Ask any Procurement officer who has ever gone out to bid for a Managed Services Program (MSP) and/or Vendor Management System (VMS) about the experience, and you will most likely hear words like “due diligence” or “comprehensive”. What this translates into is a lengthy process in which a group of potential vendors answer hundreds of questions, do presentations and demos, sharpen their pencils to generate “best and final pricing”, and provide references. All of this is factored into the selection of a single MSP and/or VMS. With such an exhaustive approach to vendor selection, why is it that when we check in months later we often find that the system is not yet implemented and the program is not yet operational? All too often, the root of the problem is the absence of complete buy-in from all constituents to the notion of a MSP/VMS program.
We’ve all heard the old saying, “Failure to plan is planning to fail.” It certainly applies here. At the outset, it is good to know where you are and where you want to go. As with any decision in business, a lot of questions will have to be asked as well as answered before pursuing a VMS or MSP partner. But the most important questions to be answered are, “Who wants this program?” “Who Doesn’t?” “Why or why not?” When surveyed, MSP and VMS firms cited the following pitfalls leading to implementation problems:
In reality, all of these typical excuses for implementation delays and problems stem from the inability to answer those questions. Before beginning the vendor selection process, invest the time needed to develop a shared internal view of the strategic importance of the program. At a minimum, you must be able to agree on why the program is being initiated and what its goals are. Limit yourself to no more than the two or three most important goals by asking, “What must the program achieve for us to consider it a success? How long are we willing to wait to see these results?”
The answer to these questions will identify which executive should serve as the program sponsor. As is true with any change management initiative that touches many groups within an organization, the absence of a proactive executive sponsor will guarantee the death of the program. This individual must serve as an advocate, maintaining momentum, removing obstacles, and continuously reminding all constituents of the benefits of the program.
Identify concerns early on, and honestly address each issue. Constituents who don’t have a voice in the program design will not be engaged and – worse case – may quietly undermine its efforts. Each affected group in your company should be given an opportunity to express their concerns, and your program should be designed to explicitly derive incremental benefits for each group. Be sure that the vendor selection process includes active participants from all involved functional and regional groups.
Determine where the program fits into the Company’s strategic agenda. Identify other strategic initiatives that may compete for the same resources. Schedule these initiatives accordingly.
Remember that the interests of your supply base must be protected. Evaluate the potential impact that the program will have on your suppliers, ensuring that the program is designed to offer incentives for your best suppliers to participate.
Know where you are starting from. It’s hard to make a business case for a new initiative if you have no idea of your current spending. How much is spent? Where? Go beyond financials to consider your risk profile. What exposure do you currently have to issues such as co-employment or misclassification?
At this point, you should be ready to go out to bid. In our experience, companies that provide the most information to potential vendors receive responses that are truly custom-designed to meet the client’s needs. In structuring a request for proposal, focus on specific questions that get to the heart of your objectives. Challenge the bidding vendors to explain how they will help you build a program that is embraced across the enterprise.
Once a selection has been made, establish a governance structure for program implementation, defining roles, business reviews, issue resolution processes, and planning sessions. Use online tools to encourage collaboration. Define critical milestones, and metrics for measuring progress towards each. Finally, remember that in every change management initiative there will be bumps in the road. Be prepared for them. To quickly get past them, keep your executive sponsor informed and involved.
If you have recently implemented an MSP or VMS solution, we’d like to hear your story – good, bad and ugly!
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