Software as a Service, Platform as a Service
I just got back from a Salesforce developer event today.
Just wanted to open it up for discussion, how do you think the SaaS model, compounded with the recent developments with Chimes, affect the VMS and staffing industries?
My two cents on this trend, and I hope you will discuss: emerging platforms make it relatively easier to develop and deploy new custom applications. Several things can happen:
1) Staffing firms that didn’t have proprietary end-to-end solution will now have the opportunity to offer it to their clients as development costs dramatically go down.
2) Clients will have a lot more choices than they currently do.
3) End-to-end/VMS solutions will be a standard offering from staffing firms. There will be greater weight placed on staffing than the technology piece.
4) Eventually, clients will take advantage of the PaaS model and require vendors to work with their respective platforms.
5) Which brings us back to square one. Staffing.
Just my two cents.
Any thoughts?
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Topics for the VMS Workgroup
Please add to it by leaving a comment.
- I once started a list of VMS providers and it obviously needs refreshing. Yes, ECG is still listed there.
- Not all of those providers have the same model. Some go with the SaaS model such as IQNavigator, some are MSP-VMS combos. I’m looking to come up with an industry list that kinda sorts through them.
- …then maybe a discussion on the merits of each model.
- Payment systems?
- Agreements? On hindsight, a lot of agreements made with Chimes were seriously flawed. What were those flaws that lead up to this mess?
- What sorts of practices should we all follow?
- Recruiting. A whole can of worms. Please leave specifics in the comments.
- VMS-MSP-subvendor relationships.
- This is just a starter list, please leave your comments or e-mail me.
The collaborative web space is located here: http://www.vms-workgroup.org/community.
There’s nothing there, still, but this is an industry effort so I’d like your help in helping me build it. There is a section for forums, a section for blogs, polls, etc. Hopefully you can help me come up with topics.
If there’s anything else you’d like to see there please let me know.
The site is functional, you can request a contributor account there.
Though please be aware that it’s Macworld week and I am all RDF’d out…(and I do have a day job that I happen to love) so it might take me a day to respond to requests. Thank you!
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The VMS Workgroup…
Here’s a bit of a draft that I had going….
I’m still playing around with the content management system that I hope everyone can find easy to use, so that everyone can participate.
But please read through what I have now, please add to it by leaving a comment below, or you can e-mail me.
Mission
To create a set of evolving standards through dialog.
The need:
There is little conversation going on about the issues surrounding VMS. There are tons of information online, but most are sales and marketing literature from the individual providers, offering very little insight to clients and suppliers. Then something like Chimes filing Chapter 7 bankruptcy comes along and next thing we know that’s all there is to the staffing industry.
The dialog can be a valuable industry resource.
Selling staffing services is tough enough, it can definitely do without stories like Chimes.
While we do recognize that there are more formal organizations out there who have published their own best practices, there is still a need for a less formal venue for discussion:
- Lower cost of entry, more participants
- Open discussions will allow us to bring up and address items a lot quicker than a committee would.
- Information is useful only if it is accessible. Information is useless if nobody knows it exists or if it is locked away in a pdf somewhere.
Participants:
We’d like to see all VMS stakeholders participate: staffing suppliers, VMS providers, MSP providers, end clients, and that includes the contingent staffing population.
Rules:
- This workgroup is for the legitimate discussion of issues. Please do your selling in your respective websites. I can list the participants and the logos of your companies, but let’s try our best to avoid our selling tone.
- On points that you do not agree with, I urge everyone to discuss in a professional manner.
- Unprofessional and foul language will not be tolerated.
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Staffing Industry Analysts Report
Some key items from today’s Staffing Industry Analysts Briefing on the Chimes Bankruptcy.
- The ECG shut down is a huge setback in the growth of VMS as it happens during a time when staffing suppliers are barely warming up to the VMS model.
- The total amount of money involved in the ECG bankruptcy is unknown, but there are unconfirmed reports that the figure is around $200 million.
- The briefing cites a 2006 report where ECG reportedly had 42 clients with 42,000 temporary employees running through the system.
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Housekeeping Notes
My blog has gone down off and on due to the amount of traffic that has come through in the last week.
You can subscribe to my blog as well through a feed reader which might be a faster alternative for some of you: Click here to subscribe to the feed.
I’m hoping to get the VMS Workgroup up and running by tomorrow. I do have a mailing list going. You can e-mail me or you can leave a comment if you’d like to get notified when that’s up.
I upgraded my Wordpress installation over the weekend and I might have missed something which is why you’re getting an error message when you submit a comment. Your comments are getting through though. Thank you.
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How the Chimes Drama will change the VMS landscape
I got a call earlier from Staffing Industry Analysts asking about how I think the Chimes Drama is going to change the VMS landscape. Is it going to cause client companies to be leery of VMS?
My answer was that while there will be those who will be quick to predict the demise of VMS, the contingent workforce needs of their customers will remain the same. Fact is that VMS’s do address their clients’ need for streamlined and efficient processes. What is going to happen in Chimes’ aftermath, however, will be:
On the client side, companies will re-examine their current contracts, pinpoint vulnerabilities, address them, and come up with contingent strategies. It is a true wake up call. Did anyone really predict this? Hewlett Packard surely didn’t see this coming, and it’s tough to say that HP didn’t do its due diligence when it signed on with Chimes.
