MSP and VMS Providers: Are MSPs Effectively Leveraging Technology for Their Customers?

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Spend Matters welcomes this guest post from Terri Gallagher, CEO of Gallagher and Consultants. 

Has the technology evolution driven MSP and VMS providers to a crossroads? VMS technology seems to be evolving at a more rapid pace than MSP Solution offerings. We have the new technology and the old problem, but do we have the big ideas? How are MSPs leveraging technology beyond process and system automation, to expand talent supply chains, provide dynamic data and reporting, and elevating their customer’s contingent workforce management programs?

Customer Needs are Changing

The staples of quality, cost and speed are still key metrics around talent sourcing and delivery. How can MSPs leverage evolving technology to drive results on these critical metrics for customers? Customers today want advanced solutions — sometimes immediately. We recently launched a customer for a first-generation MSP/VMS solution, and before the implementation kick-off, they wanted to know if the solution could also tackle their recruitment challenges and whether it had ATS options. This is where customers are today. They are more sophisticated and educated on the options for managing and optimizing their contingent and total workforce than they were even three years ago.

The MSPs of today need to be strategic business partners, thought leaders and providers of best practices. They need to provide solutions across their total workforce mix: direct sourcing and talent pools, IC’s, perm, SOW, contingent. Customers with first-generation MSPs are now asking what is beyond the basics of cost control, process optimization and visibility.

Technology is Leading the Way

Today many of the tasks traditionally handled by an MSP have been and are being systematically replaced due to advances in technology solution features and functionality.

Beeline’s “Assistant” chatbot uses artificial intelligence (AI) to enable simple, intuitive conversations, to answer questions about workforce trends and help users find and manage talent. It learns from every interaction and the “assistant” grows smarter with each use, as it processes the requests of every user, it begins to understand each user’s linguistic nuances, ensuring more effective communication with every conversation.

It is priority No. 1 for organizations to find and retain high quality talent in an increasingly competitive landscape. And talent acquisition should also be a top priority for MSP and VMS providers.

DCR’s Match Index Intelligence (which “learns” from every manager’s interaction) pre-pairs candidates to requisitions by matching supplier-submitted actual resume content with the requisition details, using natural language processing (NLP) and machine learning to mirror human decision-making without the human bias. It then gives a ranking to each candidate and buckets them into groups for hiring managers to easily understand the best match for the job.

MSPs Must Change to Get in the Game

Effectively (and completely) leveraging VMS technology ensures the end result to the customer is a value-added, end-to-end solution. Enterprise organizations want a strategy that will not only help them integrate their contingent labor into their total workforce mix as part of their “fluid workforce,” but also to acquire and retain that content. It’s critical for MSPs to engage the right mix of technology-based platforms that will help organizations find and retain that high quality talent quickly and cost effectively.

Technology and AI are not “replacing” or diminishing the roles of “the humans.” They are removing non-value added tasks, freeing up our time and energy and enabling us to focus on new skills development, vital human relationships strategic and critical thinking, and extending and enhancing the value of our programs.

With the advances in VMS and other forms of digital workforce platforms (freelancer, cloud and crowd sourcing), how are MSP providers leveraging these capabilities? The feedback we have received from some digital platform companies we talked to is mixed, at best. MSPs still have considerable market share, but there are gaps in integrating these platforms in a cohesive way to overall service delivery. Per a recent conversation we had with a Catalant executive, they are seeing healthy growth and a growing demand from the end users they support directly who want to incorporate more freelancer talent into their workforce. In their experience, a small group of MSPs have been partners in collaborating, while others seem to be behind the times.

MSPs: A New World Awaits

Not only is technology is changing the way we work, but the way we work is changing and driving new technology-based solutions. Per Deloitte’s 2017 Global Human Capital Trends, full-time employees will no longer be the main source of talent as we move to a continuum of talent including contractors, gig workers, crowds and competitions. The focus of workforce planning will shift from focusing on full-time workforce and skill requirements to analyzing options across multiple workforces and technologies.

The best solutions come from strategic collaboration between the workforce intermediaries (like MSPs, ICECs, payroller, etc.) and the VMS providers. We believe that today advanced and innovative workforce intermediaries will leverage the “best and brightest” participants to run lean but smart — and nimble enough to shift with a customer’s workforce priorities. This model will dynamically leverage technology to strengthen CWM programs and expand talent options across the total workforce mix. Fee structures should perhaps also change. For example, the customer fee mix should fairly reflect the technology’s contribution in the MSP/VMS equation to enable maximum return to customers, particularly if progressive MSP models run leaner and smarter.

We recently participated in an MSP/VMS RFP request from a progressive customer where the technology questions exceeded the MSP questions 3:1. Maybe the “new” CWM program is technology-centric engaging complementary supporting services (not the other way around).

In conclusion, we have the technology, an old problem, and maybe the big ideas are coming. Maybe they are coming from you. If so, we would love to hear from you.

Voices (5)

  1. Terri Gallagher:

    Thank you Paul for the great feedback; agreed, takes two to tango. My inspiration for this article is the clients we are supporting today, who are ready or are looking for guidance and thought leadership to take their programs beyond the transactional. They are eager for proactive communication and strategy on elevating their CWM programs. When the value is articulated, in the right venue to the right audience, in a way that resonates; improved overall talent strategy, expanded talent supply chain, integrated workforce solutions, your customer will be motivated. It does take two to tango, but in every good dance, someone needs to lead.

    1. Paul Vincent:

      Please accept my apologies for addressing the comment to Andrew – I saw your article on his LinkedIn feed and did not realise it was a guest post. Everything else still stands though! I would be very interested to exchange ideas on how to innovatively transition a program along the maturity curve – perhaps we even could collaborate on a follow up post for Spend Matters!

      1. Terri Gallagher:

        Hi Paul, no apologies needed. Would be great to chat and will reach out under seperate cover.

  2. Paul Vincent:

    Andrew as always you offer very sound insight. As a well established global MSP we are constantly reviewing the end to end value of our service offering and seeking to exploit the deepest range of VMS functionality possible. However I would like to offer a further dimension to this discussion, which is that client ambition makes a huge impact to the success of an MSP programme. The clients who overly focus on talent management as a cost will likely have a programme that offers transactional benefits only and these will have diminishing returns. Those that see talent management as a value generator/competitive differentiator will have a programme which stretches the MSP to makes the most of the technology advances on their behalf. In this case it really does take two to tango!

    1. Andrew Karpie:

      This was Terri Gallagher’s article and thinking (which I totally agree with). I’m pleased facilitate. Thank you for your comments, Paul!

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