* Photograph by Andrea Flanagan

The IQNavigator/Beeline merger, announced in December 2016, made waves in our ecosystem, creating new alliances and reshaping old. Along with the merger, Beeline was spun off from Adecco to private equity firm GTCR. The new, combined company is the second-largest VMS provider, according to data from Staffing Industry Analysts, the publisher of this magazine. Together, the combined organization, Beeline, has around 300 clients, many of which are blue-chip companies with mature programs, some with a total annual spend of more than $1 billion. SIA Editor and Publisher Subadhra R. Sriram caught up with Beeline CEO Doug Leeby to talk about the merger, the company’s plans, innovation and what lies ahead.

Q: In December, you announced a merger with IQNavigator. Six months in, what is the biggest benefit of this merger to the ecosystem?

Doug Leeby: We’ve got a very forward-looking approach coupled with the largest data sets in the industry, which bodes very well for our customers. At this point, you’ve got the biggest number of VMS experts under one roof, managing the biggest data set out there. And of course, we’re partnering with TDX [Brightfield Strategies’ benchmarking program], which certainly augments that. So, in short order, the Beeline legacy platform customers were able to glean some of the great things that IQNavigator is doing and vice versa.

IQNavigator had already done some really sound work on an ecosystem of partners. And Beeline was doing the same thing within its self-sourcing product as well. Our approach continues to focus on being the absolute best at what we do; it’s very important that we continue on this path. Consider the ATS, workforce analytics, background checks, assessment talent pools. These are all areas that are going to be interacting with what we call VMS today. They create a valuable ecosystem.

And then of course, our colleagues are incredibly important to us. This merger is a big change for them, and both of our organizations have done well on our own. The coming together of our two companies, the enthusiasm, is not just the fact that you’ve got really smart people coming together with whom you’ve done battle for a lot of years, but the sense that the game has changed dramatically from three major global players to two.

And that just begets more success and a sense of winning and frankly, our sales and momentum have been at an all-time high. The market reaction has been very good. So anytime you’re winning, that bodes really well for the culture. And of course they buy into this strategy that we put in place. This is not a new strategy; so we’ve kept the strategy we had, we’re just able to go a little bit faster and harder with the augmentation of talent.

Previously, Beeline was owned by a staffing firm, Adecco. What are the differences and pros/cons of being owned by a private equity firm?

My entire tenure with Beeline had been under staffing firm ownership — prior to Adecco it was owned by MPS Group. Adecco was fantastic, allowing us to operate independently. When they acquired us, through the MPS acquisition, they told me two things: One, because they understand we’re in a highly competitive environment, they would fund us. And also, they knew they needed to stay out of our way. I think the industry knows what happened when Adecco worked with WorkCard years ago, and frankly, that was my fear. So I was fairly relieved when Adecco gave me that commitment.

Also, as a global organization, Adecco exposed me to talent, much of whom is with me today, as well as international legislation and things of that nature that were important as we expanded.

A negative was that the term “vendor neutrality,” which I hadn’t heard until Adecco came into the picture, became used quite a bit more. That’s OK, but we had to battle the perception that we were not neutral. Certainly some of the partners who were also owned by staffing firms couldn’t see past our parental lineage. So I would say that was a negative side of it.

The first six months with GTCR have been really good and highly growth-inducing. I would say the greatest benefit relates to what I just said — the market now truly believes that we are independent. I was meeting with an MSP partner recently who said, “This is so great that everything is changed, you’re finally independent.” And I said, “No, what’s changed is your perception, because we always operated independently. But fair enough, now you know it to be fact.”

GTCR operates uniquely for a private equity. They encourage us to serve independently and continue to run the business, but they do provide two very important things: accountability and focus; and advice and counsel. So, while I don’t interact with them frequently, I can assure you they are holding me accountable to our strategic and growth plans, but they are also there to provide counsel when necessary.

What are the biggest challenges as a result of the Beeline/IQN merger? How are you dealing with them, and has your perception changed post-merger?

Yes, my perception has changed. I would say the biggest perceived challenge would be the assimilation of two cultures that have fought vigorously over the last decade and a half. But I’ve been most surprised and heartened by the fact that the two companies have come together really, really well. And now, having a split management team, I think matters. At Beeline, we’ve always believed in talent first, so we look for the best fit and it ended up that the executive team is split from folks from both sides. I think that is where you have some of the concerns from both organizations about how they’re going to be led. Some of the challenges, frankly, are mitigating the rumors that are out there. I have been on the road constantly since late December, meeting with legacy Beeline and IQNavigator customers, MSP partners and frankly, anybody who has questions and concerns, because it’s so important that they understand how we’re moving forward. And I’m sure you can appreciate in times like this, competitors will take certain liberties, perhaps unfounded, and there’s some of that fear, uncertainty and doubt in the marketplace.

