N o, “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.
Mega programs, or programs with spend of more than 300 million, are becoming more common.
In fact, one of the hot topics at the 2013 CW Solutions Forum and CWS Summit was mega programs. Subadhra Sriram, the Editorial Director of Staffing Industry Analysts, has commented on the proliferation of mega programs noting “We are now aware of 62 such programs.”
Procurement, sourcing, and human resource professionals should be aware because the growth of these types of programs is a reflection of the state of the market and offers some insight into where the industry as a whole is headed.
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.
Mega programs by nature are large, complex programs and issues that need to be addressed also include managing the program in terms of geography, spend categories, business units, and often the use of multiple Managed Service Providers.
Don’t be left behind
If your organization is considering implementing a mega program or your current program is reaching the mega level, you owe it to yourself to find out as much as you can about how to move forward successfully. Having the right VMS technology partner, like Beeline, that has experience with mega programs is one way to prepare for and even avoid many of the challenges you may face. We’d love to hear about your current challenges or experiences with mega programs. Leave a comment below and let us know!