MSP or VMS: Which Comes First, the Chicken or the Egg?

Whether you are deciding on a first-time Vendor Management Systems (VMS) and Managed Service Providers (MSP), or you’re replacing your current providers, the question often arises: Which should come first: Prioritizing the selection of a VMS or engaging an MSP?

Consider a scenario where an organization makes  a VMS purchase without consulting all internal stakeholders or engaging an MSP. This can lead to unforeseen complications, underscoring the critical need for alignment among various departments and commitment to the program.

Comprehensive consultation is key before making strategic decisions. Whether HR, IT, or another department initiates the VMS selection process, collaboration with numerous other stakeholders including Finance, Procurement, and Hiring Managers is essential. This ensures a holistic understanding of requirements and ensures that each group has their needs met in the tool.

Engaging diverse perspectives is crucial. With VMS implementation spanning multiple business units, input from various stakeholders minimizes the risk of overlooking vital considerations.

MSP as Business Consultant

This is where the most significant advantage of involving an MSP early in the process is important. One of the greatest benefits of an MSP lies in their ability to provide your organization with best practices and guidance – this includes providing you with one or two choices for VMS selection and the reasons why they are best-suited for your business needs.

A truly consultative MSP doesn’t just offer pre-packaged solutions; they take the time to understand the unique needs and challenges of your business, and then base their recommendation on those factors based on their deep industry knowledge. By conducting a thorough assessment, your Managed Service Provider can recommend the Vendor Management System solution that best aligns with your specific requirements and the optimal configuration to ensure that the VMS enables the ways you want to conduct business. For example, you may have requirements for robust reporting and analytics that are best suited to certain VMS’s.

Moreover, tapping into MSP expertise can significantly enhance decision-making. MSPs bring insights into different VMS systems, aiding in informed decision-making during the Request for Proposal (RFP) process. Their understanding of system nuances and potential challenges streamlines selection and mitigates risks. VMS systems have evolved to support all worker categories and integrate with your entire workforce ecosystem.  The expertise of the MSP will eliminate potentially costly mistakes that may come with the added system complexity.

Furthermore, fostering partnerships between MSP and VMS vendors can yield strategic advantages. Leveraging the MSP’s relationship with vendors enables organizations to negotiate favorable terms, address implementation challenges, and ensure a smoother transition.

Navigating the VMS-MSP conundrum requires strategic foresight and stakeholder alignment. By prioritizing consultation, embracing diverse perspectives, and leveraging MSP expertise, organizations can ensure they’ve selected the best VMS solution for the needs of each of their stakeholder groups.

As businesses embark on their VMS-MSP journey, these insights serve as a guide, illuminating the path forward in an ever-evolving landscape of digital transformation. While we may never know which came first in the debate of the chicken or the egg, we do know that with the MSP-VMS relationship, the successful management of a non-employee workforce requires both partners working together to deliver results. And with a consultative MSP by your side, you can confidently select the VMS solution that will deliver on your requirements.

Interested in learning more about this topic? Go here to listen to insights from an industry insider who shares their choices and what they would do differently when faced with a similar situation.  

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