Changing your MSP partner is a big step and not something to be taken lightly as it will have significant ramifications for your business.
It’s going to take time. It’s going to take effort. And there is going to be cost and risk involved, so you want to ensure you’re fully prepared.
Whatever the reason for wanting to change MSP partner, you must first build a business case for change.
A general feeling of unhappiness is not sufficient grounds to make that change.
Also, talk to your incumbent MSP partner if you’re unhappy before making the decision to go out to market.
It’s much easier to get them to improve their performance and to address the issues you’ve got, than it is to go out to market and make a change. The procurement process alone involves a lot of work and effort. And if you do decide to change, the effort then continues in terms of the implementation process and transition to your new provider.
Top SIX reasons why you might consider changing MSP partner
You might be coming to the end of your contractual agreement and rather than extend your contract – if that’s an option – there are several drivers that might prompt you to want to change MSP partner.
- Performance issues – when you’re not getting what you paid for. Your MSP provider is not delivering a service that is having a positive impact on your business.
- Relationship issues – the relationship just isn’t where you want it to be. You’ve got dissatisfied customers within your business and that’s not being addressed.
- Lack of proactivity by your MSP partner to evolve their service – there was a lot of activity and change during the implementation process but since then nothing’s changed and you’re not getting the support and information you need.
- Commercial – you might think your pricing needs to change and that you could be getting better value with another supplier.
- Legislative changes – you’re not getting the backup / support that you need from your MSP partner to navigate those changes.
- Changes to your business – your business model has changed, and you want to adapt your talent solution in line with that.
Performance issues
One of the easiest and most objective reasons to consider changing your MSP partner is when you have significant issues with delivery of the service.
For example, if when looking at your Service Level Agreement (SLA) a number of those performance metrics are repeatedly in the red, meaning your supplier is consistently delivering at a level that is unacceptable to you, then that is something that might force you into a position where you want to make a change. Particularly if, despite your MSP’s efforts to change and reassurances that their performance is going to improve, this unsatisfactory performance continues.
This is because, if your SLA metrics are continually in the red, there may be a detrimental impact on your business.
For example, if your MSP provider has committed to 90% direct fulfilment, but for the last six months has only been able to deliver 50% direct fulfilment, and the remaining roles have been filled using second tiers then that is having a commercial impact on your business. Even if all your roles are being filled and you’re getting the talent you need, you’re still paying much more for your contingent labour than you’d anticipated.
Moreover, if your MSP is consistently unable to deliver the talent you need, forcing you to continually go outside and use other suppliers, not only have your costs gone up, but you’re now also having to get those additional contractual engagements in place.
Another example of a performance issue is if one of your SLA metrics stipulates that less than 5% contingent workers leave their assignments early, and yet you regularly experience 25% to 30% of contingent workers leaving their assignments early. This is a cost to your business both in terms of the cost of bringing new people in and it may delay your projects.
If the service that you’re paying for is not being delivered in a way that has been articulated and promised, always remember to document what the issues are and to ensure that you utilise the escalation process you have in place under your MSP agreement. Don’t just continue to have monthly meetings with your account team where you look at the SLA metrics and their performance isn’t what it should be without utilising that escalation route.
If performance is significantly poor, and is poor on an ongoing basis, that may provide grounds for early termination within your contractual agreement. Talk to your legal department to find out more, as there will be precedence for that within your contract.
Relationship Issues
Another key driver for change is if there are problems with your MSP’s relationships with your different stakeholders.
So, although your provider might be hitting their SLA metrics, the feedback you’re getting from end users of the service is one of dissatisfaction.
When those relationships have broken down and people are dissatisfied with your MSP you might find that when it’s time to extend your contract, you’d prefer to go back out to market and look for another supplier.
For example, your MSP might be hitting 95% of their SLAs, and yet the one that really upsets your hiring managers is in the red.
From an SLA performance review perspective 95% in the green is a great performance contractually. And yet from hiring managers’ perspective, your MSP’s performance is poor because something that matters to them and meets their needs is persistently not being delivered by the service.
This is when SLAs can be misleading. That’s why, within any SLA agreement, you want to ensure you always build in some measurement of satisfaction across all your different stakeholders including your candidates, your contingent workers, your hiring managers, and any other central stakeholders such as Finance, HR, IT, Legal, and Procurement.
Once you do this, you might find that workers are complaining because they aren’t getting enough contact with your MSP provider; there may be issues with payments; your hiring managers might be telling you that they don't feel the account team truly understands their needs / requirements, and that they’re regularly seeing CVs that don’t meet their prerequisites; other stakeholders in the business are saying they don’t get the reports / market data they need.
However, if you’re getting that feedback, make sure you have an objective way of gathering and documenting that data so that you can build a business case for change. It’s very difficult to address an issue if you’re simply quoting unhappy end users of the service.
There are tools that your MSP provider can use to capture that data and some Vendor Management Systems (VMS is cloud-based software platform that finds, engages, and manages your contingent labour and service providers) allow you to capture satisfaction surveys within those tools.
