As Managed Service Providers (MSPs) have driven\u202fadoption in large companies, it has become more difficult to go around them or ignore their reality. Staffing firms need to weigh the pros and cons to determine if partnering with MSPs aligns with their business goals and capabilities.<\/p>\n
Our panel of industry experts recently shared their approach to successfully working with MSPs, tackling MSP challenges, keeping up with MSP industry trends, and finding opportunities:<\/p>\n
Over the years, many firms have tried to bypass MSPs. But as the use of MSPs has grown in large, enterprise customers, staffing firms focused on that market segment have had to adjust.\u202fSo how do you know if it\u2019s right for your business?\u202f\u201cA well executed MSP strategy can be tremendous in its impact on the\u202fgrowth of your company and a poorly executed plan\u202fcan actually be devastating to your business,\u201d stated Kelly Boykin, Founder of Growth Curve.<\/p>\n
Let\u2019s first look at the benefits that come with MSPs:<\/p>\n
Volume and Stability:<\/strong> Managed Service Providers enable staffing firms to work with large clients \u2013 including many Fortune 1000 companies. This offers stability even in uncertain times like during COVID-19. Kip Wright, Chairman of INSPYR Solutions highlights that during economic downturns, \u201cMSP business can be more stable, providing a cushion for staffing firms.\u201d<\/p>\n Cost Efficiency:<\/strong> The cost to acquire an order is lower due to scale, with flexible commission structures and the use of offshore\/nearshore resources can have a positive impact on profitability. Manish Senta, Managing Director of Tekwissen Group, notes, \u201cPredictability was key for us… if we can build predictability in our model, we can sell the talent to more than one program.\u201d<\/p>\n Expansion Opportunities:<\/strong> MSPs enable growth into new programs, regions, and categories. This enhances opportunities for engineering staffing<\/a> and IT staffing firms.<\/p>\n Scalability:<\/strong> MSP staffing solutions help in creating repeatable processes and using technology to grow efficiently.<\/p>\n Predictability:<\/strong> Data and insights make it easier to foresee business needs and manage pipelines. \u201cYou can create a competitive advantage with this ability to scale,\u201d Wright adds.<\/p>\n Risk Mitigation:<\/strong> Wright emphasizes, \u201cOrders are guaranteed to be budgeted and real, so you\u2019re not extending credit to companies that may not be able to pay you.\u201d<\/p>\n There are some challenges to MSPs as well:<\/p>\n Lower Margins:<\/strong> The profitability per order is reduced due to lower mark-ups and aggressive rate cards, and is further impacted by various fees and discounts. Wright notes, \u201cIt\u2019s important to look beyond gross profit to understand true profitability.\u201d<\/p>\n Complex Contracts<\/strong>: Detailed contracts with numerous provisions and compliance requirements can be difficult to manage. \u201cNavigating these complex contracts requires significant legal understanding,\u201d Senta mentions.<\/p>\n Loss of Control:<\/strong> Staffing firms often lose some control over the hiring process and end-customer relationships. Wright points out, \u201cYou don\u2019t have the same influence on the hiring manager. In some cases, you can\u2019t talk to them at all.\u201d<\/p>\n Administrative Burden:<\/strong> Managing MSP account management requirements needs dedicated teams and resources, which can put a strain on other parts of the business. \u201cThere can be an administrative burden that goes along with it,\u201d Wright shares.<\/p>\n Cash Flow Issues:<\/strong> The extended payment cycles in MSP programs can affect cash flow. It can be harder for small staffing suppliers.<\/p>\n So, how do you make the most out of MSPs? Here\u2019s what the experts say:<\/p>\n Leadership Buy-In:<\/strong> Top leadership’s commitment to the MSP strategy is essential. Clear internal communication about the goals and benefits of working with managed service providers fosters alignment and support throughout the organization. Wright emphasizes, \u201cProper buy-in from top leadership is essential for success.\u201d<\/p>\n Understanding Programs:<\/strong> Evaluate programs using metrics like fill rates and submission metrics to identify strong and weak programs.<\/p>\n Data-Driven Decisions:<\/strong> Use data to monitor performance and implement a reverse scorecard approach to evaluate MSP programs. This helps identify areas for improvement and promotes better collaboration with MSP leaders.<\/p>\n Dedicated Teams:<\/strong> It’s important to have separate sales and delivery structures for MSP programs. Wright notes, \u201cOperating these programs requires a very different mindset and that includes a separate sales and delivery structure.\u201d\u00a0 By separating the business models, staffing firms can more effectively grow their MSP programs without impacting the growth of their current business. This approach helps in managing them effectively.<\/p>\n Proper Training:<\/strong> Train your staff to understand MSP structures and goals. They should see MSPs as partners, not adversaries. This includes learning about the unique needs and expectations of MSP staffing solutions. Senta emphasizes that \u201cflawless execution is what makes money in this business.\u201d<\/p>\n Decision Discipline:<\/strong> Identify and exit programs that don’t fit the business model early. Focus on successful ones. Senta advises, \u201cWhen someone is giving you a chance, please be very careful which opportunity you take.