A conversation with workforce management expert Jennifer Muller
Companies working with workforce Managed Services Providers (MSP) expend considerable time and money on IT contract resource acquisition, onboarding, and administration. The current contingent workforce marketplace provides little or no incentive for staffing suppliers to improve service levels. And the low unemployment rate – particularly in IT – makes it harder for MSPs to stay relevant. The MSP Center of Excellence corrects this. We sat down with Jennifer Muller to learn more.
What does Center of Excellence mean in this context?
The term Center of Excellence – COE for short – is typically used in IT to identify a practice area that specializes in advancing a particular discipline. Think Big Data or Business Intelligence, for example. With an MSP COE, IT contingent workforce management is the discipline, with an emphasis on conquering the challenges facing MSP/VMS-based procurement in today’s marketplace. Challenges around resource quality, allocation, and productivity – and around staffing supplier accountability and alignment with client outcomes. In short, the COE is a third-party, outcome-focused, client advocate in the acquisition and management of IT contract resources.
What’s the difference between an MSP and a COE?
The MSP is focused primarily – as it should be – on the transactional aspects of managing contingent labor procurement. For example, supplier administration, process administration, procurement metrics. And finding ways for staffing suppliers to be more efficient. MSP program teams are experts in managing and improving the procurement process – but are rarely subject matter experts in IT (or in other specialized labor categories, for that matter). Their concerns are tactical, not strategic. Managing, improving, and streamlining the administrative process. And while they also work to reduce costs, savings are realized mostly by pressuring suppliers to lower their bill rates.
The COE doesn’t replace the MSP – instead it enhances the work of the MSP by incorporating IT strategy and a focus on aspects of procurement that lead to greater levels of savings for the company. The COE is led by an IT workforce management executive and IT program technical lead who can have greater strategic planning discussions with the client. And who works to help staffing suppliers save cost – not by negotiating lower rates, but by focusing on forecasting, speed to productivity, and project outcomes. The role is more relationship-based than transactional.
So, the COE coexists with a company’s existing MSP?
Yes. The COE complements the MSP. All of the MSP’s transactional components – process, metrics, paperwork, and so on – remain in place. The COE coexists with the MSP by adding strategic and relationship-based value to this process before, during, and after the hire. For example, the MSP typically can’t answer technical questions posed by staffing suppliers. Those questions are passed through the MSP to the hiring managers, with answers then routed back through the MSP to the supplier. This is time consuming and complex. By contrast, the COE can have these technical conversations directly with the suppliers.
What’s the value of adding another layer in the process?
It sounds like that’s happening, doesn’t it? But it’s really not. Instead, the COE is filling a gap – helping companies achieve contingent workforce efficiencies and cost savings that aren’t being realized today. Today, significant value is achieved not just by lowering bill rates, but by saving the client manager’s time, hiring the right quality – and the right quantity – of contract skills, getting contract resources up to speed quickly, and creating an environment that increases the supplier’s accountability and focus on the client’s project outcomes. The COE makes this happen.
The MSP’s business model isn’t structured to accomplish and measure this type of added value. The MSP’s focus is on supplier metrics that are relatively easy to collect and track – number of submittals, time to submit, and so on. The COE’s focus is on business metrics such as the quality of the documented job requirement, the needs of the project, and the quality of the outcome. So, the COE isn’t creating another layer – it’s creating value and cost savings that are missing now.
Can this work for companies that don’t have an MSP?
It depends on the size of the contingent workforce program – the number of contractors engaged, type of skills, projects, and so on. COE is very scaleable. For example, when working with small groups of solutions-based projects, COE can be incorporated in companies that don’t use VMS technology. But in situations where hundreds of contractors are working on significant IT projects, it’s probably a good idea to have an MSP in place to handle the transactional aspects of procurement, and a COE to handle the rest.
What business problem does the COE solve?
The effect of increased quality on business results is significant. The COE enables the company’s IT organization, working within the MSP process, to provide additional ways to save money – for example, through workforce planning, helping suppliers be more effective, increasing speed to productivity. We’re also seeing results where engagement with the COE is increasing the quality of submittals –recruiters begin driving for first time quality, because they now have the tools to do so.
What is the company’s responsibility in making this work?
Every situation is different. Access to and open communication with a strong, senior IT leader is the biggest responsibility – the COE will earn trust and support across all stakeholders from there. In general, the company will reduce its workload rather than add to it.
What’s the payoff?
Significant. From projects done on time and on budget. The ability to get more done with less. The ability to save or reallocate funds to other projects. Staffing suppliers who are more invested and eager to work on your requirements. Managers who spend less time on calls with suppliers, less time focused on contractor productivity and orientation, and less time worrying about resource strategies.
Is the payoff worth the effort to implement a COE?
It depends on the makeup of your contingent labor workforce and the types of projects you’re doing. A company with nominal, basic IT needs may not see the ROI of a company that is spending significant cost and time to engage contract workers for IT projects. Implementation takes about 30-45 business days, and involves communicating and socializing the concept with the company’s IT organization and the MSP, defining roles and responsibilities, putting structure/process in place. No additional technology is required, assuming a VMS is already in place.
How should companies decide whether a COE is right for their business?
They should start by understanding how – and how much – their IT organization is using contingent labor. High volume use points to COE. Also check the IT organization’s satisfaction with the MSP. For example, are IT managers frustrated? Buying more projects so they can work around the MSP? Companies can give me a call or send me an email. I’d be happy to help them assess whether COE might be of value to their company. (Jennifer Muller: 941-662-7859 | Jennifer.muller@analysts.com)
