Key Changes to MSP Programs in the Last 10 Years

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In this interview, Louise Niven, Global Engagement Lead for Tapfin Process Excellence, discusses some of the changes she’s seen take place within MSPs over the past 10 years and talks about how to get the best out of an MSP across multiple countries and regions.

1. What changes have you seen over the past ten years in the MSP business?

Louise: Knowledge about MSP has changed hugely not just with clients, contractors and suppliers but also within our own organization. An MSP is much more likely to be global or regional now whereas they were primarily country-wide 10 years ago. The change has mostly been driven by companies looking for global visibility to enable spend management.
One of the biggest changes in the market is technology, the advent and growth of global Vendor Management Systems (VMS) has been helping to drive the growth of MSP globally by offering global visibility of the contingent workforce and streamlining the invoicing process.

2. Why do you think MSPs have transitioned to be regional or global in scope?

Louise: Cost is one issue. In the past, most global companies functioned in country-specific areas. The drive to create more cost savings has led most organizations to look at their organization as a whole rather than on a country or business unit basis. To enable cost savings and to manage finances, you need to have visibility. Now, our clients are aware of the cost savings of integrating country systems, MSPs can help organizations realize these cost gains across countries or regions.

Change management is another benefit MSP programs bring to organizations looking to expand globally. What we have seen is that many of our clients find it difficult to implement and coordinate the change management that is required to roll out a global MSP program. Additionally, other clients are relying more on MSPs and what they can bring to their business. Some of our US clients are in a second, third or even fourth generation of MSP supplier, and they have learnt that getting the right mix of change management and knowledge from an MSP provider is key. A good MSP provider not only brings cost savings but provides a global platform for best practice, streamlining processes and giving global visibility that leads to sustainable cost effective management of their contingent workers across the globe.

3. What are clients now looking for in MSPs that they weren’t before? Are there any new interests?

Louise: A global VMS is now a prerequisite. While 10 years ago, we would use systems local to a particular region or country or we would look in-house to direct source or a local time-sheet system and report via Excel. Since then, we have seen the emergence of three major global players in VMS: Beeline, Fieldglass and IQNavigator. These three major VMS providers are all American and unfortunately are still difficult to use in the EMEA and APAC regions due to differences in worker and pay regulations. Therefore, a very specific issue that MSP providers face now is in ensuring that the client understands the limitations of globally deploying VMS technology and the importance of getting implementation and configuration right the first time.

Companies in the US are still somewhat ahead of the curve in the world of MSP, and many clients there are looking for the evolution of the simple MSP to something more integrated into their businesses. They are looking to build on the platform of a stable MSP to deliver expertise in forecasting and managing future requirements. In the future, working with procurement and HR as part of a team to plan and manage the contingent workforce as a whole to ensure that they are continually ready to get the best skill sets at the best price consistently and easily will be key.

4. Can you highlight some of the issues faced when implementing and using VMS on a global basis?

Louise: Some of the limitations of the big three VMS have historically been around rates and categorization of labor. Germany and France for example have labor regulations and data privacy requirements that are not accommodated as standard in the majority of VMS. As a result, it can be more of a challenge for the MSP to implement the systems in these countries.

When we look at the APAC region, again what comes standard in the VMS doesn’t cover some of the requirements for employers in the region. APAC has a large number of monthly rate contractors where as the standard in most VMS is an hourly or daily rate.
Getting the set up of the VMS correct at the beginning of the process is key to ensuring that we can use the system effectively to give the client the visibility they require. While the VMS is good for a majority of companies and situations, organizations and MSPs need to be careful to navigate the compliance related needs of each organization within each country and each system to make sure the right processes are set up from the beginning.

5. Have there been any changes to VMS as a result of regional and global interest?

Louise: VMS providers looking to join the global MSP market have been working closely with clients and MSP providers to globalize their systems. There have been a number of systems who have managed to work out these issues. Unfortunately, there is a cost element to any development, and most VMS providers will want any global changes to be paid for by a client. Often MSPs can work with the basic reporting systems from the beginning, but there isn’t a lot of flexibility once they’ve been implemented. This means that collaboration between VMS, MSP, and the client organization is necessary to ensure the right processes from the start, retro-fitting an existing system can be costly, complex and time consuming.

6. What are other areas that you think are vital to the success of a global MSP implementation?

Louise: I think the most vital area is the change management portion of an MSP implementation. Change management is not just sending a large, complex, English-language only email to country or business leaders within the organization. Many failed MSP programs are a result of organizations failing to understand what they need to bring to the table in order to make their MSP investment work and ensure cost savings.

Often we see a disconnect between an ostensibly “global” headquarters based in one country and the business in other countries. Changes are often badly communicated to the regions and countries which can create push back from individual business areas or country management when the MSP comes to implement changes. A global MSP will be very unlikely to make the required cost savings unless the client has mandated the change within their own organization.

Organizations need to work with their MSP to explain the benefits of an MSP for the country and business as a whole, including how it will look, system and supplier management benefits, timeframes, and a route to feedback and ask questions. If an organization doesn’t mandate the program, communicate the changes effectively, or invest the money into change management and selling the program internally, they often won’t realize the cost savings they were looking for in the first place.

Over the past 14 years, Louise Niven has worked within the global implementation and process excellence areas of ManpowerGroup. She is currently the Global Engagement Lead for Tapfin Process Excellence.