you. Thank you.
Jonny Dunning: 1:07:42 Thank you so much. Take care.