On the agency side, I predict that staffing firms are going to take a closer look at the agreements they sign. Lured by the opportunity to work with big name-brand clients such as Hewlett Packard, there are staffing firms who chose to sign unfavorable and risky terms of agreement. Some have even gone as far as changing their business models to adapt. Some outsourced recruiting efforts for their VMS clients to accommodate the low margins on these accounts and as a result, the effects of Chimes Drama will be felt not just by the third party vendors but the vendors underneath them as well. I’ve received e-mails from a couple of firms in India and the Philippines who are currently in this situation.
Again, these are my personal opinions and not my employer’s.
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The Chimes Conundrum in a nutshell
It’s all about the payments.
The Chimes conundrum shows that the TOTAL OUTSOURCING of an organization’s contingent workforce activities - including and most especially payments - can prove disastrous should something happen to the vendor.
There are many reasons why a company should use a VMS or an MSP: streamlined processes, risk mitigation, supplier management. An MSP can be a cost-effective interface to simplify processes for a client when dealing with multiple vendors. Keyword being INTERFACE.
Siphoning payments through a single entity is not only unnecessary, it makes as much sense as depositing money in an uninsured bank.
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From my inbox
I would like to share a few e-mails that I have received in the last couple of days. Since they were sent to me via e-mail and not left as comments in my blog posts, I will NOT make attributions here.
Update: just got my permission, the following e-mail was sent by Bret Bass from Agile1.
I thought he was spot on, and thought I’d share with the rest of you.
I agree with much of what you’re saying here, and there are a couple of points I’d like to throw out for consideration. First, having come from a different industry (I’ve served in senior management levels at Tyco, GE, et al.) there’s certainly a case to be made for minimizing disruption and potential damage to any industry’s “interdependent ecosystem.” Acquiring the assets of a distressed company is a poor substitute for organic growth. When companies begin down the path of acquisitions to replace sales efforts, little good comes from it. This is also the lesson Axium should have learned itself. The purchase of Chimes was an $80 million mistake, designed to bolster a company that had not enjoyed the benefits of much organic growth. We used to call this “re-arranging deck chairs on the Titanic.”
My main point, however, is that companies slavering over the morsels left in the wake of Axium must remember that they are seeking to replace a product that often received high marks and much customer praise. Simply offering a replacement doesn’t mean that the new product will be as good, as cost effective, or as feature rich. In my experience, many companies will turn predatory quickly when such an opportunity arises. Desperate customers may find themselves saddled with a cumbersome, expensive, and poorly performing VMS because it was there. In such an instance, problems far worse than buyer’s remorse await an impetuous business owner.
Legal teams for companies who relied on the Chimes product are also advising their clients against using the applications for fear that accessing it would cause funds paid through the system to be claimed by the bankruptcy courts. Many of these companies are being urged to use manual processes in the meantime. What I’m taking this to mean is that there will be no quick and easy VMS replacement for Chimes. Without access to the data, everything will need to be entered into the new VMS by hand…a long and resource-laden process. VMS providers would be well advised to approach this undertaking not as a “transition” but as a new implementation. I’m not sure they will. It may be that we’ve not yet seen the darkness that they say precedes the dawn.
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Just thought I’d share one more thing about the NAACB call this morning…
The status of most of Chimes’ agreements with their clients and their vendors are still largely unknown. In the meantime those same clients are seeking continuity and as a result, are trying to initiate direct agreements with Chimes’ suppliers.
According to the attorney at the call, Mark Bloom, that is actually not a good move.
As crazy as it sounds, while the status of these contracts are still up in the air, attempting to deal with the vendors directly might actually be exposing the clients (and the vendors) to more risk as that could constitute material breach of contract.
Meaning. It’s better to engage with new vendors that were not associated with your relationship with Chimes. Caveat, I’m not a lawyer, I’m just telling you what I heard and as I understand it.
It’s unfortunate that during the call, there were some staffing firms already salivating at the thought of taking on swooping in and taking employees from affected vendors. Yeah I know it’s all business.
But c’mon, folks. I know it’s tempting, but this kind of behavior doesn’t do the industry any good. We can’t always be the quick-fix industry known for its opportunistic sharks. It doesn’t do anyone any good in the long run. Please listen to what the client really needs and perhaps learn how they even got in this mess in the first place.
Play nice.
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The VMS Workgroup
Working here to get the group established.
I am well aware of the HIC’s work on developing the industry standards and guidelines for VMS and MSPs. This is great, however is not to replace or duplicate what the HIC has already done, but to create more of a dialog to create an evolving set of guidelines and standards.
The keyword here is EVOLVING. Case in point: what was true this time last week, isn’t anymore. Things that made sense last week don’t anymore.
There’s a ton of work involved in organizing this, so please bear with me. You can still leave a comment and email me if you’d like to get an invitation to take part in the VMS Workgroup.
In the meantime, what do YOU have in mind? What are your expectations of such a group?
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About This Blog
Lisa Amorao is currently the Marketing Programs Manager for ATR International, a Silicon Valley-based contingent staffing firm.
Lisa has held roles in recruiting and sales before moving on to her current role in Marketing.
The opinions expressed here are her personal opinions and does not reflect those of her employer or any of its clients.
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