Earlier in the month, Procurestaff announced that it was splitting its technology and services businesses into two separate entities: Volt Consulting Managed Service Programs and ProcureStaff Technologies. The press release notes that "Managed service programs previously provided by the ProcureStaff and Volt Workforce Solutions (VWS) business units will now fall under Volt Consulting MSP" and ProcureStaff Technologies "will remain a Volt Information Sciences company, focusing exclusively on enterprise human capital management software products as well as custom software development and integration outsourcing services." Volt's staffing group, "Volt Workforce Solutions, will remain an independent business unit," according to the announcement.
On one level, the reorganization suggests to me that a broader segment of the market is looking to increasingly separate out VMS platforms from MSP services decisions when it comes to selecting providers, an argument that Fieldglass, among others, has been making for sometime. Still, having spoken to a number of IQNavigator customers recently, I can also vouch that at least a portion of the market still values integrated solutions. But perhaps more important is the issue of vendor neutrality that this and other recent MSP and staffing industry practices bring up.
Since originally writing about ProcureStaff, a number (read 3+) of its competitors have suggested to me that I did not adequately cover the notion of MSP neutrality in my original write-up. However, from my original reference checks on ProcureStaff, not a single customer I spoke with (including one highly sophisticated procurement organization) raised this as a concern (even when asked). Still, given the recent YOH incident -- which clearly demonstrates that some MSPs are more interested in lining their own pockets before representing the interests of their buy-side customers -- I'd recommend that we all consider and debate the issue of MSP neutrality as it relates to both MSPs owned by staffing firms and those which claim to be independent.
In a related aside, I thought I'd also reprint a portion of an email to a ProcureStaff competitor that raised the issue of vendor neutrality following this announced restructuring. To this company, one that I respect quite a bit in the market, I wrote "I would agree that issues of vendor-neutrality can be important, but I would urge you to look at the situation from a customer perspective. If [a customer] is getting what they perceive to be top-notch rates, service and support, they're not as concerned about neutrality as competitive providers who pitch it as a core point of differentiation ... this is less about philosophy from a customer perspective and more about results. If you're delivering the latter, the former, provided there's not an ethics issue, is not as important in the customer's eyes (at least from what I've discovered so far)."
Are Procurestaff and other MSPs with staffing affiliations completely vendor neutral as they claim? I have no doubt given what I've seen in other industries that introduce the potential for conflicts of interest across competing P&Ls -- especially when some bring higher margins than others -- that the pressure to give favor to a company with the same parentage certainly exists, even if it's not omnipresent. But MSPs without a staffing firm affiliation can also cross the boundary as well, as YOH's behavior shows, in potentially even more egregious ways, depending on one's perspective.
At the end of day, the staffing and contingent market is one that I've noted is still quite wet behind the ears, which puts the onus on customers to prioritize what they care about in selecting both technology and services partners. If it were me, I'd care first about evaluating providers based on references, industry/regional/country experience and track-records. This holds true for both VMS providers and MSPs. But I'd also care about honest answers when it comes to issues of vendor neutrality and potential conflicts of interest (which if they can be answered fairly and openly -- and confirmed by references -- should not be a significant deal in the end).
So that's what I think on the issue. What is your opinion?
- Jason Busch