As discussed in my blog, “Utmost 2021 In Review - And A Look Ahead To 2022,” for any organization to continue to be successful, it must make sure to learn from its mistakes and the market. One mistake that we’ve seen repeatedly is this idea that the “Extended Workforce” is simply just a line item in an HR or Procurement Application suite. This has been proven wrong time and again, and as Einstein famously didn’t say: The definition of insanity is doing the same thing over and over again and expecting different results.
Large enterprise application companies are inevitably drawn to the siren call of the inorganic “FrankenSuite” despite their initial aversion to such thoughts. It’s a time-honored, proven business strategy for the acquiring company - grow top-line revenue by expanding functional footprint. It’s all in the data: Our former alma mater, Workday, has made 17 such acquisitions, including nine in the past four years - a trend that will probably accelerate.
However sound the FrankenSuite business strategy may be for shareholders, despite it’s often poor outcomes for customers, we certainly believe it has failed miserably in the world of the extended workforce.
We could talk for days about the likes of Oracle, Beeline/IQN, ADP/WorkMarket, and SAP/Ariba/SuccessFactors, but it was SAP’s acquisition of VMS leader Fieldglass in 2014 that overpromised and underdelivered on a solution that we’ll use to underline our point. When they announced the acquisition, SAP spoke as the “undisputed leader of integrated human resources and procurement,” promising to “provide companies with the software, collaboration tools and networks needed to engage permanent and temporary staff out of the gate — and on the fly — in new and innovative ways.” For any customer who bought into this vision, the reality has been significantly more turgid. However, the much bigger point is that the SAP acquisition of Fieldglass has only cemented in the narrow applicability of a VMS. To this day, Fieldglass is just a small add-on to the Procurement suite from SAP and still cannot manage any personal information about workers!
This was best said by Spend Matters in a highly prescient 2014 article:
“Eventually, such large-scale acquisitions start to catch up with a vendor in terms of the ability to deliver new functionality (which wasn’t exactly speedy to start with).
Just as a procurement organization can’t save its way to zero, a procurement (or HR) technology provider can’t acquire its way to integrated solution excellence. You can become a great ‘mutual fund’ (i.e., holding company), but technology buyers don’t want a mutual fund; they want an integrated product company. And if they placidly accept the answer of ‘trust me – I’m an integrated ERP vendor and running in the cloud,’ then they deserve what they get.”
The workforce is bigger than sum of its parts
The extended workforce is a large and complex problem space. It may look and feel like an HR problem, but in fact, the management of the extended workforce bears almost no relationship to the management of the full-time workforce.
In terms of the extended workforce, absorbing its management under a HRIS system (which we’ll talk about at length in an upcoming post) needs more than an enterprise suite can offer. Aside from a misalignment of job profiles and SOW management that will never be managed well within an HCM (more on this in the next blog post), the extended workforce should be working with other systems, like business spend management, identity management, project management, time tracking, and other tools. Enterprise suites are not designed for this; a complete universe dedicated to them is required.
As Ardent Partners puts it: “Today, it’s not just about managing suppliers and vendors and merely augmenting a contingent workforce management agenda on the world of talent, but rather looking at how to manage the workforce effectively in optimizing how work is done.”
Anyone who wants to shoe-horn extended workforce capabilities into a broader suite has a false notion that this is simple. It's not. We have that lived experience. With the market now transformed from contractor/contingent worker into a broader extended workforce of gig workers, freelancers, SOW-based workers, independent contractors, and more, it has become so much bigger and more complex than a simple module an enterprise suite can manage.
The world doesn’t need yet another VMS. Real disruption is what the extended workforce needs, and this disruption comes from a dedicated focus on innovation. The extended workforce is rapidly changing in front of our eyes. Products need to be nimble to respond - not mired in Suite integration.
The extended workforce requires relentless focus on a network that involves the enterprise, supplier, worker, and all systems that support them. At Utmost, our focus is making this as seamless and scalable as possible with a singular platform to manage the extended workforce – one where customer service, innovation, configuration, and cultural connection are a top priority.
If you want to learn more about what Utmost is doing, please visit utmost.co or be on the lookout for our upcoming blog, which talks more about this network in detail.