MSP in APAC: Myths, Evolution and What’s Next

Transcript:

Welcome to Subject to Talent, brought to you by Allegis Global Solutions. Similar to you, we're always trying to learn more. On this podcast, we speak to workforce and talent experts from around the world, covering market trends, technology, and our ever-evolving, dynamic industry. 

Bruce Morton: Welcome to Subject to Talent, brought to you by Allegis Global Solutions. Similar to you, we're always trying to learn more. On this podcast, we speak to workforce and talent experts from around the world, covering market trends, technology, and our ever-evolving dynamic industry.

Today, I’ll be handing over the microphone to my very good friend and colleague, Naveen Mascreen. Naveen is a contingent workforce management leader with over 18 years of industry experience.

He is currently the Executive Director for AGS’ Managed Service Provider  (MSP) business in India.

In this episode, he’ll be joined by Sameer Srivastava, an external workforce management expert with over 20 years’ experience and is the Senior Vice President for Simplify VMS  in the Asia-Pacific region. 

Together, they’ll be discussing common myths and perceptions about MSP and VMS and how the partnership between the two has evolved and driven popularity of these workforce solutions, particularly in the APAC region. So, let’s listen in. 

Naveen Mascreen: Hi, I'm Naveen Mascreen, executive director of MSP solutions with Allegis Global Solutions in India. Joining me today, on this episode of our podcast series, is Sameer Srivastava, a senior vice president of Simplify Asia Pacific. Simplify helps businesses acquire and manage their external workforce and talent, using automation controls, data and performance transparency, powered by the latest technology stack that allows for greater flexibility and end user experience. A very warm welcome to you, Sameer. It is indeed fantastic to have you as a guest in the third season of our podcast series, Subject to Talent. We always start off by asking our guests how they got into this industry. So tell us a bit about your journey so far.

Sameer Srivastava: So hi, Naveen. First of all, thank you for inviting me. I'm very happy to be here. In terms of my journey, I graduated with an MBA in the UK in 2005, and then I was working as a change management consultant with the professor. And as that project was winding down, I was looking for opportunities, which allowed me to employ my newly learned skill set from the MBA, along with change management and project management experience that I had before. And this opportunity came up with the Kelly Services, to help run their implementation programs across Europe, with Fortune 100 clients. And that was a great opportunity for me at that time and I haven't looked back since. How about you Naveen?

Naveen: That's awesome. Similar to most folks in our industry, and quite similar to your story as well, it was an accidental career move for me. After an initial short stance in business development with the insurance staffing and the real estate sectors, I joined back the staffing industry in 2008 in the strategic account management function, leading some of the largest engagements for the company back then. This one day, my manager back then walks up to me and hands over a 40-page printout. I can vividly remember that visual even now. And said, "Hey, Naveen. We have signed up a big global customer for something called an MSP solution. India is a big part of that rollout. I'm not really sure what it is about and what needs to be done. Frankly, I don't have the time or the mind space for it. Anyways, you enjoy working in a global environment. So read the printouts, figure it out and get it done. And by the way, don't bother me with too much of it, unless you can't avoid it."

So since that first conversation, it's been 14 years and two dozen programs in MSPs later, here I am today, still enjoying every moment of this journey, learning new things every day, and looking forward to the future. So let's get into our first segment for the benefit of our listeners, who may not know about the concept of MSP or have potential misconceptions about it or are not aware of what the benefits of an MSP solution. So let's spend some time on the one on one basics. So to start off with, let's just define, for the audience, what is an MSP and a VMS, in the context of contingent workforce management?

Sameer: Yeah, absolutely. I think that's really necessary given the misconception and myths that are out there. So, at least from my perspective, MSP is a managed service provider in the staffing industry, which is basically, today, primarily utilized by organizations to help manage their external workforce. And the way they do that is, obviously, they manage the whole program for these firms. And a big part is created by the vendor management system or the VMS, which is the software they basically utilize, to manage this program into India.