What you want, is to ensure all stakeholders are satisfied with the service that they’re getting, because one of the most difficult things to deal with in terms of having those conversations with your MSP supplier about performance, is when you offer anecdotal feedback as opposed to documented, undisputed data such a low Net Promoter Score (NPS is an objective measurement to gauge respondents loyalty and satisfaction with a company’s service).
Having a conversation that is backed by data is much more conducive to addressing the actual issues at hand. However, if your NPS surveys or customer satisfaction surveys are continually poor, or your central stakeholders are repeatedly unhappy with your supplier, then that might be a time to look for a new partner.
Something to bear in mind
Sometimes you get your metrics wrong. Sometimes your SLAs are all in the red and yet hiring managers are extremely happy with the service. Other times most of your SLAs are in the green and yet your hiring managers are extremely unhappy with the service.
For example, you might stipulate your MSP needs to put three CVs within 48 hours in front of your hiring managers and yet it’s taking your MSP five days to get those CVs in front of them. But your hiring managers don’t feel five days is an issue because they know that they work tough roles, and they don’t have capacity to review CVs within 48 hours.
Or perhaps your account team is meant to put forward three CVs for every role and for whatever reason puts forward those CVs in stages rather than all at once. And perhaps your hiring managers consistently hire the first applicant they see before the MSP account team has managed to send across two more CVs for consideration. In this scenario, your hiring manager is likely to be extremely happy with your MSP provider and yet that SLA metric wasn’t met.
Or, if you’ve agreed a metric that your MSP has five working days to provide three CVs, and you’re in a situation where someone has gone off sick and you've got no one to cover reception for the day, an MSP that sticks to that five-day metric won’t serve your needs.
The reason for these discrepancies is because maybe the SLA was built without as much input from Operations and hiring managers as there should have been. Therefore, the metrics that were agreed weren’t sufficient to meet hiring managers’ needs.
And remember…
A relationship that has broken down probably isn’t grounds for an early termination. However, what it does mean is that you might not want to extend your contract when it’s time to consider extending.
This is why you need to be making these decisions, gathering feedback, and understanding where you are in terms of your relationship with your supplier, at least six months before that renewal date is up.
Because if you don’t want to extend, you’re going to need that time to go through the procurement process and then give yourself time to do the implementation.
Lack of proactivity by your MSP partner to evolve their service
Another reason you might want to consider changing your provider, and perhaps more common than not meeting your SLAs / specific performance issues, is around the feeling that your provider isn’t evolving or continuing to add value through the delivery of their service.
For example, does your MSP partner analyse the data and come to you with new ideas about how to improve their service / improve your access to data / improve the management information you receive / get you the talent you need / make things more efficient? Or do you always have to go to them and ask for things? Is your MSP partner constantly looking at ways that will help you do things better and faster, and doing things to deliver more value – whether that be at a lower cost or getting more for your money?
Lack of proactivity on behalf of your MSP partner is often one of the things that can damage the relationship, and one of the most common reasons why businesses feel they want to change supplier.
Again, you must quantify these findings when building your business case for change because a tender process is costly and takes concerted time and effort.
If you want to go to market rather than renew your contract with your current MSP partner, start to document examples of where you had to go and ask for something. It’s very difficult to agree to a significant business expense based on “we have to ask for things, and we don’t think we should”.
Document all the times you’ve agreed some new initiatives / ideas at your quarterly business reviews that you wanted to see implemented and they just haven’t happened.
Talk to people in your wider network and find out what other MSP providers have been doing for them by way of evolving their service and looking at new ways to add value.
These are examples that you can then use in your business case to take to your Board and Operations when you recommend not renewing your MSP’s contract and going out to market to make a change instead.
And remember: have you had a conversation with your MSP provider and brought this to their attention? Have you expressed your dissatisfaction around their lack of proactivity or their failure to add value and constantly look at ways to innovate and change? Because if you’re thinking of going down the route of change, make sure you’re convinced that it’s something your MSP partner can’t change first.
Commercial
If you genuinely think you’re not getting a good commercial deal anymore because things have changed, then obviously that may be a reason that you want to go to market.
Perhaps when you signed your MSP deal, your annual spend on contingent labour was £5 million. Today, because of the work your MSP has done, you’ve identified additional spend you weren’t aware of, and your actual spend is now £15-£20 million through your MSP provider.
You might therefore think if you’d gone to market for £20 million, you’d have gotten a better deal and are now spending a lot of money in comparison to your overall spend.
Or perhaps the commercial environment has changed. Perhaps interest rates were high when you first entered into partnership with your MSP and now, three years on, interest rates have dropped significantly. Because cost of finance will have been factored into your MSP’s pricing model, you might feel that is an opportunity for you to reduce cost. But if your MSP says they’re unwilling to change their commercial model and you’re coming towards the end of your contract, then that might be a reason to change.
