Vendor Management Software is crucial for organizations to strategically and efficiently manage staffing agencies and contingent workforce. With many systems available, how do you choose the right one? This blog will explore what a VMS is, its benefits, and key factors to consider when choosing the right VMS for your organization.
What is a Vendor Management System?
Let's begin by briefly understanding what a vendor management system is...
A vendor management system, often referred to as VMS or VMS software, is a software platform that enables your business to acquire and oversee the complete lifecycle of contingent workers and staffing agency services.
By consolidating and automating your externally-sourced workforce program into a single platform, a VMS provides functionalities that allow you to engage with staffing agencies, acquire contingent workers, hire permanent employees through staffing agencies, assess vendor performance, track payments, and manage various other processes related to your contingent workforce.
A VMS collects and stores all the data necessary to meet your workforce needs and foster more strategic relationships with staffing agencies.
What advantages do organizations gain from implementing VMS software?
By integrating a vendor management system into your contingent workforce program, your business can experience significant benefits, including:
- Achieving full transparency of your contingent workforce.
- The capability to oversee and evaluate the performance of your staffing vendors.
- Enhanced efficiency through streamlined organization and automation.
- The ability to accurately classify externally-sourced workers and ensure compliance.
- Exerting control over contingent workforce expenditures.
- A unified contingent workforce management approach that standardizes rates and vendor interactions across your organization.
- Lowering workforce costs.
- The integration of staffing agencies into a single centralized platform.
Top questions to consider when choosing a VMS solution
There are a number of vendor management systems out there, many of which have complex functionalities and are designed specifically for enterprise organizations. Yet, despite this, most organizations are managing smaller volume contingent workforces and these more complex systems are simply overboard.
With that in mind, here are some of the top questions to consider if your business is looking for a VMS that will help you better manage your smaller volume contingent workforce.
How much does a VMS cost?
The majority of vendor management systems are priced based on a percentage of contingent workforce spend. When priced that way, a VMS can have a significant impact on your bottom line. For companies with smaller volume spend, we recommend looking for a solution that charges a software licence fee, as this will typically be a more cost-effective option.
What functionalities do you need?
To manage your contingent workforce it’s possible that you may need more complex functionalities, but most organizations (especially those with smaller volumes) can get away with less functionality. In fact, the functionality of most VMS software solutions make it complex, time-consuming and inefficient for companies with smaller volumes of contingent spend. Instead, look for a scaled-back solution with functionalities such as vendor consolidation, process automation, vendor guidelines, program centralization, and vendor performance data. This is likely all the functionality you’ll need for a successful contingent workforce program.
Do you need to manage permanent hiring through staffing agencies in your VMS?
Some vendor management systems only allow you to manage contingent workers, others allow you to manage all externally-sourced workers while others operate as total talent management platforms for your entire workforce. Consider which type of workers you want to manage in the VMS solution you choose.
How long will VMS implementation take?
Implementing any new platform into your business processes can be daunting. The more complex the system, the more daunting the task will be. Before implementation, make sure you properly define the goals you want to achieve within your contingent workforce program and when you want to achieve them. Some VMS implementations may take a reasonably long time, while others are seamless and can be done in a matter of days. Weigh up your company’s objectives and VMS implementation time to find your optimum ROI.
How do I choose the right Vendor Management System?
With so many options in the market, it's important that you choose the Vendor Management System that is right for your company. That's why we created the Ultimate VMS Buyer’s Guide.
Included in the Guide is a 20 Page VMS Buyer’s Checklist that details all of the questions to ask a VMS Partner during your assessment: Functionality, Cost, User Experience and Partnership. It also includes a way to compare different solutions, so you can find the best VMS Partner for your organization.
Whether you are looking for a new VMS Solution, or just getting started, The Ultimate VMS Buyer’s Guide and Checklist will take you through the VMS Buying Process one step at a time.
Click below to get your free copy today.
Whether you are looking to change your VMS solution, or just getting started, we are here to help. Contact Us for a Free No-Obligation Consultation to discuss your workforce challenges (and get immediate actionable insights). See how easy Conexis is to use by taking a quick 2 minute Self-Guided Tour, or Book a Personal Demo Today!
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