Naveen: Absolutely. And I would probably bridge it and call it an entire talent supply chain solution, which has technology bolted on it and just enabling the entire value proposition of an MSP solution, which we will talk about later in the podcast, as it relates to transparency, visibility, demand management, and so on and so forth. But I think you've covered it fairly comprehensively, Sameer. 
So let's kind of make a quick segue into, and this is my favorite topic, right? The common myths and perceptions about the MSP/VMS solution. So let's just kick that off, I would say that I think for the rest of this podcast, we would probably not keep MSP and VMS mutually exclusive. It's an integral part of the entity, so we'll probably address it together on the same breadth. So in those terms, when we look at the first myth that we have, that I hear very often, and I've heard for many years right now is, MSP only manages temp labor supply chain. What are your thoughts on that, Sameer?

Sameer: Yeah, absolutely. I think, like I touched up on earlier that maybe that's how, but today you're talking about total time management. I already have a couple of programs in India, which we are managing not only their contingent as well as full-time workforce for clients. So obviously that's one myth that's been busted right now.

Naveen: Yeah, absolutely. And from my perspective, I think anything that classifies under external work force, which includes temp labor, gig workers or freelance workers, as you may call it, or even independent contractors, and even outsourced service entities, like the large professional services firms, IT services firms and consulting firms, which provide either managed capacity build outs or large SOW contracts or ODCs all of this, I think typically in my mind, also constitutes external workforce. So I think that's kind of, for the audience, a comprehensive definition of what all could be potentially managed under the armpit of an MSP solution. So that takes us to the second myth. I've heard that pretty often, as well as I engage with a lot of first-generation buyers that MSP typically makes internal jobs of vendor management functions, procurement functions, HR/staffing functions – typically the sponsoring organizations for a solution like this – making their roles redundant as it takes away the function and control completely. What's your experience and observation around this, Sameer?

Sameer: I think you're spot on, right? I've had that feedback from a few clients I've spoken to as well. And there's definitely no truth to it. For an MSP/VMS solution to succeed, we have to work hand in glove with the client teams, right. Especially when it comes to change management. So we work together to help clients achieve significant benefits realization. So we have to work together.
Naveen: Yeah, you're absolutely right. I think the way I look at it is, if anything, a comprehensive MSP/VMS solution only augments the engagement of the customer. It frees them up from the transactional, and the tactical, and the operational and helps the organization, all those functional users and leaders to do more strategic work, so that we become the enablers of the strategic work that they could do, in managing their external labor. So I think it's a complimentary force rather than something to be wary about. 

And moving on to the other myth that was a pretty popular one, and I see this in a lot of current discussions that we've been having over the last few months, and more so in the recent past, and this I've seen, typically, with customers within our region in India is that they want to stand up a solution fairly fast and they feel that a VMS solution/technology is not necessarily important to stand up a program, whether that's in-house or through an MSP provider. Sometimes there's this misconception that they can work with makeshift tools, Excel spreadsheets or homegrown systems. And that's good enough to stand up a program. And also because there's this perception that VMS is too complicated to implement and it leverages or uses up too many resources and costs. What are your thoughts being an expert in that domain, specifically around the VMS and seeing it the way you see it today? What do you feel about it?

Sameer: Yeah, again, that's a great point. I mean, so I think, based on my experience within the industry for 15 years, right? Working in global programs, it's very difficult to manage programs without a VMS. Simply because the VMS, by itself, offers you the opportunity to streamline the workflows, reporting, visibility, help you track compliance. All of these together are very difficult to manage just using spreadsheets or homegrown tools, which are not geared towards specifically the solution. And that's to your point about difficulty implementation. There was some truth to it. Let's say when these programs started out, maybe 20 years ago and then rolled out globally, there were lack of change management understanding, but today's technology, today's tools, especially with the ones which are built with the latest tech stack, implementations are a breeze. The technology really helps integration as well as making sure that all the fields and other aspects that are required for a particular client can be implemented very quickly. So yeah, that's, again, a big myth, which I think that's good that you brought that up.

Naveen: Yeah, absolutely. And that's a good point you called out there. I think, also we're beginning to see a trend of new and upcoming players in the market, in the VMS technology space and to your point around the latest tech stack, it makes the implementation and the integrations with downstream and upstream systems, fairly seamless and quicker than it used to be. Now, since we you've spoken about these myths, these are the top three and the most common ones that we would come across in the market. Now let's kind of switch that over to the value driver. So now with all these myths busted, what is the true value proposition for an MSP solution to be implemented for a buyer organization?

