No, “the rise of the mega program” isn’t an indication of a looming Armageddon or one of the signs of the Apocalypse.
However, the increase in the number of existing mega programs has caught the attention of professionals in the procurement, sourcing, and human resource arenas for a few important reasons.
What’s driving this trend?Some of the factors driving the rise of the mega program include an expanding definition of the non-employee worker, increased use of non-employees throughout organizations, globalization, and the aftermath of the Great Recession. Spend under management is growing rapidly. As more and more organizations look for competitive advantages by driving efficiency, controlling spend, and seeking market-based flexibility expect the growth of mega programs to continue.
- Globally, approximately one-third of non-employee labor is managed either by an MSP or run through a VMS.
- Spend under management through a VMS, an MSP, or both, is greater than $100 billion worldwide and growing.
- These aren’t just SMBs either. We’re seeing an increase in enterprise users of contingent workforce as well.
What does this mean for procurement, sourcing, and human resource professionals?Obviously, non-employee workers will continue to have an impact on staffing. Large businesses have already started to focus on managing the contingent workforce supply chain more effectively. Professionals tasked with implementing or managing mega programs will need specific skills and tools to reap the benefits of controlled spend and increased efficiency that mega programs offer. Managing talent and strategic workforce planning are issues most procurement, sourcing, and human resource professionals deal with but mega programs present their own unique challenges. These include:
- Sharing business intelligence across multiple business units,
- growing complexity of legal compliance,
- a more competitive global business landscape, and the rise of emerging economies.