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Managed Services Provider (MSP)

Before we start the discussion of Managed Services Providers, we need to understand what is managed services provider. 
The managed services provider is an organization that delivers services such as network, security, and infrastructure, application via ongoing and regular support, and active administration on customer’s premises in their data center or a third-party data center. To add one more thing to the Managed Services Provider definition, this process is carried out to improve the operations of the associated firm. The services under this umbrella are either used infrequently or are costly to train the current employees or hire. Another question you may ask is how to identify the best-managed service provider. The most distinguishing factor is the best-managed services providers always consult the organization they provide the services. Currently, a large number of companies are providing MSP to a wide range of industries that help them either save a significant amount of money, save time, mitigate risk, increase quality, provide clear visibility of the workforce or all of these.MSP companies generally use a Vendor Management System (VMS) as a tool that provides transparency and efficiency, along with detailed metrics related to the contingent and contract workforce to the software user. This model of providing services has proven itself at a significant pedestal, especially the Fortune 500 companies, and is all set to become very common in the government sector too. According to the Analysts of the Staffing Industry, the longer period the global economy faces uncertainty, the demand for MSP and VMS would increase significantly and inevitably. International organizations face a challenge to develop programs that suit multiple countries.
For instance, as a company outsources the support of its products to a Managed Services Provider Company, it may combine additional services, i.e., a VMS. This addition would become more valuable to the end user.

Why Outsource Your MSP?

The reasons for various organizations to implement an MSP or a third-party administrator are as follows:

  1. Lack of control or compliance over contingent labor management. This includes no auditing, usage of supplies without adequate agreements, rogue spending, etc.
  2. The processes and procedures of labor are inefficient and non-standard.
  3. Labor or supplier performance and quality issues.
  4. Work and Co-employment misclassification risk concerns.
  5. Missed savings opportunities in:
    1. insufficient market research and benchmarking.
    2. lack of competition.
    3. invoice consolidation.
    4. unknown industry best practices like cost savings, risk mitigation, business intelligence, and analytics, inclusive of process.
    5. co-employment and worker misclassification risk concerns.
  6. The management does not know who is onsite, what they are doing, for how much time, or the cost.

How does an MSP Add Value?

Qualified managed services provider companies offer solutions to provide pertinent business information to make the best possible decisions, create efficiencies, identify significant hard and soft dollar cost savings, offer research substantiating the latest trends, and help in improving the overall quality and value of your workforce through the following ways:

  1. Best workflow automation tools.
  2. responsible supplier management services for improving vendor performance.
  3. The process is streamlined to create efficiencies, reduce cycle time, and improve worker quality.
  4. Cost management services to minimize direct and indirect costs.
  5. Mentoring the supplier and developing them.
  6. To drive the program performance, they have dedicated and experienced management.
  7. To ensure contract, program, and policy compliance, regular auditing and oversight are conducted.
  8. Various risks, like operational, legal, and financial, are managed through policy development and implementation.
  9. Robust reporting capabilities that enable customers to track and monitor contingent staffing spend, industry-leading, and assist in the decision-making process.
  10. Implementation, training, and change in the management services.

What are the Benefits of a Third Party MSP Versus a Self-Managed Solution?


Third-Party MSP



  • A dedicated specialized onsite team
  • Provides shared  office support for reports, benchmarking, analytics, real-time process, supplier audits, rate analysis, supplier management, and other management functions

Needs a full-time, internal team that can fulfill the complex and diverse tasks of global contingent workforce management.


Complete implementation of MSP and VMS. This leverages a proven toolbox of lessons learned and best practices.

  • Creates dependency on VMS for solution implementation and configuration.
  • Lacks optimization of contingent workforce management.

Vendor Management Systems

  • Has superior knowledge of VMS Tools
  • Time-tested methodologies for VMS implementation and configuration
  • Knowledge of how to generate and analyze data that produces meaningful results.
  • It is dependent on the VMS Helpdesk and internal staff for guidance
  • Does not have the critical tool knowledge to use the system and address business objectives.

Program Management

Has expertise with a huge client base. This allows continuous process improvements and also helps in introducing the best-emerging practices.

  • Talent attrition creates a lot of program disruption
  • It is highly reliant on the retention of program Subject Matter Experts.

Ongoing Value

It evolves continuously and improves contingent workforce management processes and technology.

Majorly, it is stagnant or severely lags behind the MSP lead programs

What You Should Look For In An MSP?

Whenever you search for a strong MSP, you should always look for the ability to achieve an impressive Return on investment and a commonality of workforce and management solutions through the method of skillfully managing human capital resources and also integrating smart and efficiency-generating technologies.

Below is a list of some important factors of the MSP model that can be offered to your organization.

  • Mitigation of risk concerns and co-employment and classifying the workers correctly.
  • Managing the onsite labor
  • Delegating the supplier or labor performance and various quality issues.
  • The opportunity to save:
    • The competition to decrease the prices.
    • Standardizing the rates.
    • Contingent labor processes and procedures are standardized.
    • Consistent budgeting and better service levels.
    • Benchmarking, reporting, and robust market research.
    • Implementation of the best practices of the industry like business intelligence, analytics, process, cost savings, and risk mitigation.
    • Consolidation of the invoice.
  • Compliance with contingent labor management like rogue speed, use of suppliers without adequate agreements, auditing, etc.

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