Should You Insource Your MSP?

You can hate or love it but you can’t ignore the MSP. Staffing suppliers have called managed service providers many a name but have ended up joining or acquiring one. The MSP is here to stay but the question on the top of many customers’ minds today is whether they can be their own MSP, and just insource the function.

Let me start out by clarifying that the companies probing the issue are those with mature programs — typically with more than $100 million in spend. These companies have engaged MSPs and have seen the program evolve over a few years from the more traditional model using temporary workers to a program where different variations like statement-of-work (SOW) consultants, independent contractors and hybrid models are quite common. One example of a hybrid model would be a program where the IT skill set has an internal vendor-neutral MSP while the administrative and industrial segments have a vendor on premise administering it.

“I am not a proponent of a company using an internal MSP without having the right resources and executive support,” says Diana Gabriel, Staffing Industry Analysts’ VP of strategy and solutions. There are those who agree (and it’s not just the MSPs). Conventional wisdom is that companies should do what they do best and leave the recruiting et al to those for whom it is a core competency.

But another growing school of thought is that the future is all about the right talent, and companies should invest in and take control of this function. “When companies outsource to an MSP, there is a disconnect,” says Gary Zander, CEO of Project One, a company that provides IT consulting and staffing services. "They should be fostering direct and dependable relationships with vendors who provide people who are our brain trust. Why would you give up that control?”

Steve Jobs said it well in the publication, Fast Company, when talking about a great employee’s payoff. "The secret of my success is that we have gone to exceptional lengths to hire the best people in the world. And when you're in a field where the dynamic range is 25-to-one, boy, does it pay off."

What is your view? Comment below.

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