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The Future of the MSP Model Hinges on Future of Work Innovation

Earlier this year, I wrote a feature on the next generation of Managed Service Providers that focused on how these solutions have evolved over the past several years to meet the dynamic needs of recruitment, contingent workforce, and talent acquisition programs across the globe.

Ordinarily, another feature would take, let’s say, a few months before revisiting the scope of MSPs, right? Well, no. There’s so much more to be said about how the MSP model is becoming a nexus of Future of Work innovation.

“Innovation” in and of itself is an interesting concept; given where we are in the greater Future of Work movement, the talent technology industry is awash in new technology, enhanced functionality, fresh approaches to automation, and a convergence of both old- and new-school hiring strategies.

Late last year, Ardent Partners and the Future of Work Exchange had the opportunity to evaluate and analyze the Managed Service Provider arena. The MSP Solution Advisor provider landscape highlighted the strengths and differentiators of 13 global managed services solutions.

One of the major learnings for me, even after nearly two decades in this industry, revolved around the idea of innovation within the MSP world. Many enterprises that leverage the MSP model for extended workforce management do so with “traditional” outcomes in mind: outsourced CW processes, payroll support, staffing supplier management, with a sprinkle of “next-gen” approaches like direct sourcing and skills-based hiring.

However, the Managed Service Provider structure is a foundational solution for talent engagement, workforce management, and Future of Work-era thinking for a major reason: many of these providers are actively blending their robust features with offerings that drive scalability, talent sustainability, and talent intelligence.

Companies mentioned in this article include Magnit, Airswift Resourcing, HireGenics, and KellyOCG.

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Next-Generation Services Procurement: Data-Driven and Optimized for the Future of Work

Ardent Partners and Future of Work Exchange research has long pointed to services procurement (and SOW-based projects and services) as the “next frontier” for contingent workforce management. Comprising upwards of 50%-to-60% (or more!) of the average organization’s total external workforce spending, services procurement remains a prime opportunity for businesses to drive savings, improve visibility, and, most importantly, reshape how work is done.

In a new research study underwritten by Magnit and developed by Ardent Partners and the Future of Work Exchange, we have unveiled some new strategies that can assist enterprises in augmenting services procurement in a Future of Work era:

The large cost savings opportunities that exist for most enterprises in services procurement and the management of SOW-based services make it the next, big frontier for leaders of the extended workforce to tackle. However, a general lack of rigor, combined with issues such as globalization and uncertain economic times, are limiting business leaders’ ability to approach this complex area of spend in a more transformational way.

For enterprises to reimagine the approach to services procurement, they must follow a new model that blends Future of Work accelerants, dynamic data and intelligence, real-time automation, next-generation workforce management technology, and a willingness to adapt and adopt agile solutions.

This Ardent Partners and Future of Work Exchange research report will discuss how businesses can transform their services procurement and SOW (“Statement of Work”) management programs by (1) modifying buying behavior with advanced automation, controls, and data, and (2) developing an impactful initiative that leverages expert services and solutions.

Click here to download the new research study.

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Services Procurement and the Future of Work: A Conversation with Paul Vincent, Global Head of Services Procurement at Randstad Sourceright

Last week, Randstad Sourceright announced the appointment of Paul Vincent as its Global Head of Services Procurement. In this Future of Work Exchange feature, Paul joins us to talk about how he views the current SOW management landscape, how this exciting topic fits into the greater Future of Work movement, and his new responsibilities at Randstad.

Christopher J. Dwyer: Hi Paul, it is great to chat with you once again, and congratulations on your new role. Pandemic aside, we’ve definitely seen some changes in the services procurement landscape over the past couple of years. Curious to hear your thoughts on these changes and how you feel MSPs can effectively tackle these challenges.

Paul Vincent:  It’s good to catch up with you again, too, Chris, and let me start by commending you on the launch of the Future of Work Exchange. The site looks really smart, and I am sure it will become a valued resource for the talent industry.

The services procurement marketplace has unquestionably become more liberated during the past couple of years. Every MSP now seems to be selling some kind of SOW solution and buying organizations are clearly becoming more receptive to a proposal for help. VMS providers are building more tailored functionality into their platforms and there is a growing array of complementary digital tools which can further strengthen an MSP’s product offering if positioned correctly.

So, we are definitely entering a period where SOW-based spend is going to be increasingly supported by workforce solutions providers in some way. The $64M question is going to be: what way is the best way?

