When Should You Consider Using A Managed Services Program?

When Should You Consider Using A Managed Services Program?


When considering an outsourced model, such as a managed services program, companies first need to understand how these solutions can drive organizational performance and what their business impacts need to be. It’s critical to start off the process by building a business case that outlines the benefits, cost impact and risk for your executive stakeholders.  This will help them to better align with your vision and level set their expectations.  Let’s take a quick peak at some of the components you will want within your business case.

First, a clear articulation of what is and what is not a managed services program (MSP).  An MPS is a centralized approach in which an outsourced service provider oversees a client’s process for acquiring and managing contingent labor. There needs to be an understanding of how an MSP supports the business and the internal benefits need to be clear.  A few ways in which an outsourced program can aid business leaders’ goals, include cost-, resource-, and time-related benefits that impact a company’s bottom line.

Here are a few more examples:

Cost efficiencies: Every business unit needs to watch its bottom line, so when contingent hiring is poorly controlled and managed anywhere in the organization, it has an impact on financial performance. An MSP enables business leaders to rein in its labor costs by acquiring talent based on negotiated discount rates. If a statement of work employee is involved, an MSP may be able to significantly reduce costs by qualifying a lower-cost professional in place of a consultancy.

Visibility and measurability: Organizations that invest in a vendor management system ensure they have better control and visibility of their contingent workforce spend, but without the technology and process expertise of MSP partners, they won’t be able to fully realize all the benefits. By measuring KPIs around contractor performance, compliance rate, and fill ratio, MSPs help their customers gain greater business insight. They further enhance process visibility and performance by setting up relevant benchmarks, collecting the appropriate analytical data, flagging inefficiencies and gaps, and recommending remedial actions.

Access to talent: MSPs’ dedicated supply chain experts intimately understand the availability of talent from various suppliers in the marketplace. Knowing which suppliers can fill specific job profiles quickly and effectively reduces time to hire and improves tenure and continuity. More importantly, MSPs work closely with clients to rate supplier performance and determine how to rationalize the supply chain and retain the best vendors.

Risk and compliance support:  Increasingly, organizations are at risk for non-compliant hiring practices. With the growing use of independent contractors and other freelancers, the potential for misclassifying employees, for instance, is on the rise. Additionally, companies that expand into new markets and territories may be at risk for failing to identify regulations that apply to their business. MSPs employ robust legal departments and possess thorough knowledge of all applicable labor regulations in the areas in which they operate. Through their expertise and best practices, they can help clients mitigate risks and navigate local mandates, so the business can more quickly execute on their plans.

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