Thinking about changing your MSP provider? Here are six key considerations to think about before you do.
Why? Why do you want to change? What are the things you're not getting from your current provider? What are the things you do want?
What does your contractual agreement with your current MSP provider say about change?
What considerations have you got around retaining or replacing the technology you currently have in place?
Your Account Team
Be careful about making assumptions about keeping your account team.
Building your business case
Do you have widespread internal stakeholder buy-in to make the business case for change?
Planning for implementation
What resource are you going to need to dedicate towards the implementation of that change? What other stakeholders need to be involved? How are you going to communicate that change to your hiring manager community and your contingent workforce?
Are you thinking about changing your MSP partner?
Maybe you’re coming to the end of your MSP contractual agreement?
Or is there an option for you to extend your MSP contract and you’re considering investigating that option?
Perhaps you’re very unhappy with the service you’re getting and want to instigate a break clause in your contract?
Whatever the reason, it’s a great opportunity to start thinking about what you’d like to be different.
Ask yourself: What are we not getting – if anything – from our current provider that we could get from other providers?
One way to find out is to talk to other providers before going out to tender.
Don’t just look internally about what you want / don’t want and put that in your bid.
Having conversations with two or three other MSP suppliers doesn’t mean you are committing to giving them your business. It simply gives you a feel for what other services you could be getting and what another MSP model could look like if you were to change provider.
Ask yourself: Do I want onsite account teams or offsite account teams? What types of technology could add value to what we are currently doing?
Exploring your options gives you an opportunity to think about how the relationship could work differently with your current MSP provider. It also gives you a feel for different types of supplier relationships. One might illustrate the benefits of having very high levels of direct fulfilment and another might show you the benefits of having a broader supply chain.
What are your key drivers behind seeking change and what do you want to get that’s different? Going through this thought process will help you build your business case internally. It will also help you build your tender document because you can start thinking about the questions you want to ask and the areas of focus that you want to include.
When you want to change your MSP provider, it’s easy to focus on what you don’t like about your incumbent and to express your frustrations about what isn’t going right.
But what you want from your MSP partner is easier to articulate during a tender process, rather than having a long list of everything you find frustrating about your current provider.
This is why you really need to think about what it is you want done differently. What are the different things you want as part of your supply solution going forward?
During any change process you’re still going to have open role requirements in your business that need to be filled and you’re still going to expect a certain level of service. That’s why during that process you want to ensure you’ve got an engaged supplier.
So, how are you going to do that? Do you expect that engaged supplier to be your outgoing supplier or your incoming supplier?
To answer those questions and to help you understand what that transition process will look like, you need to understand your contractual agreement with your current supplier.
A good contract will typically have a very clear exit management clause or section to help manage that change process. It will clearly state what the timescales for transition should look like, what can happen with respect to transitioning agency workers, what your current supplier is obligated to do in terms of provision of data and information to any new supplier, and what support will be given during the transition process.
This information is important to help you understand what you can and cannot do as far as that process is concerned. You need to understand which workers can transition and when, and what potential cost implications there may be.
What service is your supplier obligated to provide during the transition period and how are they going to be reimbursed for that? This is an easy question to overlook and yet is one of the biggest reasons for issues arising during the transition process.
Why would your outgoing supplier want to work on a requirement on your behalf all the way though the transition if they cannot get a return on their investment? From your perspective, you don’t want any impact on business as usual and you expect your outgoing supplier to continue providing all their services until the point of go-live. From your outgoing supplier’s perspective, why would they want to work on a requirement if you expect that person to transition in a matter of weeks or months, and they can’t get a return on that investment?
This is why it’s a good idea to have some rules in place to continue that service. For example, either you agree to continue paying your outgoing supplier margin for a worker they’ve placed up until the point of transition or that worker won’t be expected to transition for three/six months after they start. Or, during the tender process, ensure you get a commitment from any incoming suppliers that if your current supplier becomes disengaged during the transition process and no longer wishes to continue filing new vacancies, they can step in to take that on. In other words, you could be asking your incoming supplier to take over new vacancy fulfilment earlier than their typical go-live date would be.
If your current MSP provider is using their own proprietary technology as a Vendor Management System (VMS solution) it is highly unlikely that you will be able to keep that technology if you transition to a new supplier.
However, even if your current MSP provider is providing you with third-party technology, it doesn’t automatically mean your new provider can simply transition the contract and continue using the third party VMS.
