Implementing a managed service which incorporates consultancy spend

James Bridgland, Managing Partner for Consultancy+, discusses the implementation of managed services and the benefits of allowing for consultancy spend within a managed service programme (MSP).

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Organisations are now commonly considering adopting a managed service programme incorporating consultancy spend within that budget. Doing so gives them access to all their non-permanent resource under one banner, with standard contract terms in place – a streamlined solution. It also allows them to look to gain governance and visibility over an area of spend that has historically been unmandated and uncontrolled.

It helps to ensure all compliance is effective, management information reports are efficient, and gives you and your business complete visibility and control of what you are spending.

Risk can be a heavy burden for businesses to carry, especially when it comes to something like managing the IR35 changes that came in to force across the board (with the addition of the changes for the private sector) last year. Many businesses will have a top-level view of a problem but communicating changes in policies and procedures to all stakeholders, across multiple departments and geographical locations, can sometimes be challenging and chaotic - bringing with it a lack of control.

Putting in place a managed service with consultancy spend gives you the opportunity to gain back control. It will give you the confidence in knowing you have the right processes in place and that you’re communicating with the right people on your strategy around things like IR35 – mitigating risk and making the process much more efficient.

Consultancy spend also has tangible operational benefits. You may - rightly so - get frustrated when projects aren’t well managed, overrun and go over budget. Consultancy and managed service gives you oversight of a project, allowing you to see what is happening at any one time. You will have real-time data at your fingertips to ensure your project is successful.

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The benefits of using one supplier for your MSP and consultancy spend

It’s not always the right thing to do – it depends on the organisation, its objectives, and the maturity or resource capacity of the procurement and PMO functions.

When looking at deciding on what engagement route to follow, one of the major advantages of using one supplier is impartiality. Sometimes it can be difficult for businesses to define when they need a contingent (also known as temporary) worker, when they need to look at a contractor, and when they would benefit from outsourcing. So, a big part for anyone looking for a managed service with consultancy is choosing a provider that offers a triage service.

Working with one supplier that assesses your needs, goals and objectives, and determines which route your project should follow will ensure the best outcome. Partnering with a single provider also means that you have neutrality when it comes a project, there is no vested interest, and your provider will support you in making the best decision for your organisation.

Finally, it allows your organisation to consolidate control, not only from a process point of view but also with invoicing. You can also best leverage your buying power, getting the top rate for the work being carried out, as it offers a more efficient and effective commercial arrangement.

When an MSP incorporating consultancy would be needed

This ties in with control and visibility. Your organisation may be faced with a financial, operational or procurement challenge and you may feel that there isn’t any control over that area of the business. For example, someone serves a public sector organisation with a freedom of information request, but it can’t find the information to fulfil that request – in this type of scenario, you could benefit from having a managed service provider in place providing you this type of MI.

Secondly, if your organisation feels like it is overspending on external service providers and you haven’t seen a return on investment, the project has overrun, or you are using the same suppliers endlessly – this is a tell-tale sign that you need to change that behaviour and look to new processes that are streamlined, and more consistent.

Additionally, many organisations are still concerned about the IR35 legislation and their management of the processes surrounding it. So, a provider that can help you categorise spend, make informed and accurate determinations, contract effectively through the chain, and provide visibility and compliance around delivery of work and working practices, is going to serve a lot of value to you.

The types of consultancy services that can be bolted-on to an MSP

Most types of consultancy services can sit with an MSP well. My favourite example of a consultancy project we have completed involved engaging a whale bone excavation specialist – but this is an extreme example, and most are more traditional. We have also done a lot of work with the public sector around social care and have worked on commercialisation and development projects. But predominately the consultancy services companies would look to bolt-on are professional services with IT, HR, finance and commercial, along with advisory services that cover all areas in which external expertise is required. The key is that it is a service being delivered, not supply of labour.

Why businesses may need consultancy spend as well as an MSP

Consultancy is different from contingent labour and recruitment in that with contingent labour there are pockets of sporadic spend but a lot of it is quite cyclical, it may go up and down slightly but generally, it won’t vary too much. Consultancy on the other hand, is often one-off buys, can be high value and there's generally a business case that supports the need for the service – it also has set metrics – so return on investment can be measured.

Where this solution supports a lot of our clients who already have an MSP with us is giving organisations and their service users the options they want. They come to the table and say “we have a challenge” – we can then advise them of the best route to take to ensure the greatest outcome is achieved.

Having consultancy as a bolt-on to a managed service really does give you a full range of options. It also ensures your company has access to a triage service - informed by data and expertise - to ensure the right solutions are chosen.

You can incorporate consultancy into any MSP model – whether it be master, neutral or hybrid vendor. What is key with both services - for them to work hand in hand - is triage. For any company looking at whether it needs an MSP or consultancy, or both, it’s vital it works in partnership with its provider to thoroughly assess its requirements and ensure the solutions on offer fully meet business strategy - enabling growth, cost savings and an easier-to-manage process.

If you would like any help and advice on consultancy or managed services, get in touch with one of our experts now.

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James Bridgland
Consulting & Solutions Director

James Bridgland leads our consultancy business. James has over 10 years' experience in delivering projects and services to clients across a number of areas including: HR and organisational change, IT transformation, and remediation and compliance.

Across this experience he has worked with clients ranging from UK based SMEs through to global blue chip organisations, in order to support the delivery of outcome based consultancy and work package solutions.

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