Sameer: Yeah, that's true. That's a great question. I think over a period of time now, we're definitely seeing that this VMS/MSP solution offers a lot of value to different clients, so you can offer compliance, transparency and visibility, process standardization, cost reduction. And now we are moving on to the next stage of this growth of VMS we're looking at predictive analytics and insights, which perhaps we might get to later. So there is a lot of different value, different forms that has been offered to different clients. What do you think, Naveen?

Naveen: Yeah, I think you've laid it out really well. One the shifts I've seen, when I look at the first 10 years of the evolution of the MSP industry in India and the last five years, I think the biggest shift I've seen is the order of prioritization of those different aspects that you mentioned, right? You spoke about compliance, transparency, automation, cost, and decision enabling data. I think compliance, right now, I have begun to see a lot of customers talk about the presentation pitches that we are on, the RFPs that come out, compliance and governance seems to be the number one priority of organizations. Of course, the process automation and the simplicity of use, and in how simple we can make this for the end user, has definitely kind of moved up the ranks. But very interestingly cost management has kind of moved down a few notches. Why do you think that could be the case?

Sameer: Yeah, that's a great point. And I think a lot too has to do with the value that clients have realized over a period of time, especially when it came to HR outsourcing. Remember that a lot of these organization that we have in India started with back-office operations, right? And one of the objectives was cost reduction. But then I think over a period of time, we have had a twofold change, right? Where the domestic market has grown, so they have clients in India as well. Secondly, they've realized that there was a trade off between quality and cost, right? So now, especially the global MNCs, have sort of adopted the strategy of realizing the fact. Basically, they realize the fact that their cost isn't the only factor and they've got to focus on quality as well.

Naveen: Great points there. Now, when I was just kind of hearing what you were saying, also one of the things that came in mind is, it's not just about standing up a solution, filling the right cracks, fulfilling demand and all of that stuff, the entire solution, when you look at it end to end. From the time we do discovery, solution design, implementation and project management, technology integrations, and then we go live, and then we have steady-state operations, and then in all of this, we constantly have supply chain as the constant feature in that entire life cycle. I feel this whole solution is very comprehensive, it's very professionally run and managed, and the partnership between MSP and VMS providers, being so strong, I think the ability to execute something in a very large scale, giving the kind of results and efficiencies that the customer’s looking for, is not far out. Do you agree?

Sameer: Yeah, absolutely. And I think the one more thing is, now the clients have also become savvy, the customers and clients that we have. Now they're aware of, first of all, starting with the value that a contingent workforce is adding, right? Especially given this period of COVID that we're coming out of now, allowing them the flexibility to plan and implement different strategies. And the value added for overall the solution bring for them, including compliance and other areas we touched upon earlier.

Naveen: Awesome. That takes us to the next segment, which is a favorite segment of mine, because I think you and I have been a part of the story within the India region, as far as MSP solutions are concerned. So when we just kind of look at it and we take a real view reflection on the last decade of MSP and VMS solutions in the India market, what was it like back then? Let's kind of jog back our memory lane. And how has it evolved now? And do you think that it's gaining significant popularity over the last decade?

Sameer: Yeah, that's a great point, Naveen, again. So I'm glad that you brought it up. So yeah, I think over the last 10 years, I've been implementing and managing programs in India, there has been a drastic change. I think it all started with the initially global expansions, primarily coming down to India and a lot of the clients virtually, not being sure of what the value of this solution will bring into them. And a lot of change manage involved work. The integrations were quite tough. Getting the suppliers on board was, again, another problem. But now after 10 years down the line, I see, overall, this is a win-win situation for everyone. The suppliers, for example, have access to all the requisitions that are coming through a client, without missing anything. Clients, obviously, stuff and we touched upon early, visibility reporting predictive analytics. And, of course, the candidates also have a great onboarding and off boarding experience. And now we are seeing regional companies, themselves, looking for solutions. And, again, that's where we are finding a lot of traction, regionally. What about you Naveen? What do you think?