For example, if your supplier has been using third-party technology during the term of their contract and they have invested a lot of money in developing and customising that tool specific to your organisation, then it’s not an automatic contractual right that you can pass on that version of the tool to a new supplier.
This is something you need to think about because it may be that you can’t keep that version of technology if you’re considering switching suppliers.
Look at what your contract states about the technology you’re currently using and find out from your current supplier if you can transition the technology agreement in light of a change. You could also talk to the VMS / technology provider directly to get their view.
What you want to avoid is a situation where you cannot retain a technology platform you had assumed you could simply transition, or you are invoiced a huge amount from your outgoing supplier for the customisation / development costs they have invested during the full term of the contract, in order for the technology to be retained.
Understand what the arrangements are for the transition of that technology. If you want to keep your existing tech, don’t just assume that you can move it from one supplier to the next.
It’s easy to assume that your account team will transition under TUPE if you switch to another supplier. But just because the account team is in scope for TUPE and it could transfer under TUPE, does not mean it will.
You must remember that the account team has a choice in that process, and they don’t have to move to the new supplier, nor do they have to stay with you. Instead, your current provider could find them another opportunity within their own business, and they will transition to work there, or they may chose to leave to work elsewhere.
“I would say, in my experience, typically only around 25 per cent of account team members actually TUPE transition as a process of change,” said Alistair Haigh, Rullion Commercial Solutions Executive Director.
Obviously, there are mitigating factors that encourage TUPE transfer. For example, if the account team works onsite in a remote location, there is a higher likelihood of the team transitioning. This is because their current employer might find it challenging to provide them with a similar sized opportunity, within a similar commuting distance. But if the onsite team is based in a major city, there is a strong likelihood that they will stay with their current employer.
So, just as you mustn’t assume you can transition your technology from one supplier to the next, do not assume that you will keep your existing account team if you change supplier.
Building your business case
Before going out to tender, first have those internal conversations with all your different stakeholders have touchpoints with the MSP and get their buy-in.
Sometimes your HR and/or procurement teams might be unhappy with your MSP provider for a multitude of reasons. You find yourself going through a convoluted tender process and then you re-award the contract to your incumbent. You’re left wondering what has happened, given the main stakeholders who own the contract were unhappy.
Then you find out the reason the contract has been rewarded to your original supplier is because HR and procurement didn’t speak to the rest of the business.
If operations are really happy with your supplier, they get the people they want, when they want them, and they get them at good rates, and they have a great relationship with their account team; if the finance team think the financing and billing process is efficient and easy; and if your legal department is really happy with the way your MSP provider manages IR35, then you may struggle to make a business case for change.
To make matters worse, you could end up costing your business a fortune and going through a lengthy tender process that ultimately ends up rewarding the contract to the same supplier. Instead, it would be much easier to renegotiate the contract with your incumbent supplier.
That’s why, if you’re thinking about changing supplier, and you’re the owner for that contract, don’t forget the importance of engaging with all the different stakeholders who are associated with the MSP. Find out what they like about it and what they don't like. Only by having their input will you be able to make a business case for change when the time comes, and you will know that your efforts during the tender process are going to be well rewarded.
There are many influencers in the business, and some may not want change or disruption to the status quo.
It is never exclusively one individual stakeholder’s decision to change provider. You are going to need input from the rest of the business. So, make sure you seek out their views before embarking on any process of change or going through a lengthy tender process.
You want to ensure you have buy-in from all stakeholders throughout the process and you’ve got to think about it from their perspective. If all your different stakeholders can see is the downside of change (e.g., what if during the transition some of my key agency workers decide that they're going to leave because they don't want to work for the new supplier? What if this new supplier isn’t as good at finding me people as our existing supplier is? What if the payroll goes wrong?), and they haven’t been engaged early enough in the process so that you can articulate some of the things you’d like to see change, and the upsides of change, you’re not going to get buy-in into any change in the process.
During the implementation of any new MSP, you are going to have to commit a certain amount of resource, time, and effort.
Things to think about:
Who is going to potentially project manage the implementation for your organisation?
What stakeholders will need to have input into the process?
Make sure you’ve communicated with those stakeholders either prior to the tender going out or during the tender process. What will their role be in that change process? For example, someone from your organisation is going to need to communicate with the outgoing supplier and they’re going to need to make requests for information, for data, and so on.
Your new supplier is also going to want somebody who validates that data from inside your organisation. They will receive a lot of information from your outgoing supplier about your workers, the roles they do, the line managers they work for, the pay rate they’re on,, etc, and someone in your organisation is going to have to sign off on that.