\u201d<\/p>\n Effective management of data and building strong relationships are very important components for success in MSP programs. Here\u2019s what you need to do:<\/p>\n Establishing trust and credibility with Managed Service Provider leaders is essential. How can this be done? By understanding their needs and consistently keeping promises, firms can build strong connections.<\/p>\n Additionally, differentiation is key. With 25,000 staffing firms in North America, making a strong first impression and consistently meeting expectations are key to standing out.<\/p>\n Effective use of data is vital for MSP performance monitoring and continuous improvement.\u00a0 Wright suggests using the 1% rule to achieve significant progress over time by making steady, incremental improvements.<\/p>\n Another important aspect is reverse score-carding. This involves evaluating MSP programs by providing feedback and insights to MSP leaders. This can promote better collaboration.<\/p>\n Making informed strategic decisions is vital if you want to align business models with MSP programs to generate long-term success.\u202fSo how do you do that?\u202f\u202fFirst off, develop a business model specifically for MSP programs. Focus on optimizing speed and quality.<\/p>\n Also, make strategic choices to leave programs that don’t benefit the business. Boykin emphasizes this point, \u201cIdentifying the programs you can\u2019t be successful in and exiting them quickly is a positive thing for everyone, and it will allow you to focus and drive success in the rest of your programs.\u201d<\/p>\n Leaving programs early that don’t match the company’s goals allows a focus on more successful ventures. Senta notes, \u201cThere is nothing wrong with exiting a program that does not serve you. It shows good business acumen\u202fthat you understand the business and can step back when it is not working out.\u201d<\/p>\n Follow a structured approach when entering MSP programs. This includes a thorough analysis of current customers and profitability.<\/p>\n Wright says that “organizations need to go through a structured approach before they get into the nuances of how they’re going to operate this.”<\/p>\n Understand the strategic fit of MSP programs and make informed decisions about which ones to join \u2013 particularly in engineering staffing and IT staffing sectors.<\/p>\n Leverage available resources and experts for strategic planning for MSPs and execution. Engaging with industry experts, like those from TechServe Alliance, can offer valuable insights and guidance.<\/p>\n Wright highlights the importance of using resources: “There are experts in the market like Kelly Boykin, whose business is to help companies step back strategically, look at this, go through the process, analyze the current customer base, and then go into the process of really saying, how am I going to build and execute on this?”<\/p>\n Moving through the MSP landscape takes strategic planning, data-driven choices, and strong relationships.<\/p>\n For continuous growth, participate in industry events and seek expert advice (there’s always something new to learn!). Use these strategies to thrive in the MSP space and achieve long-term growth and stability in recruiting.<\/p>\n TechServe Alliance members can\u00a0view the full webinar here<\/a>. Not a member yet?\u00a0Join us<\/a>\u00a0to attend webinars like this along with more great content and benefits today!<\/p>\n","protected":false},"excerpt":{"rendered":" As Managed Service Providers (MSPs) have driven\u202fadoption in large companies, it has become more difficult to go around them or ignore their reality. Staffing firms need to weigh the pros […]<\/p>\n","protected":false},"author":3391,"featured_media":20556,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_company_domain":"","_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":""},"categories":[1],"tags":[],"topics":[229],"member-content":[],"class_list":["post-20555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","topics-mergers-acquisitions"],"acf":[],"_links":{"self":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts\/20555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/users\/3391"}],"replies":[{"embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/comments?post=20555"}],"version-history":[{"count":2,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts\/20555\/revisions"}],"predecessor-version":[{"id":64436,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/posts\/20555\/revisions\/64436"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/media\/20556"}],"wp:attachment":[{"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/media?parent=20555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/categories?post=20555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/tags?post=20555"},{"taxonomy":"topics","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/topics?post=20555"},{"taxonomy":"member-content","embeddable":true,"href":"https:\/\/techservealliance.org\/wp-json\/wp\/v2\/member-content?post=20555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Operational Benefits<\/h3>\n
Financial and Operational Cons of MSPs<\/h2>\n
Financial Challenges<\/h3>\n
Operational Challenges<\/h3>\n
Strategies for Success in MSP Programs<\/h2>\n
Strategic Planning<\/h3>\n
Operational Execution<\/h3>\n
Exiting Unsuccessful Programs<\/h3>\n
Leveraging Data and Relationships<\/h2>\n
Build Relationships<\/h3>\n
Utilize Data Effectively<\/h3>\n
Strategic Decision Making<\/h3>\n
The Experts\u2019 Advice for Staffing Firms<\/h2>\n
1. Structured Approach\u202f<\/strong><\/h3>\n
2. Utilize Resources\u202f<\/strong><\/h3>\n
Future Success in MSP Staffing Solutions<\/h3>\n