Barry Asin's Blog

The Future of VMS in a Post Chimes World

We just got back from the Executive Forum and are all still recovering from a very intense few days. Thanks to all of you who were able to join us and who participated so actively in the forum.

For me the highlight was actually on the very last day, when many people were either already on a plane home, heading to the airport or hitting the golf course or casino. That was when we had our panel discussion on the future of VMS in a Post Chimes World.  I thought it was an excellent session (but maybe I am a bit biased since I moderated the discussion)!

On the panel was Howard Ehrenberg, the bankruptcy trustee for Chimes and Axium, as well as David Cooper of Beeline, the new owners of the Chimes ASSETS ONLY (as he is careful to say), Jai Shekawat of Fieldglass, Jim Lanzalotto of Yoh and Chris Hartman of Allegis.

Among some great discussion and general points, a few really stood out for me:

  • If you read between the lines of what Howard Ehrenberg said, the Axium guys sound pretty likely to have criminal charges filed against them.  Evidently the more than $100 million in tax penalties that the IRS hit them for is primarily for underpaying payroll taxes that were deducted from employee paychecks back to at least 2004.   Axium of course claims it is a simple misunderstanding.  Oops!
  • For those staffing firms that are still owed money by Axium/Chimes it looks like there is a long road ahead.  Basically there is no money right now to distribute.  If Ehrenberg can sue a couple different parties and collect, then maybe some of that can be recovered.  Timeframe from all that is likely to be years, if ever.  Ouch!
  • Jim Lanzalotto of Yoh announced that Yoh is forming a partnership with SAP to build a VMS solution.  In part he sees it as a response to the fears about small, undercapitalized VMS providers out in the marketplace. Jai Shekawat of Fieldglass felt that the jury was likely still out on SAP's commitment to VMS, which is a very small market for them.  Of course, with Yoh financing the push there should be some sticking power for this particular solution.
  • Everyone involved in buying/using VMS/MSP services owes a big thank you to Beeline (and Howard Ehrenberg) in my opinion.  Without the relatively quick resolution that we have had to this problem, we could have an very ugly ongoing situation that would cause all sorts of companies to completely rethink their contingent workforce programs.  Given how quickly and smoothly this has been sorted out (for instance the Chimes software never was even shut down) we are instead looking much more at some tweaks around the edges of the model.
  • Speaking of tweaks around the edges, a lot of people have been discussing the use of escrow accounts as one solution to flowing large amounts of dollars through a VMS/MSP provider.  However, Chris Hartman of Allegis pointed out that the actual practicalities and costs of setting up escrow accounts aren't very workable in the sort of situation facing most contingent workforce programs.  He instead suggested that restricted cash accounts could do the trick.

Of course, I think there is still much more to say about all this.  What do you think?


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