There is going to be a process where the incoming supplier reviews your current process from end-to-end, and they may recommend some changes, so consider who will need to review / sign off any process changes that are put forward.
If you change your tech, you will require input from your IT team. This is particularly true if there are any integrations with your existing finance or HR systems, but even if it’s something as simple as making sure that when the new VMS goes live, it doesn’t get blocked by your company’s firewall.
You will also need to have input from HR, resourcing, operations, and finance.
For example, finance will want to have a say in what billing needs to look like. Also, if there’s an integration with the finance system, the output from one system needs to be configured so that it automatically uploads into your new finance system. You don't want to get close to go-live and suddenly realise that things aren’t working.
You might also need some input from legal during the contract negotiation process which will require further resource.
During your tender process ask any incoming suppliers what support and assistance they want from you as a business during the implementation process. Explore what resource they will want from you and how much time commitment that will involve, to ensure the implementation is a success. This way everybody knows what is expected throughout the implementation.
As part of this, it’s of benefit to have weekly implementation meetings, think about setting up a steering group and who is best placed to be on it.
At Rullion we typically set up a steering group which has members from our implementation team and representatives from our client so that we can update on any tasks undertaken that week. It also allows us to discuss upcoming tasks and workstreams that need to be completed. We can discuss any blockers, issues, and information that’s still outstanding and agree any actions and owners that we want as part of that.
Remember to communicate
Communication is paramount during this process, and you need to give a lot of thought to building a detailed communication plan very early on in the implementation process about how messaging around the contract’s award is going to be managed.
You want to ensure you remain in control of what communication happens and when. Timing is also critical, as is ensuring communications to multiple stakeholders are released at the same time. For example, what happens if the outgoing supplier immediately upon notification that they’ve been unsuccessful communicates, before you do, to your hiring manager community that they’re no longer going to be the MSP provider? And what if they also communicate this news to your contingent agency worker community, before you have informed them of the change and provided reassurance of what happens next?
To avoid this and the potential upheaval it can cause, you want a plan in place that communicates the news to your supplier and your hiring manager community and internal stakeholders, simultaneously. You want to give them confidence that this is a great decision for your business and to reassure them you have a proper process of transition in place to bring the new supplier in, as well as plans to communicate the news to your agency worker community who might feel some uncertainty when hearing about the change.
It's important to make clear to your hiring managers and internal stakeholders that you will have representatives from your new provider onsite at any of your major locations over the next few days.
However, if they get any questions from your existing agency workers, tell them to reassure them that:
- Their assignment isn’t going to be affected nor do you want to bring their assignment to an end early, but instead want them to continue their assignment.
- As and when they transition to the new provider, there will be no changes to their terms and conditions, nor will their payrate or the frequency of their pay change.
- The new supplier will arrange a one-to-one meeting with them within the next few weeks.
- If they have any questions, tell them representatives from the new supplier will be onsite or give them a contact number to call.
When you put this type of communication plan in place you manage the impact by getting out in front of the news and people are less inclined to panic about the change.
You can also include a contractual stipulation in your exit management clause that your outgoing supplier is not allowed to communicate any notification of change unless it has first been agreed by you.
To conclude, changing provider does not have to be a painful process if it is managed properly, and given careful consideration beforehand. A lot of the problems and challenges that arise can be discussed upfront and taken care of; you just need to be aware of them so that you’re not blindsided.
One last point
Moreover, if you’re absolutely delighted with every single aspect of your supplier’s service, your current MSP provider does a great job for you, the tech they provide is incredible, they are unbelievably committed to working with you, they are a strategic partner, they come up with suggestions about how to improve their service etc, and the only concern you have working with them is around price. Well, in that case, have a conversation with your incumbent about pricing first, because there is a cost of change.
It does cost time, money, and effort to change your supplier. It costs time to go through a tender process. It costs time to negotiate new contracts. It costs time and money to implement a new solution.
Hence, unless you’re legally bound to go to market at contract’s end, if you're delighted with your current MSP provider, and their contract is coming to an end, don’t think you automatically have to go to market to get a better deal. Just have a conversation.
Even if you’re happy with your current MSP provider, it’s worth having a conversation with two or three other MSP providers to see what else is available out there because maybe you’ll discover you’re not getting such a great deal after all - or maybe you will discover you are.
Considering changing your MSP provider or simply exploring your options? Contact us using the form below.