Legislative changes
Although this doesn’t happen often, if the legislative landscape changes significantly, and you don’t feel your MSP partner has supported you enough in managing the introduction of this new legislation nor has it provided you with a strong compliance solution, this could prompt you to look for a new partner.
For instance, when the Agency Worker Regulations were introduced, several businesses felt their MSP providers weren’t managing the legislation particularly well or able to provide sufficient evidence of compliance. For example, MSP providers hadn’t adapted the technology to capture comparator information, nor did they adapt it to alert them after temporary workers had completed 12 weeks on assignment and that their status had changed.
The introduction of IR35 legislation is another example of new legislation coming in and businesses not always feeling supported enough by their MSP provider to understand the new legislative landscape. This was the trigger to prompt them that it might be time to change MSP as they genuinely felt their MSP provider wasn't helping them manage their obligations under IR35.
Changes to your business
The final thing that might prompt a desire to change your MSP partner is if your business has changed and you think you might want a different model.
For example, perhaps you’ve always used different MSP providers for different parts of your business (one for admin, one for IT, one for engineering etc) and now you want to amalgamate all of those and to bring them under one MSP.
Obviously, you’ll need to build a business case to support this change, but it is another reason why you might to choose to go out to market rather than renew your contract with your existing MSP.
It could be that your business has evolved and that when you originally selected your supplier you needed someone with engineering experience but now over the last five years you’ve become more of a digital business and have started to outsource most of your engineering projects in their entirety. Hence, you’re seeing a shift in headcount.
Nevertheless, just because your supplier isn’t “an expert” in your area of business, doesn’t necessarily mean you must change. For instance, you might have a supplier who was brought on because of their engineering capability and although your contingent worker needs have changed, and you’re using more customer service people and less engineering workers, your supplier is still doing a great job. So why would you change just because they’re not known for customer service, if they’re delivering a great service?
To conclude
As outlined above, there are several things that might trigger you to consider it’s time to do things differently and to prompt a change when your MSP contract comes up for extension and/or renewal.
However, whether it’s SLA performance, the relationship, evolving the solution, price, legislation changes or changes to your business: always have a conversation with your MSP partner first and see what can be done before going out to market.
- Can they improve SLA performance?
- Can you build a better relationship?
- Can you get a commitment to greater proactivity?
- Can you get your MSP partner to reduce price?
- Can they support with you with legislative changes?
It may be that you can’t get a better deal. Maybe they’ve said no and that may be the reason that you go to market. But in all these instances, always have a conversation with your MSP first.
If you don’t, the risk is, you go out to market and your current MSP provider submits a great bid containing lots of new ideas, different ways of working, and a better commercial deal; things they’d been willing to provide all along. But you didn’t know because you’d never had the conversation.
So now, you’ve gone through a lengthy and costly tender process, and the likelihood is you're going to re-award to your MSP. When all those things could have been taken care of if you’d just had those conversations first.
If you’re adamant you want to change, you must build the case internally for change. Just because you’re unhappy, doesn’t mean that the rest of the business is too. You need to gather that data. You need to understand whether Operations are happy and, if they are, what are they satisfied with? And how can you address the shortcomings that you’ve got?
Give yourself enough time
Be mindful of how long it takes to go through the procurement process and to manage an MSP implementation.
There’s little point deciding to go out to market two months before your contract is due to be extended because you haven’t given yourself enough time to do that.
Typically, it takes at least three months to conduct a robust procurement process. Add to that a further three months to manage the implementation and migration.
Because if you don’t want to extend, you’re going to need that time to go through the procurement process and then give yourself time to do the implementation.
What if you don’t want to change?
You might not have a choice. Perhaps you operate in the public sector and are legally bound to go out to market for a new MSP when your current contract comes to an end.
Perhaps you work in a regulated business and can only provide an MSP contract for a maximum period and once that time limit is reached, you’re legally obliged to go to market.
Or perhaps your legal department wants you to go out to market because they don’t want to extend beyond the contractual relationship you’ve currently got. It could be company policy / an internal decision that you don’t extend contracts beyond the maximum time stipulated.
However, if you are extremely happy with your MSP provider and you really want to extend, and you don’t believe that you’re going to get a better deal or find a better supplier, you may be going through a tender process for something that’s going to cost you a lot of money but, inevitably, you know what the outcome is going to be, because you don’t want to change.
Our advice: If you’ve done your due diligence and you’ve talked to other providers. If you’ve got an idea of what the market rates are, and you feel that commercially you’re getting a good deal. And, if you feel that you’re getting a good deal from a quality and relationship perspective, then talk to the business and your legal team as soon as possible (as you enter the final year before that contract is due to end) and tell them that you want to go beyond the term of your current contract. Find out: Is it possible to extend? What would an extension look like? What would you need to do? How would you get the business to sign that off? Do you need to get approval at board level etc?
Dissatisfied with the service you’re getting from your current MSP partner? Or, perhaps you simply want to explore if you could get a better commercial deal from another provider? Talk to one of our team today by filling in the contact form below.