When the economy softens, third party mediators aggressively prey on organizations just like vultures on road kill.
Most commonly referred to as Vendor Management Services (VMS) and Managed Service Providers (MSP), they promise big savings by negotiating with a company’s vendors for pricing.
Very tempting during slow times, but is it really a value added service?
With the number of VMS’s and MSP’s growing, companies often must work through multiple software tools and processes. This complexity has created significant challenges for the staffing industry. The result has been confusion on the part of clients and staffing firms alike.
If VMS’s and MSP’s negotiated lowest pricing on tangible objects the process would make sense. However, they negotiate lowest pricing on intangible objects, like service. They dilute the partnership between the service provider and client, causing performance levels to suffer.
Once again, you get what you pay for. When a corporation enlists a third party to come between them and their service provider it creates friction.
Service providers are either forced to cut corners (in attempts to shave prices) or told to hit the road. Many times a long-standing and mutually rewarding relationship is damaged or terminated -- the end client gets poor service, and everyone but the third party provider ultimately loses.
These are just a sample of the risks associated with running service oriented transactions through an intermediary company.
For more information visit the American Staffing Association Web site, americanstaffing.net.