How to craft a compelling business case for Services Procurement in MSP: Lessons from real-world implementation

Key motivations, challenges, and adoption strategies

Services Procurement is gaining a tremendous amount of momentum as a critical component of a Managed Services Program (MSP) as organizations seek greater compliance, cost savings, and visibility over their non-employee workforce. Recently, Hays hosted a panel with our Services Procurement clients during SIA’s Contingent Workforce Solutions Summit in Dallas. Marisa Olaleye, Global Director, Strategic Sourcing Corporate Services at Alcon, and Katie Ketterhagen Global Contingent Workforce Solutions Leader at 3M joined our VP of Client Delivery Natalie Hill on stage to discuss the drivers behind a comprehensive Services Procurement program.

These industry experts highlighted how miscategorized spend and lack of oversight drives companies to adopt SOW solutions. A high-level analysis can be used to estimate cost savings and risk mitigation that can be achieved through a proper program and used to build an executive business case.

The trigger event for building these business cases can come from many different factors. In one instance, it was cost pressures that triggered the review of non-traditional labor sourcing. In another instance, it was internal compliance requirements that forced them to evaluate the controls in place to ensure proper sourcing & categorization of all non-employee labor.

Securing stakeholder and supplier buy-in is often the hardest part. While finance, legal, HR, and IT leaders see the benefits, business unit leaders and SOW owners may fear added bureaucracy. Success stems from focusing on ease of use and clear messaging, emphasizing partnership requirements and supplier benefits such as streamlined invoicing and access to better data.

Olaleye went on to emphasize the importance of clear communication. “I think where sometimes we don't spend enough focus when we're looking at launching these kinds of programs is really hyper-focusing on the change management element.”

A key to implementation is ensuring the new process is shared with the hiring managers responsible for the SOW, as well as with their coordinators who will be doing the administrative lift. The messaging must get through to each level of the organization so that the processes are adhered to effectively.

Hill noted that 40% of SOWs outside managed programs are miscategorized, often due to tenure policies or lack of education about the differences between staff augmentation and SOW engagements. This lack of visibility and compliance is an area of concern and opportunity for improvement among mid-size and enterprise firms alike.

Ketterhagen summed it up perfectly: “It's not just the right thing to do, it's also for the right reasons, for compliance, controls, and cost.”

If you’re trying to craft a compelling business case for Services Procurement in MSP at your organization, reach out to Hays’ Enterprise Solutions team to get started.