Last week, procurement software maker Coupa Software announced it acquired DCR Workforce, a provider of a vendor management system for managing contingent workforces. Coupa reported it paid $25 million upfront for the company with an earnout potential, according to a conference call with analysts.

“This acquisition could end up being a watershed moment for the industry,” said Bryan Peña, senior VP, contingent workforce strategies at Staffing Industry Analysts.

“It not only demonstrates the continued appetite for consolidated technological solutions that address an ever-increasing piece of the enterprise third-party spend,” Peña said, “but could, more importantly, signal a potential shift away from traditional MSP partners as companies like Coupa leverage management consultancies and higher-level relationships within the organization to deploy the technology.”

DCR Workforce’s VMS operates under the Smart Track brand; the Boca Raton, Fla.-based company was founded in 1995.

“Effective visibility and control of contingent labor spend continues to be a growing priority for best-in-class organizations,” Coupa CEO Rob Bernshteyn said in a statement. “I am excited to welcome co-founders Ammu Warrier and Naveen Dua and their team to Coupa and look forward to delivering on our shared vision.”

Coupa announced DCR Workforce will build upon its “Coupa Services Maestro” offering that provides statement-of-work management, and the company will integrate DCR Workforce’s functionality into its platform. The new offering will be called “Coupa Contingent Workforce.”

Coupa CFO Todd Ford said in a conference call that DCR Workforce has two key businesses. “One is a VMS, vendor management systems, the piece that we’re most interested in, and then they also have a managed service provider business. So the deal that we did was an asset acquisition so that we picked up the assets related to the vendor management system and the key people there as well.”

Later in the call, Ford said the company will continue to support customers who use both DCR Workforce’s VMS and MSP.

“In today’s gig economy, businesses have greater access to temporary labor and services around the globe to augment their workforce in new and innovative ways. With this expanded labor force comes the need for more sophisticated solutions to manage onboarding, offboarding and services delivery, all while ensuring local labor and compliance requirements are met,” said Warrier, DCR Workforce president, said in a statement. “We are thrilled to join Coupa to deepen the company’s offering in this space so that businesses can spend smarter across every aspect of their business.”

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