SAP is buying a cloud-based solution for overseeing procuring and managing freelance or contract labour and services.

The company said Wednesday it intends to buy Fieldglass Inc. of Chicago, which makes a vendor management system. It will meet the growing demand of employers to manage flexible workforces that can be quickly retained and on-boarded to support rapidly changing business and customer needs, SAP said.

Fieldglass will marry up to SAP’s other cloud-related offerings, SuccessFactors for human resource management and Ariba for procurement.

When completed the acquisition will all SAP to deliver a platform for businesses to manage their entire temporary and permanent workforce from recruiting to retirement, the company said.

Among its Canadian customers is Telus. Competitors include IBM’s Emptoris Services Procurement, Beeline’s Beeline VMSDCR Workforce’s Smart Track, IQNavigator’s IQNavigator (the company just purchased ProcureStaff Technologies, whose product is Consol), PRO Unlimited’s WAND X and Peoplefluent’s Peoplefluent VMS.

“With the acquisition of Fieldglass we are taking an incredible step forward to further expand SAP’s leadership in a public cloud offering for the enterprise,” said  Vishal Sikka, member of SAP’s executive board responsible for products and innovation. “With the power of SAP HANA, SAP Fiori and the Ariba Business Network combined, we can quickly extend the value to our joint customers.”

SAP (NYSE: SAP) believes the contingent labor and statement-of-work services area is a US$3.3 trillion, high-growth market where companies add and shed infrastructure, talent and expertise to accommodate changes in business needs and special projects. Contingent workforces are expected to grow by nearly 30 percent over the next three years, according to research by Ardent Partners.

Fieldglass has about 350 employees, and says its service is offered in 16 languages by customers in more than 100 countries.

In a recent report Forrester Research said vendor management systems are a critical part of having a flexible contingent labor strategy by helping companies monitor and control costs for both project and non-project based work. Reducing the number of errors in time reporting and invoicing is the top benefit of such systems. Forrester estimates one-fifth of IT budgets go to contingent workers.