Naveen: Yeah. So I think, for me, the biggest shift in the last decade has been the overall understanding of the solution itself, right? I think it started off more from a perspective of gatekeeping, kind of being the middleman, and just focusing on the compliance aspects of things. And I think there was still a lot of things unsaid or unproved about the value proposition of the solution. Whereas fast forward over the last four to five years, I have seen a significant shift in the way it's perceived, the customers or the buyers have begun to see the value of what this could bring to the table, how it could augment their existing workforce strategies, and how it could help them get the work done. Now, the other aspect to this, I also see, is that when we consider the overall India market, I think traditionally the customers that have the programs that are really live right now, are global engagements.

These are global, multi-country engagement, where India is one component of that entire deal. The shift I've begun to see is local RFPs, local customers, when I say local, I don't necessarily mean India-born and -bred organizations, I also mean global multinationals where India is a very large profit center, a strategic decision-making unit, and is able to call the shots and wants to do things that is best for them. I see a trend, in terms of uptake of interest levels and moreover the customers of the past, within our sponsor organizations, they move to newer organizations. They have seen this work, so they take it to the next organization that they go. So I think a lot of that has accelerated over the last few years in my mind.

Sameer: Yeah. I think that's a great point. It has. And there's a lot more acceptivity of the program and the value realization that is kind of we're looking at.

Naveen: Awesome. So moving to the next question. I think one of the biggest pet peeves of any large engagement is setting up the program for success. Is it going to deliver to the promise? Is it going to go live on time? Are we going to get the kind of results we were looking for, as a part of the solution engagement? I think there are a lot of these questions that keep running in our buyer's minds. So in your experience and in your view, how do we set up an MSP program for success in India? And when I say this, I also include the technology component of it, of course. And what are the key focus areas and obstacles to overcome?

Sameer: Yeah, that's a great point. I think from a technology perspective, right? Speaking about technology perspective, it has a lot to do with understanding the current processes, configuration, the data that the client has, right? Making sure that we capture all the key components of the program, which can be then replicated into the VMS, right? And then looking at the integrations, the technical ability, the client, and the technical resources they have at their disposal, and then, of course, working hand in glove with the MSP, right? To put a great solution in place, which can then meet the requirements of the client. So, of course, there are a lot of other things involved from a program and management perspective, which I think perhaps, maybe you might want to talk about more, because I'm sure you have a lot more experience in that area than I do.

Naveen: Of course, you're absolutely right in what you said just now, in terms of the technology play and how it influences the way it is... A successful program really gets structured. From my point of view. I think the program life cycle, after around two dozen programs, having been set up and run, I kind of could comfortably classify the first three years’ journey of any MSP program into adoption, in year one, optimization, in year two, and transformation, year three onwards. So I think when we look at program adoption and change, these two are the most significant. I would say, this is a number one priority to focus on for any global customer rolling out their contingent labor programs in India or any customers in India who wants to embark on this journey. I think the understanding of program adoption and change management is absolutely paramount.

I have seen programs not lift off the ground for a good 12 months to 24 months to even 36 months, because the initial planning around these two areas, were not done thoroughly and sufficiently. So when I say this, I typically mean executive leadership and stakeholder buy in. Executive leadership, of course, is the C-suite, but also functional heads, HR heads, finance heads, legal, administration, and real estate, and facilities, so on and so forth. So many different entities, so many different functions, have a part to play when we implement a program like this, right. And getting their buy in, is absolutely paramount, even before embarking on that journey.

The second aspect I feel and is absolutely important to consider is supplier adoption. It's the basic tenet, right? There's no MSP program, if there's no supplier, so adoption becomes of significant importance. And in fact, it's like a deal breaker if adoption doesn't happen the way it's originally designed, because at the end of the day, a lot of these suppliers have legacy relationships with customers. And we definitely do not want to be the cause for disruption, we want to be the one that enables the change and makes it smooth. So making sure that supplier buy-in, the supplier education, what's in it for them, right? What merits are they going to receive by being a part of a program like this? For example, we could radically reduce their sales costs, right? For example, in our organization, we have multiple MSP customers. So it's almost like you have a single-entry point for different opportunities. So that's going to be a significant impact on their overall sales costs as well. So kind of articulating to them, what's in it for them and what are the guardrails that this program now is going to draw up, as a part of the engagement, and being very communicative and sometimes even over communicative, I think is absolutely important for successful supplier adoption.

