Building The Case for MSP/VMS: What You Need to Do
Controlling and managing a large-scale contingent labor force can be a highly taxing job. Doing away with old processes to switch to a MSP/VMS technology can pay incredible dividends, but as HR and procurement leaders seek solutions for this task, they can be overwhelmed with the amount of content out there. Not only can doing the research be difficult, but convincing executive leadership increase anxiety. However, when done with the right partner—in the right way—huge returns make the effort worthwhile.
Where to begin?
Analyze Current State
CFOs love numbers. Prepare a deep analysis addressing not only current-state performance indicators, but pain points and inefficiencies solved by an MSP/VMS deployment. Case studies and other content that shows similar scenarios working for other customers in similar scenarios can also prove beneficial.
Set Your KPI and ROI Requirements
Organizations need to set their KPI and their ROI expectations in the discovery process. There are different models that can affect the way your program performs, and picking the one that is customized toward your organization’s overall goals is critical. Knowing what your requirements are will help you make a sound selection.
There are many elements within an MSP/VMS that can affect your ROI, but some of the most important to focus on are implementation, time-to-fill, worker quality, hard savings, resource allocation and other benefits. Once established, organizations can address other benchmarks to address. Note that buyers achieve a median of 10% savings in their contingent workforce spend during year one.
One person cannot drive the implementation of a MSP/VMS technology as a solo mission. It will take the village to raise this child into a cost savings champion. To draw support and sponsors, explain the benefits for internal hiring managers, HR, legal, IT, and the C-suite. Keep in mind that the primary motivator for MSP/VMS programs is the cost savings that most companies achieve while undertaking the shift from internal management to a centralized MSP/VMS solution.
Understand Your Risks
Managing large volumes of contingent labor can increase the rate at which errors occur. At the rate that specialized workers are used, organizations will become more susceptible to the risks involved in using contingent labor. As contingent workforces have grown, a common trend has been that companies employing larger amounts of contingent workers offload these burdens onto already burdened workers who cannot handle the additional workload.
Without a successful program, organizations can fall prey to unrealized savings, reduced productivity, and a myriad of different legal exposures that can tack on hefty IRS fines.
Making Your Pitch
Hiring Managers: Explain the streamlined processes and easy-to-use interfaces that will help them not only manage their workers, but also get better performers at reduced costs.
IT: IT pros are going to look for security and integrated technologies. Look for a VMS deployment that is fully-customizable to your firm and vetted to ensure that your processes and information are secure.
Legal: Regulatory compliance and risk aversion should be paramount. It can be dizzying to manage and account for every contractor or SOW worker for internal teams. By engaging an MSP with this task, legal teams have a little less to worry about.
Finance: The financial benefits of an MSP/VMS are probably the most important thing to your organization. Calculate the potential cost savings of consolidating vendors into one centralized hub. MSP/VMS providers ensure that rates are standardized; billing and invoicing are consistent; and processes are seamlessly integrated.
C-Suite: C-level executives care about all of the above, but they also care about business intelligence that arms them with analytical tools to make swift and intelligent decisions. A MSP/VMS is a real-time, data-driven tool, and your MSP partner will provide broader-reaching information on industry trends and emerging regulations.