A managed service provider (MSP) is an outsourced third-party company that manages and assumes the responsibility of a defined set of day-to-day management services to its customers. It is a strategic method of improving operations that is commonplace among large corporations as well as small and medium-size businesses, non-profit organizations, and governments.
An MSP can handle myriad operational tasks that, though critical to the success of a business, are non-customer facing. Many organizations make the strategic decision to outsource operational processes, due to the efficiencies and expertise such a program brings.
Because of its complex nature, one of the most popular operational task to outsource is the management of a company's contingent labour procurement process. Doing so allows a business to take advantage of an MSP's capabilities and experience, while avoiding the direct cost of managing the program themselves.
The areas of business that are most often outsourced to a managed service provider include:
- information technology;
- workforce management and contingent workforce management;
- human resources;
- contract management and compliance;
- vendor management;
- procurement and sourcing.
What happens once you engage an MSP?
When engaging a managed service provider, you do not relinquish overall managerial control and responsibility for the operations being outsourced and thus remain accountable. Plus, you get to choose exactly which services you want managed externally, and which ones you’ll keep working on in-house.
The MSP will handle the often time-consuming, complex, repetitive, and arduous work involved. Outsourcing to an MSP is becoming a growing trend in business as more and more companies come to realize the benefits of moving many of their day-to-day operations to a third party expert.
What are the benefits of an MSP?
This trend is growing because companies can reap many rewards. Firstly, an MSP can drive cost savings. Most providers will bill an upfront fee and then an ongoing flat monthly fee, which provides business owners with a predictable monthly cost. Outsourcing managed services also allows business owners to reduce the cost of dedicated personnel working in-house as well as the technology, tools, and other resources needed to handle the tasks.
Secondly, the managed service provider will also have the experience, expertise, and knowledge in the services being provided that will allow for greater accuracy and reduced risks and liabilities, especially since compliance with government regulations and industry standards will be guaranteed.
Third, the MSP will have the best-in-class tools, technology, and resources needed to enhance efficiencies by streamlining processes and procedures. This will also allow for greater visibility and more insight, which in turn will lead to better decision making based on real-time information and analyses.
How does an MSP drive positive change?
Managed service providers start at the beginning. They thoroughly review all of your current processes, whether it’s the way you process payroll, how you store contracts, or how you manage your relationships with your suppliers or contingent workers. They then find opportunities that will maximize savings and reduce spend in your organization while maintaining company efficiencies.
They also find liabilities and challenges within your processes that you might not be aware of, in order to reduce your risk.
Once your systems are analyzed and these opportunities and liabilities are uncovered, MSPs build custom solutions based on your unique business needs. Finally, MSPs then provide on-going maintenance and support of your new processes.
Why should your business use an MSP?
In this highly competitive marketplace we find ourselves in, you need to be able to set your company apart from all of the others by operating as efficiently and cost-effectively as possible. This is one of the most effective ways of staying competitive and succeeding in today’s market.
When you outsource your managed services, you can focus on your core business - such as your direction, strategies, and growth, instead of being bogged down by administrative work. Plus, the enhanced accuracy, reduced liabilities, and cost savings will help you manage your business to the best of your ability.
You and your in-house staff should be focused on the tasks that will drive profits and grow your business, not on the minutia of day-to-day responsibilities. A managed service provider will act as an extension of your team, provide great value, and help your organization succeed.
Want to learn more about the work of MSPs, and how they can help your organization to transform the management of its contingent workforce? Contact HCMWorks today. Our team of workforce experts would love to answer any questions that you may have.