And the third and the most important, which I think you already covered. So I won't kind of dwell on it further, but the ease of use, the end user experience. Something as simple as, can I access these things on a mobile phone, right?" You know, can I make it like click off a button? Could it be a one click solution? Are the integrations easy to do, right? I think these are considerations that have to be mapped out up front and in my mind, these are three areas, if done really well, can ensure an extremely successful setup for any contingent labor program, in this market. And, of course, the golden rule of 80/20, where we need to look at 80% standardization, because a lot of these are standardized programs, but allowing for that 20% of customization, localization and providing for the must haves that are important to that reason, I think that's absolutely paramount.

Sameer: Yeah, that's absolutely right. I think being able to localize for the requirement regionally. And it can boil down to different locations in India itself, for instance. That is absolutely key, I think, for sure.

Naveen: Great. So what are the key considerations while choosing a VMS technology, for a reason like ours, right? It's a complex market. We are a technology hub, so we have our own view of what technology should be and look like, but what cues from the market should we be listening to, in the context of a VMS?

Sameer: I think if I were to choose one aspect, right? It'll all boil down to configurability. As we just touched upon earlier, right? You're looking at different clients, different regions might have different requirements, right? And the same organization. And we've seen that a number of times, right? And it can also be even the kind of integrations that they have with different suppliers and how the basic invoice calculations are done. So and that, to have a successful program from a technology perspective, you need a VMS. We can meet those requirements, right? Which can be adapted for the regional requirements. And this is where the latest tech stack comes in. The VMS today, which are built with the latest tech stack, can easily meet this requirement and rolling it out, made with the reliable changes, can be done very quickly. 

Naveen: Okay. Moving on to the next one, an interesting question here, Sameer. MSP and VMS solutions have typically been a function of a global rollout with India, as a component to it. Based on your experience and based on what you see now in your current role at Simplify, do you see the potential for customers in India? Or do you see a trend in India to stand up in-country standalone programs that brings in the global best practices, but weaves in the local flavor of what they need in the region?

Sameer: Yeah, that's a great point actually, Naveen. So today, absolutely, I mean, I have proof points, right? I have clients regionally, who are expanding globally from India. So reverse engineer MSP programs, if you will. And borrowing a term from the excellent book, Conquering the Chaos by Ravi Venkatesan, right? Who headed Microsoft in India previously. We're looking at a glocal approach, if you will. Glocal in terms of global processes, which are rolled out and employed locally with the local flavor, to meet the local requirements. And like I said, companies which are working with us, we have rolled out these global programs from India and they're working quite well. What are your thoughts? It'll be interesting to understand that from an MSP perspective.

Naveen: Yeah, absolutely. And this is, to be honest, quite an uncharted territory. We are a growing staffing market, we all know the stats on how we have been growing year over year, especially over the last decade, how the staffing market has really boomed and that trend is going to continue. But I also see that there's been curiosity, there's been interests. 

So many times there are different ledgers and terminologies used for what is an MSP solution. And sometimes people confuse a master vendor solution as MSP. Someone confused a direct sourcing solution as an MSP. Sometimes they have different solutions structure like a vendor premise, and then they call them MSP. So what happens is I think getting that definition right and educating the customer, educating the buyer, educating this market is, I think, our responsibility and we definitely need to embark on that journey. However, if that education piece is addressed, I think we have a market waiting to boom here.

Naveen: Great. So with that, we are moving to our final segment, right? And that's to kind of talk about the present talent market, the latest talent technology scenarios, and to kind of get a crystal ball view from you of what you see happening in the future. Given what we are witnessing, in terms of the current workforce and talent trends, the great resignation, the COVID impact, purging demand for talent, how can this powerful combination of MSP and VMS help customers solve their talent challenges?