This is where I think the market gets most interesting. There is still quite a big difference between an MSP who really understands the nuances of the services procurement landscape versus one that fundamentally still treats this part of the workforce as a subset of an organization’s contingent staffing population.

For example, when you see an MSP only talking about classification, compliance, and control, then this is a tell-tale sign that they are not really thinking about how to best serve the people who have the need and budget for the services themselves. These people, who after all are the primary stakeholders for any SOW management solution, need an MSP who can give them speed, simplicity, ready access to the highest-performing and most innovative service providers, and ultimately the best bang for their budgetary buck.

CJD: One of the things I admire about your work in the market all these years is that you have a deep understanding of both the client and service provider sides of SOW and services procurement. What are two or three of the most valuable insights that this experience has given you?

PV:  This is a tough question, Chris, as there are so many insights I could share. However, if you pushed me for my top three then I would probably select these ones.

Firstly, it is important to remember that price and perceived value are very different things. It is a common misconception that users of SOW-based services will want to pay as little as possible and this is a mentality trap that procurement professionals and MSPs can get themselves into. In a staff augmentation world, hiring managers typically don’t want to pay more than the prevailing market rate. In a services procurement world, business users want to pay an appropriate price and as it is their budget, then ultimately, they will need to decide on the price that most aligns with the value they perceive they are going to get from the service provider in return. The role of a good procurement advisor is to help their business stakeholders to identify and then critically evaluate the various commercial options open to them. Then they need to ensure that their stakeholder’s preferred option is properly encapsulated within a well-documented statement of work.

Secondly, whilst the SOW management triangle has three interdependent relationships (i.e., between the business user, centralized procurement, and the service provider), the most crucial relationship is always the one between whoever wants the work done and whoever is going to be doing the work. An effective SOW management solution will facilitate this relationship so that it is as commercially agile as possible. Those procurement functions and MSPs who seek to control this relationship instead will never be sustainably successful.

Finally, I passionately believe that an MSP should be delivering value throughout the entire SOW life cycle. However, in my experience, many MSPs seem to limit their boundary lines to the supplier selection and contracting phases in the process only. I have never understood this – because there is a huge amount of value that can be offered across the project definition, delivery, and evaluation phases, and this value often just gets left on the table.

CJD: These are great insights, Paul, and what resonates with me in particular are your observations about the breadth of the MSP value proposition when it comes to services procurement. So, turning to your new role and an obvious question is: what has attracted you to Randstad Sourceright?

PV:  I am thrilled to be joining Randstad Sourceright and there were two main reasons why I could not let this opportunity pass me by. The first is the hugely ambitious and exciting vision that CEO Mike Smith has set for the organization, and in particular the impact and contribution that he expects services procurement to play. The more Mike talked me through his strategic intent for services procurement, the more I felt this was a journey that I wanted to be part of.

Secondly, I will have a chance to work with a very skilled team. Randstad Sourceright already has a number of sales, operations, and subject matter experts working on SOW-related activities across the organization and further recruitment activity is underway. All of this talent will now be unified globally under my leadership and a joint strategic vision focused on creating measurable business value for our clients. I am especially going to enjoy working with Scott Brewer, who will run our SOW center of excellence. Scott has laid some impressive foundations during the past 18 months and there is a strong platform to grow from.

CJD: This role sounds like the perfect fit for you. What do you see as your key priorities during the first few months?

PV: Well, like in any new role there are going to be many people that I will need to get to know across the organization. But I expect the bulk of my time will be spent getting a really good understanding of our current SOW proposition and what we are delivering across the active client programs. From what I have seen, I think the offering is already pretty compelling, particularly from an analytics point of view, but as I finalize our new team structure and future ways of working, I will get a feel for the areas which might have scope for further development.

CJD: Maybe it’s because I’ve known you for so long, but I have to imagine that you already have some ideas as to how you would like to see RSR’s SOW offering evolve…am I correct?

PV: You’re right, you know me well and I do have some ideas already germinating, but it’s important that I take the time to really understand the current offering first and to gather a range of input from across the organization. What I can tell you is that Mike has set me a very clear objective – which is for Randstad Sourceright to be regarded as the undisputed market leader driving services procurement value for our customers. I am very energized by this goal, and I have every intention of delivering it!

CJD: I am very sure you will, Paul, and we look forward to hearing more from you here on the Future of Work Exchange. Best wishes on your new role at Randstad Sourceright, and thanks again for taking the time so soon after your new appointment.

Connect with Paul on LinkedIn, or visit Randstad Sourceright for more information on their solutions and offerings.

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