Posted on Wed, May 18, 2011 @ 11:10 AM
by Peter Parks, Director of Product Strategy
In a recent blog post, MSP or Self-Managed Program: 5 Factors to Evaluate (Part 1), I provided two factors to examine when deciding to go with an MSP or self-managed program. Here are three more factors to consider:
Diversity of Requirements
How many different types of services are you procuring? A manufacturing facility with a single large location including both production and administrative may be able to function very well managing a few key suppliers. But a company with many operating units, even if relatively centralized, and a wide diversity of skill requirements (LI, admin, IT, off-shore, 1099, payroll, marketing, SOW, etc.) starts to look like an MSP candidate. Maintaining the right mix of suppliers who offer all of the skills and services you require to run your business can be daunting and requires constant attention and experience in the evolving market.
Experience
How have you traditionally managed your services suppliers? Have you maintained a limited list of suppliers, are your contracts standardized, are your end users compliant and satisfied with the performance of your program? If you can honestly answer yes to these questions, maybe the introduction of VMS technology is sufficient to realize savings and improvement. If you are not comfortable with the answers to these questions then outside help is likely necessary.
Culture
Is your company one that fosters a high degree of self service, bottom-up initiative and individual creativity (often referred to in our world as “the Wild Wild West”), or is yours an organization that has well defined guidelines and enforced reporting structures? Although an MSP may be frustrated in the Wild West, so might you if you were to attempt a self-managed program. While the MSP might not be able to achieve all of the expected savings and improvements in a more creative environment, there is value in having someone to take the brunt of the program management. In more conservative organizations there may be a greater chance for true success in self-management.
The benefits offered by MSPs are well documented and proven. But, in order to realize those benefits you must fit a certain profile. We have some large customers who very successfully self-manage. Although they have over $100 million in annual spend, they are centralized, experienced and run a program as if they were an MSP. A large, categorically diverse, dispersed program would very likely benefit from MSP involvement, but you should never make the assumption – examine your program and create your own assessment. If you choose to go with an MSP, you should ask more questions, like should the MSP also be a supplier, or do we have one global MSP or do we need the MSP involved in all of our services procurement? Do a thorough and honest assessment because this decision can make or break your program.