Innovation typically begins at the highest levels of industry, where deep-pocketed companies (with the budgets to support experimental projects) support early adoption of emerging tech and process. This was true of the rise of the Managed Services Program or MSP for workforce management in the 1990s. Once proven by the largest players, the MSP concept and other business process outsourcing (BPO) activities percolated down through the mid-market to the small business market, becoming a staple of contemporary workforce management practices. Following more recent advances in tech and evolution of business environs, the time-tested MSP is now undergoing significant change, again instigated by big organizations within the Fortune 500. So much so that a recent report showed that over 90% of Fortune 500 companies have multiyear Managed Services contracts. Read on to learn how to use contemporary MSPs like the F500.
First, what’s changed with respect to how MSPs are engaged and how they deliver value? One large factor is the fierce competition in the MSP and broader BPO market as service providers with global operations compete for a finite pool of customers. Adding to the disruption is the ceaseless march of technological advancement. Specifically, the rise of artificial intelligence (AI), robotic process automation (RPA) and Big Data practices driving powerful business intelligence activity. These technologies are reshaping not only demand for human capital, but also the types of labor that are in highest demand. Next, consider the evolution of worker types and work arrangements, with the growth of contract and project work as well as an increased emphasis on remote work, and it becomes clear that the ways MSP have served customers before is no longer a fit for what is needed by these customers today.
These changes have driven market/industry leaders in the Fortune 500 to modify their BPO strategies to embrace the new, disruptive trends, forcing wholesale renegotiations of the contracts they have with their MSP and other BPO providers. Instead of relying on their MSP partners to deliver traditional MSP services, today’s companies are seeking more efficient use cases for engaging MSPs – ones that focus more on strategic partnerships than on simple outsourcing of workforce management. To help build these strategic partnerships in ways that address the changing dynamics of the workforce and the increased use of AI, RPA and other new tech, F500 companies are taking the following steps.
Changing how MSPs are engaged, savvy organizations are focusing more on strategies to improve end-to-end processes that focus more on the outcome than on the transactions themselves. This requires greater emphasis on coordinating efforts across the entire organization.
Putting customer satisfaction first, leading organizations are focusing on the outcomes of their MSP relationships instead of just looking at cost savings as the lode star for MSP usage. They’re using digital infrastructure to improve the customer experience, and this means increasing collaboration with their MSP providers to alter the strategy.
Collaborating and co-investing with outsourced service providers, as an emerging practice involves working more closely with one’s MSP vendor to improve innovation, product development and partnerships. Think, shared centers of excellence, embedded teams and other similar joint ventures. Doing this helps push the shared services boundaries and fosters higher levels of process automation.
Pushing good governance to the forefront, means setting parameters for accountability and clearly defined responsibilities on both the part of the provider and the customer. Strong, transparent governance models with proper issue escalation channels help ensure the most effective and mutually beneficial relationship between both parties and drives superior results.
Want more insight into how to reimagine your MSP and other workforce management BPO service practices? Read more on our MSP service page or check out more blogs related to MSP. or Talk to your nextSource representative today for much more on this important topic.