Managed service provider (MSP)

MSP definition

A managed services provider (MSP) is an outsourced third-party company that takes on the ongoing, daily, managerial, and maintenance responsibilities for another company (the customer). The MSP and the customer sign a contract with a service level agreement defining the services’ expectations and quality metrics.

MSPs can take on duties for teams like:

• Payroll
• HR
• IT

MSP vs BPO

Both MSPs and BPOs help managers complete tasks and focus on core strategic tasks. Here’s how they differ:
Some MSPs are more comprehensive in their offerings than BPOs, often getting into more detail. For example, if a company has a contact with a managed service provider to oversee payroll, they would work closely with payroll MSP on creating a customized plan based on the business’s needs.

The payroll expert would also take over payroll responsibilities the business can’t perform, such as streamlining the payment process, coming up with cost-effective solutions, and improving payment accuracy.

BPOs can also be short-term solutions for companies that need help with a specific problem, while MSPs are continuous resources for the company.
Other differences include:

• Cost: BPOs can depend on performance pay, and MSPs use an upfront cost
• Support: BPOs complete their tasks, but may not be as active in looking for innovative strategies for the company as MSPs

What are the benefits of working with an MSP?

• A dependable cost model
• Guidance from experts who know the latest trends and technology
• Increased efficiency
• Reduced risks and liabilities
• Lower overhead costs

What can a global worker payments MSP provide?

Many global businesses use worker payment MSPs to handle worker payments and payroll. Here’s what they provide:

Streamlined payment process

MSPs can help businesses automate payment workflows to reduce manual effort and speed up payment cycles.

Cost-effective solutions

MSPs can lower transaction fees and get optimal FX rates to reduce the cost of global payments.

Enhanced payment accuracy

The ability to program automated calculations and built-in validation checks ensures workers are paid the right amounts.

Flexible payment types

Payment experts can easily navigate paying full-time employees, contractors, and temporary workers across a global workforce.

Automated tax management

A reputable MSP knows how to remit taxes and social contributions to the right authorities in every jurisdiction, in local currency to comply with regulations.

Detailed reporting

Along with other tasks, some MSPs provide comprehensive reports on pay-ins and pay-outs to empower the business to make informed decisions about resource allocation and other strategies.