To Be or Not To Be … the MSP

When designing a contingent workforce management program one of the more difficult decisions confronting companies is whether or not the MSP team should be comprised of internal or external resources. While it may at first appear to sound like a satirical rendering of modern corporate realities — whether or not to staff a contingent workforce program with contingent workers — this a tough call with very real pros-&-cons on either side of the notepad.

However, perhaps it’s the wrong question, considering many MSPs are really a combination of both internal and external resources – getting to have their cake and eat it, too. We must remember that the purely outsourced MSP model has been effectively proselytized by those in the business of selling outsourced MSPs. This was especially so when the predominance of those selling the MSP-enabling VMS technology were also in the MSP business, offering bundled solution sets. Accordingly, the insourcing vs. outsourcing debate necessarily positioned these two polar opposites against each other because it’s a simpler way for marketers and salespeople to argue against insourcing.

More progressive MSP leaders, such as Randstad Sourceright’s Teresa Creech, agree that the many shades of gray between these two poles of pure insourcing and pure outsourcing present several benefits that mitigate against the “cons” on either side of the page. She and I delivered a Staffing Industry Anaylsts webinar on this topic last month (click here for a replay and presentation slides). Rather than choosing sides and arguing our way to the middle, we found ourselves agreeing that a broad set of choices between pure insourcing and pure outsourcing are more likely to match with the specific needs of each organization.

Most people would agree that internal resources are more likely to be more culturally and strategic aligned than external resources. Therefore, when considering who should fill more strategic MSP team positions, it would be a shame that someone might feel forced to forego the possibility of filling that role internally if they find other compelling arguments to outsource others, or even the majority, of operational MSP responsibilities to a specialized provider such as Randstad Sourceright, TAPFIN, KellyOCG, Allegis, Volt Consulting, Adecco MSP, or Bartech (among several others).

Perhaps the gross disparity between internally and externally managed SOW sourcing processes tells this story most convincingly. According to SIA’s 2012 VMS and MSP Supplier Competitive Landscape report, less than half of the $11.5 billion in SOW spend being transacted within VMS applications is being outsourced to MSP suppliers. While this gap no longer appears to be widening, it is no less stark. From my work with buyer organizations it is clear, while temp services management was always ripe for outsourcing due to its less-than-sexy reputation, SOW services have long been procured by strategic sourcing professionals who may work within manual, disjointed processes but are just as likely to be successful with VMS technology as their outsourced counterparts.

Additionally, when considering the many spokes emanating from the fully comprehensive MSP, some MSP responsibilities may already be covered by existing roles in IT, contract management, accounting, operational excellence, legal, and security departments. Trying to undo these realities can be immensely difficult, forestalling the overall MSP transformation effort, and may not yield much benefit – i.e. if it ain’t broke, trying to convince others that it’s broken can lead to credibility loss in your change effort. Accordingly, while orchestrating a less-than-fully-centralized MSP has its obvious drawbacks and inefficiencies, it may be the path of least resistance and a practical short-term necessity.

On the other hand, outsourced MSP suppliers bring a wealth of experience, market intelligence, geographic reach, and flexible resourcing models that most internal resources simply can’t compete with; or, if they can compete, certainly not on all of those points. Organizations like SIA and Brightfield can help close the gap on experience and market intelligence, but only a MSP supplier can offer access to on-demand resources as quickly, seamlessly, and cost effectively as most Global 2000 buyer organizations demand.

Therefore, to answer Hamlet’s famous question, “To Be or Not to Be [the MSP]?” perhaps the best answer is, “both!” As long as the delineation of accountability and responsibility is well clarified, the best of both worlds appears to be possible, if not preferable.