8 things to consider during MSP expansions

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As organisations expand, relocate or seek new efficiencies, many look to expand their Managed Service Programmes (MSP) to help address their needs in different regions. This can be an effective strategy, as the right MSP providers will have extensive market knowledge, an understanding of cultural and regulatory landscape and on-the-ground presence.

However, no two countries or regions are the same. When organisations expand their Managed Service Programme (MSP) into new countries or regions, they’re bound to come up against a wide range of unique challenges and considerations. Added to this, there are also a number of macro drivers which are likely to emerge, regardless of the country or region in question. Let’s take a look at eight of the things organisations should consider when expanding an MSP globally.

1. Replication is easier said than done

If you have a successful MSP in one region, it’s common to want to replicate this success elsewhere. However, it’s not always so straightforward. From country to country, and region to region, technology, local business practices, employment legislation, corporate cultures and financial requirements can vary dramatically. As a result, the successful MSP that’s operating in North America or Europe may not easily translate into the Asia and Latin America markets. Each implementation must be considered in its unique context.

2. Understanding and addressing cultural differences is essential

The single biggest challenge faced by new MSP implementations is operating within the business culture. Whether it is understanding the legislative landscape in Japan, privacy in China, traditions in France, immigration in the UAE, supplier loyalties in India, or local norms in Brazil – all MSP stakeholders must understand the unique complexities of country-specific labour regulations. But this won’t happen overnight. Everyone should be prepared for the time and effort that will be necessary to build local support and implement change-management strategies.

3. Challenges emerge when cost objectives are the sole driver of expansion

MSP programmes often expand when procurement functions seek greater cost savings. However, this is not always the reality of MSP expansion. Some countries require pay parity between contingent and permanent workers, which may impact the ability to replicate cost savings. Other markets may not have the headcount that’s required to reach economies of scale. Successful MSP expansions are typically driven by other goals, in addition to cost savings.

4. Global workforce visibility is an increasingly important concern

Companies want more visibility over their global workforce. This may be driven by a desire for risk avoidance and compliance validation. Or it can be a matter of wanting to better understand the available resources. Whatever the reason, complete workforce visibility can only be achieved when there are consistent data collections and reporting systems in place across all geographies, to allow an organisation to fully understand its global presence.

5. Technology alignment is an important consideration

In most expansions, MSP technology will need to be aligned with the existing tools used in that particular market. In mature markets, back-office tools can be complex and wide-ranging, making expansion a complex process. In development markets, similar technology concerns can emerge too, often due to a lack of sophisticated VMS tools. In both cases, it’s essential that organisations appropriately plan and allocate resources for technology alignment efforts.

6. MSP expansion is integrated into strategic workforce planning

Successful MSP expansions are built into broader strategic workforce planning efforts. HR leaders, procurement teams and MSP providers must collaborate to extract the right data and insights from different regions, build forecasting capabilities, and align workforce needs with workforce availability. Everyone must be at the table and involved in strategic planning around MSP expansions.

7. MSP market maturity impacts implementation

Ahead of expansion, it’s important to understand the availability of potential vendors in the region, as well as the availability and structure of existing MSP programmes. After all, MSP models are well established in North America, Europe and Asia-Pacific, but they’re just emerging in Latin America, the Middle East and Africa, and this will impact implementation. Added to this, market maturity can significantly vary within a given region, too. For example, while we have seen the introduction of MSPs in Mexico and Brazil, they’re virtually unheard of in Peru.

8. Change is the only constant

No matter which region is being considered for expansion, organisations should expect the unexpected. Changing regulatory environments, geopolitical forces, immigration and refugee movements, and political and economic shifts can significantly impact the available workforce in a given country or region. Naturally these cannot always be anticipated during MSP planning, but it’s prudent to develop systems that can accommodate the unexpected.

Managed Service Programmes must adapt to the unique dynamics of the countries in which they operate. In some cases, this could mean a truly global solution. In others, it could involve a regional implementation operated out of a central location. Or, where the size of the programme and available infrastructure warrant, it may mean local, on-the-ground deployment.

To learn more, download our whitepaper Small World, Big Differences: Regional Perspectives on MSP, or visit our Managed Service Programmes page to learn more about how TAPFIN, ManpowerGroup Solutions can help.