CWS 3.0: June 29, 2011 - Vol. 3.15

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Feature: Exploring the Benefits of MSPs

When I was asked to pen a column on the benefits of managed services programs (MSPs), my initial thought was to reach out to the companies for which my firm has built programs over the past few years and ask their leaders to share their opinions on the subject.

Then my wits got the better of me. It just wouldn't be right to subject you to the euphony of well-crafted sales messages from a series of CEOs and heads of sales.

My next thought was a Letterman-like Top 10 list. Then I thought of the pained look on my kids' faces when I crack a joke to a waitress. You don't deserve the accompanying level of agony (that years of analysis won't cure).

So, today's approach will be my attempt at a balanced treatise on the value MSPs add to the procurement and management of contingent workforces. All of these value propositions may not pertain to all companies, but they have a broad level of applicability. Most important, it isn't an exhaustive list; these attributes are based on conversations I've had with buyers and leading MSP and VMS players. In short, this is my view on what matters most today.

  • Visibility. This has become an interesting value proposition in recent years. Two to three years ago, it was all about seeing all of an organization's transactions and working to identify rogue spend. Now it's more of a panoramic view companies are after. They want visibility into basic spend management issues such as fill rates and spend-to-budget ratios as well as high-end business analytics and best practices of firms inside and outside the typical staffing spend value chain.
  • Control. In the hands of corporate empire-builders, control becomes a manacle that handcuffs even the best-run programs. In more intelligently run programs, control focuses on building best practice-based policies that help the company grow and managing the exceptions to those policies to ensure that compliance and control enhance business processes, not hinder them.
  • Spend Management. MSP isn't just for contingent workforce programs. Well-run programs include statement-of-work, outsourced projects and other non-staffing elements. Great suppliers need to deliver holistic solutions that improve a customers' total spend, not just on staffing, but on all programs beyond traditional FTEs.
  • Risk Mitigation. From background checks to OFCCP to IRS compliance to Sarbanes-Oxley, well-managed MSP programs shield buyers from financial and regulatory risk. How much depends on the level of engagement the client company allows. This is a value proposition few MSP providers legitimately offer. It could be a good litmus test going forward.
  • Cost Savings. The question here is whether this benefit should be listed first or last. In the past, savings may have been the first thing companies considered when making purchasing decisions. Today, though, with many companies working on their second- and third-generation programs, cost savings have become something of table stakes --  if you don't have a track record of delivering costs reductions, you don't get to have a seat at the table. That's what happens when a market matures — MSP providers need to do more than just save some money for the buyer.

Your company should be enjoying at least some of these benefits from your program. If not, or if you want get more out of the relationship, engage your MSP in a conversation — ideally at your next quarterly review — about how it offers value around these features.

And rather than accept a pat answer to each, ask for specific, concrete examples of how the MSP is applying elements such as visibility and risk management to your program. Beyond learning about how your partner operates, you and your program will benefit from pushing the proverbial envelope a little more than normal.

Jim Lanzalotto runs Scanlon.Louis, a strategy and marketing outsourcing firm that helps companies grow. He can be reached at jim@scanlonlouis.com or 610.212.5411.You can also follow him at twitter.com/jimlanzalotto.

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