Launching a First-Generation MSP Successfully, Part 1: Selecting an MSP Partner

With the ever-changing employment landscape, where an alternative workforce is quickly moving into the mainstream, it has become critical for organizations to take a strategic approach in managing their various sources of talent. This, in part, is contributing to the continued growth and adoption of managed service provider (MSP) programs.  According to SIA, adoption of MSPs grew to more than 60% in 2019 from just over 40% 10 years prior. Further, 68% of reported contracts were what we call first-generation MSPs: They were awarded by clients with no previous MSP model in place.

There are many drivers for organizations to launch an MSP, in addition to the need for visibility into their workforce, including:

  • Cost savings and insights on labor spend
  • Robust workforce compliance and risk mitigation
  • Access to top talent with an improved time to fill and candidate quality
  • Supply chain efficiency
  • Data management and predictive analytics
  • Flexibility and scalability
  • Innovation and access to technology

Why you should have an MSP may be clear, but how to launch a program, especially a first-generation MSP, can be overwhelming. In this three-part series, we’ll examine how to launch a first-generation program, from selecting an MSP partner, defining program expectations, assembling your team and managing your program.

Here are some of the factors you need to know to get started:

1. Select the right MSP partner. Finding the right MSP partner can be a challenging and lengthy process involving managing an RFP (which isn’t always needed or ideal), sitting through sales presentations or working with often costly consulting firms. However, selecting the right partner is critical to the success for your program. To be confident in selecting and solidifying your MSP partner, you should consider the following:

  • Meet leadership and sponsors from the MSP. They will become your trusted advisors and should bring confidence through their knowledge and expertise.
  • Consider the experience and how the MSP partner fits your specific needs:
    • What’s their experience in launching a first-generation MSP?
    • What do their implementation and change management planning and resources look like?
    • What is their experience in your industry?
    • Do they manage programs of your size and scope?
    • What VMS technologies do they have experience with? And on that note…

2. Select the right VMS. There are many different vendor management system choices, and each tool has different capabilities and strengths. If possible, selecting your MSP first will enable you to leverage the provider’s experience and knowledge to select the right VMS.

Most buyers heed this advice, with 70% of all MSPs owning the contract for the VMS. The other 30% of the time, the VMS is procured and contracted directly with the VMS provider. This is important because there are some MSPs that exclusively use their own proprietary VMS system, while others have strategic alignments or agnostically work with several providers who consult to understand an organization’s unique needs.

The VMS technology you choose should be based on your needs and the current and future scope of the program. One tool might have a better option for integrations for your current systems, while others may be preferable if statement of work (SOW) management is a priority and you have planned expansions to other regions and currencies that will need to be managed.

By selecting your MSP partner first, they should help you manage decision points, negotiate terms and find additional cost savings in implementation planning.

PREMIUM CONTENT: Global MSP provider landscape

3. Define your drivers. What is it that your organization is looking to accomplish with your MSP program? It is important to clearly define these desired outcomes with your MSP partner.

You can start by ranking, in order of importance, which drivers from the list above are most important to your organization. These goals should become your – and your MSP’s –guiding light for the launch of the program. If, for instance, your top goals are cost savings and risk mitigation, knowing this will help you navigate a situation with a potential rogue leader or potential non-compliant supplier.

There will be some concessions made through the process, but it is important to define and work towards these predetermined goals and drivers throughout the engagement.

In part two, we’ll examine how to use data to manage your program, the importance of developing a road map and setting the scope of your program, and assembling your project team.

Melissa Gaitten

Melissa Gaitten
Melissa Gaitten is VP, integrated MSP at Randstad Sourceright.

Melissa Gaitten

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