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Rethinking the MSP Model: From Sourcing to Success

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Spend Matters welcomes this sponsored article from Michael Werblun, chief executive at ZeroChaos.

MSPs have evolved as client expectations, industry advancements, technology innovations and new sourcing channels are changing the way organizations do business.

Traditionally, MSPs were narrowly defined due to the type of work that was outsourced. At that time, organizations had very distinct criteria on which they measured providers. It was all about managing hourly labor, sourcing talent, and performance. Fast-forward to today’s landscape – after nearly two decades into formal contingent workforce management (CWM) programs and MSPs – and it’s clear that the contingent workforce has changed, and resources are different and more readily available than they were in the past.

Emerging digital capabilities, globalization, more flexible services, provisioning, configurable solutions and an expanding scope of services and procurement initiatives have reframed how we think about the role of MSPs. The contingent workforce now represents everything from freelancers and contractors to large statements of work (SOWs) for services with varying talent pools, and more.

Technology over the past 15 years has also transformed everything we do — from a consumer to an enterprise perspective. We now have borderless enterprises in which the workforce is not tightly bound within the conventional brick-and-mortar building.

Given these market dynamics, it’s clear that managing programs and resources, and connecting the worker to work is a more complicated process than ever before. Organizations are faced with many varying challenges including improving compliance, enhancing CWM visibility and intelligence, optimizing talent engagement strategies, reducing cost, and now managing the many sources of talent labor.

The Importance of Procurement

It’s important for organizations to rethink how they source and manage talent, improve the talent experience, and reassess how work is addressed. A key to the success of managing the new contingent workforce is how procurement can play a more provisionary role in helping this process.

Procurement’s role in an organization should be elevated as a strategic partner in the business, as it is no longer just a single division for supply chains. Given the new workforce, it now touches the entire enterprise — including IT, accounting, finance and human resources — and helps apply rigor to workforce processes. Procurement must be fully integrated across the business to provide decision-makers the ability to see a holistic view of their organization’s workforce as well as needs for future talent.

For example, procurement historically has not handled staffing suppliers. Likewise, HR rarely manages large procurement contracts. But, these divisions need to work together to understand what is coming into their organizations as a workforce – across all segments – in order to analyze and understand what is being paid, to whom and for what services. A holistic view will help organizations make better business decisions, and MSPs can help bridge the gap between various divisions.

Procurement should now behave more like a service provider — managing external suppliers and delivering services to meet the demands of their business. The good news is — with more advancement in the space, modern technologies, more educated buyers, research and up-front analysis — the procurement division can now better understand the organization’s capabilities and needs. This makes it much more efficient to hire the right talent pool to do jobs and complete projects, whether it is in-house or utilizing a third party.

The Road Ahead – Finding the Right Partner

It’s clear that the MSP has evolved from its origins as a narrowly-focused contingent staffing supply chain solution to managing a broad set of enterprises and workforce. The emergence of new models, technologies, market intelligence, benchmarking, and innovative ways of sourcing will continue to arise – and MSPs will to play a critical role well into the future.

Whether an organization is on the front-end of a maturity curve of an MSP program or already has a thorough process in place, it can be complicated to navigate all the possible approaches to contingent workforce management. Speed to market and smarter buyers will continue to drive change – and the lines of technology and services will continue to blur. Market dynamics and political administrations also could affect talent management platforms, so the road ahead for managing this workforce will continue to become more complex.

Organizations that do not have a clear MSP program should start considering one now so that they can be better prepared. The right partner can help scale with you to meet this evolution of economies and market demands. When looking at the right partner, ask MSPs personal questions about their own business operations and their internal philosophies for managing efficiencies. This will give you a glimpse into their DNA, which in turn will help you determine whether they are the right fit.

MSPs can offer a scale of economies to help meet demands in terms of transformational and organizational change. They should now be seen as a broader business partner that helps orchestrate resources and capabilities as opposed to a manager of processes and SOWs – ultimately expanding the capabilities of core and non-core processes and offering organizations more solutions and services.

To learn more about the future of MSP, listen to this webinar that we hosted with Spend Matters.

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