So that’s my challenge — getting the word out to as many people as quickly as I can and helping them understand our strategic approach and our convergence message.

The staffing industry has traditionally viewed the VMS in a negative light. How have they reacted to the merger?

I haven’t heard as much negativity as I used to, say 10 years ago. I don’t think staffing held anything against software. I think their angst emanates from margin erosion, thanks to our supplier-funded model, and through relationship disruption or intermediation — which were at the behest of our clients. So I think that’s really where the pain came from and certainly VMS, the advent of VMS and MSP, contributed to some of that angst.

That said, I think there’s still work to be done in terms of how we operate with the staffing firms because they’re a very important component of this relationship.

In relation to the merger, what I heard the most from people was that they didn’t see it coming, but it’s brilliant. MSPs love the independence and the fact that they can focus on two major players now, versus three. From a staffing firm’s perspective, I have received a lot of emails and congratulations and encouragement. To be fair, it’s been a small sample, although I appreciate it quite a bit. And then from the industry and market overall, it’s been overwhelmingly positive. Clients are thrilled about our “put our money where our mouth is” approach.

What’s going to be happening in the second half of this year, what are the key initiatives you’re going to be focusing on?

My strategy for the second half is the very same that it has been in the first half and is for next year as well. I’m focused heavily on customer retention/delight, keeping them very happy and listening, as we already try to do with this organization so we can continue to bring more value and an execution on the strategic plan.

From a technical perspective, you’ll see us continue to focus on convergence and innovation. We’ve got to keep delivering on that. In other words, our releases will continue to focus heavily on user experience — not just user interface, but user experience — data analytics and machine learning. Of course, there’s still some great advancements in services procurement that we’re bringing into the market and then self-sourcing and alternative ways of sourcing and establishing talent pools continues to be a focus as well.

What’s your plan with the Beeline & IQN platforms? Please explain in layman’s terms?

In the past, in a merger like this, you would create a “lift-and-shift” (common cloud migration option) strategy with your clients. For example, if we were to ask all IQNavigator clients to move over to Beeline, or vice versa. Half your clients in either scenario would be upset with that.

Technology has advanced dramatically in the last five years, specifically from an architectural perspective. In a way, it enables me to basically provide our clients a best case scenario, meaning you don’t have to go through the lift-and-shift option. You’ll be able to stay on your current platform and over time we will converge you to the new platform.

What is your vision for the VMS? How do you see this playing out and what is the opportunity for Beeline?

I think the VMS remains at the center of the extended workforce and the processes involved. So I see great promise. I will say this. I think the VMS moniker needs to go away, and I think it would be fair to say there is no VMS 3.0. But the base functionality and the value that we can and will continue to deliver remains intact and will grow. I think what you need to see as well is a push rather than a pull — meaning today we do a very nice job, I think, in our solution with things such as “did you knows” where we’re providing information at key decision points within the workflow. However, on occasion, what I find is the action isn’t commensurate with the data that we are providing. In other words, people are busy, and they just want to make their way through the application and, for example, get a resource.

I think we at Beeline need to do a better job providing actionable information with the immediate choices. What we’re providing now and continue to work on are data sets that help clients understand that if you’re trying to achieve a specific outcome or a goal, there are several ways of doing that, several types of talent at different prices, different geographies, locations, talent, skills. All that. It needs to be incorporated into decisions, but it’s one thing just to lay that information in front of you, it’s another to aggregate it in a way that provides suggestions and takes some of the guesswork out for higher propensity for success.

So I see a huge evolution happening, I think it’s fair to say we should not be calling it vendor management — because it’s far more than vendor management — but in terms of managing the extended workforce, I think it’s very important and we need to continue to focus heavily on the user experience. I think data is interesting, but until it becomes actionable, it doesn’t do much and so that’s the game changer, and as I said clients want advice, not workflow. So those are the things that we’re focusing on and I actually think you’re about to see a precipitous change in the industry.

Do you see any threat to the VMS?

I always talked not so much about other VMS providers, but about the smart kids in their garage who are thinking about how they can disrupt the system. So, I think it’s our responsibility, our obligation, to disrupt the system before others do. Frankly, we are trying to put VMS as we look at it today out of business, and that’s why I say it’s a really poor moniker for what we do. We are evolving to provide far more value and focus on workforce optimization and things of that nature. VMS has been here for at least a decade. I do think it’s going to undergo a major change and I think it’s our responsibility to lead that change and I would be greatly disappointed if Beeline in five years looks like it does today. I do think

VMS as we know it is under threat and that’s a good thing — I hope to be the chief threat to the VMS, frankly.