Sameer: Yeah, that's a great question, Naveen, and obviously we've given it a lot of thought and I'm speaking to a lot of talent leaders globally. Especially coming out of COVID today, right? A lot of organizations are not sure what the business environment is going to entail, right? Especially when it comes to talent. What are the talent strategies they'll need, in order to succeed in this new world post COVID? So using an MSP/VMS combination, I think this gives them an option to try various solutions. For example, now you have the ability to scale up or scale down quickly with the talent you need globally, using this powerful solution, VMS/MSP solution, right? So if you put that together, I think we are giving the clients today the option to actually try out strategies, implement strategies, and then decide how they want to move on further, because it's not taking that much time or effort to do that. And this is where an MSP/VMS solution is offering a lot of value. What do you think, Naveen?

Naveen: Yeah, I do agree with you. And I think what we could, combined, bring to the table, is an extremely powerful value proposition of looking at staff augmentation spend, and SOW spend, gig worker spend, consolidating all of it in a central place, creating that opportunity for visibility and access and for providing insights into the labor markets and enabling those conversations. I think the operational and the tactical side of it, it's kind of pretty much established, there is a certain playbook on how it is done, but I think it's about those conversations that we are having with our customers on how do we solve the core problem that they have, and that is getting work done.

Sameer: Yeah. Spot on.

Naveen: Fantastic. So we'd like to end our episode looking for your insights on few years down in the future, if you had a crystal ball view of what's to come, what do you think this industry will look like? What phrase would you coin for the next big thing in our industry?

Sameer: Yeah. That's a million-dollar question. Isn't it, Naveen? I mean, I think you are obviously going to see technology pay a huge role, as we move forward, especially AI. For example, you've seen how advanced a virtual assistant technology like Alexa have come forth, right? So over a period of time, you're definitely going to see the technology platforms coming together, for example, VMS utilizing multiple data platforms. It is already doing it today. To some extent you're getting market analytics, you're getting benchmark information rates, and so on. This is going to just further move forward and you're going to see amalgamation, if you will, of AI, putting all this together, where virtual assistant will probably interview the candidates, line up the candidates and share a profile with their remarks to the hiring manager. You're definitely going to see a much more usage of direct sourcing as well, moving forward. And, again, it's all going to be AI-driven and you know, how it comes out, I think it's anyone's guess at this point in time. I think COVID obviously has given us a platform to further utilize technology to offer more value to clients. As far as coining a term for the next big thing is... Wow, I haven't really thought about that actually. Why don't you answer this question or you add some value here and let me think about the term I would use?

Naveen: Absolutely. Sameer, so spot on, you hit upon a lot of those crucial elements on how the industry's evolving and how the market's changing. I think from my point of view and whatever I see from the crystal ball view, I think it all depends on the timelines and the stage of maturity each region or each country is in, in their life cycle or in their consumption of different forms of talent, but if I were to just look at it clearly and say, "What does it mean from a customer lens?" I think to my earlier point that I touched upon, I think there's going to be blurred lines now, between the types of work that gets done. I think organizations are going to begin to look at, how do we get the work done? How do we get the talent that we need and not get bogged down by definitions, regulations, limitations and so on and so forth, but rather focus on getting the product to market or the speed to revenue or overall achieving the business impact?

And I would say universal workforce solutions would probably be the next phase of our evolution as an industry. So whether a customer wants to hire full-time headcount or contingent headcount or they want to outsource a piece of work or they want to engage the gig economy, the focus will not be as much about the mode of engagement, as much as it is about getting the work done, with the right talent, at the right price point. So I think that's a good phrase to coin, universal workforce, and that's what we look forward to and that's what we are going to be keeping our eyes on.

Sameer: Okay. In the meantime, I came up with the talent acquisition 5.0, but I think universal talent, sounds much better. So I'll take that.

Naveen: Awesome. So, Sameer, thank you. It was a pleasure speaking with you and exchanging perspectives, ideas, and your industry knowledge. We look forward to meet with you soon again, to share more such insights and thank you for your time and we'll speak soon.

Sameer: Thanks a lot, Naveen. It's been a real pleasure and I look forward to speaking with you soon again. Cheers.