Medium-sized companies that use contingent workforces are getting more attention. This week, vendor management system provider SAP Fieldglass announced a new VMS product, called SAP Fieldglass Flex, aimed at medium-sized buyers.

“This development is another example of how external workforce solutions are increasingly supporting mid-market, following the Allegis Global Solutions launch of SIGMA earlier this year,” said Elizabeth Rennie, global workforce solutions research director for Staffing Industry Analysts.

“Traditionally, external workforce solutions have focused on organizations of more than 10,000 employees representing approximately 63% of the total VMS market size according to Staffing Industry Analysts,” Rennie said. “However, as continent workforces grow in size and risk management strategies are applied, mid-market organizations are expected to increasingly look to VMS and MSP solutions.”

SAP Fieldglass President Rob Brimm said one impact on the contingent workforce ecosystem by SAP Fieldglass Flex is it will dramatically increase the amount of spend under management, increasing the number of data points available for benchmarking.

In addition, for staffing firms, the product serves the needs of large, global firms and SAP Fieldglass sees Flex as a fit for other classes of staffing suppliers as well.

“It really opens up for all tiers of people in the supply chain to leverage technology to lower cost of delivery,” Brimm said.

SAP Fieldglass defines medium-sized firms as those with $500 million to $1 billion in annual revenue. And one challenge was making SAP Fieldglass affordable to those firms.

The SAP Fieldglass Flex end product has the company’s best practices built into it, and it offers a set of functions aimed at serving medium-sized firms.

Often, VMS systems are supplier funded, but Brimm said it has always been a client decision over the path to take on funding. It’s envisioned that Flex will be a lot more client-funded.

Going forward, demand from medium-sized companies for external labor management technology is expected to growth with the percentage of external workers growing to 50% within a few years from 35% this year.