It's curious that this is the predominate model in the regular procurement consulting and outsourcing worlds. I can go to Accenture for sourcing consulting, procurement organizational design, outsourcing advice, marketing spend audits and full-blown category and indirect outsourcing. Or I might consider all of the above (minus the deep marketing spend expertise) and knock on CGE&Y's door, but in this case, I would also add the potential to acquire significant internal SAP-based procurement technology capability from their IBX acquisition if I walked through it. With these two providers, I have rarely heard that an initial consulting assignment preceding an outsourcing arrangement or technology/solution-based deal is a conflict of interest.
Yet in the history of the staffing, VMS and MSP worlds, the specter of potential conflicts and/or payroll-based exposure is still very much in everyone's minds (the legacy of Chimes no doubt plays a part in this). However, I believe the combination of consulting, outsourcing and workflow automation that Volt has combined under a single banner may help dispose of this as an issue, especially in the middle market. I also believe we'll see other MSPs and staffing firms create integrated arms that look more like Volt Consulting Group in the future.
And what about VMS conflicts you say? Hogwash. At SIG last week, I spoke to one large and respected MSP that had a strong relationship with and good things to say about Beeline, despite the fact that the VMS in question was owned buy a staffing firm with an MSP arm. I have also heard other MSPs speak highly of ProcureStaff Technologies with no concern that the VMS would be sold simply as a tool to sell higher dollar staffing and MSP deals.
As a final observation pertaining to Volt Consulting Group, I did find it curious that the leadership team articulated that they would price their offerings aggressively and that Spend Matters could read into the model as we saw fit. At this stage of the discussion, Spend Matters observed two vantage points to look at this pricing model: that either the P&L exists on both a stand-alone basis or that it exists as a means to drive exposure for Volt's other staffing and related offerings (or both, for that matter).
Our view is that even where there is an ulterior motive for aggressive pricing, it should not be much of an issue in the middle market given the giant general opportunity for most organizations. But companies should still make sure to articulate the degree of neutrality they value (or not) when it comes to staffing decisions that come out of the MSP-side of the relationship. And of course the same goes for VMS technology as well.
- Jason Busch