The vendor management system (VMS) market for VMS software is expected to grow next year at a faster pace than in pre-covid times. A new report - published in Everest Group report found that the vendor management system market is expected to grow between 7 to 11 percent by 2023. We believe this means two things. Firstly, organizations are set to utilize the contingent workforce more than ever before over the coming years. Secondly, businesses now understand just how important a vendor management system is when it comes to fulfilling workforce goals, especially when taking into consideration the huge effects the “Great Resignation” is having.
In this blog, we take a quick look at what a VMS is, how VMS software brings benefits to an organization utilizing the contingent workforce, and we look at why the Everest Group report expects VMS usage to increase by 2023.
What is a VMS?
A vendor management system, also known as a VMS or VMS software, is a software application that helps organizations manage and procure externally-sourced workers as well as manage the staffing agencies they source them from.
As businesses increasingly leverage the contingent workforce to fulfill their workforce requirements and access a range of benefits, vendor management systems are becoming a crucial component of how organizations manage their externally-sourced workforce.
To keep up with the evolving nature of contingent workforce programs, vendor management systems have enhanced their functionalities in recent years to keep up with new techniques such as direct sourcing.
According to the Everest Group report, temporary workers, sourced through staffing agencies, account for 60 to 70 percent of spend under management by VMS providers. As employment requirements change and the use of contingent workers increases, there has been a rise in other categories including services procurement or statement of work (20-25 percent) and independent contractors or freelancers (10-15 percent).
What are the benefits of VMS implementation?
Managing the contingent workforce is complex. Companies that use manual spreadsheets or Sharepoint-like websites soon find themselves lacking the visibility and control they need to run a successful program.
When these management processes are used, businesses soon run into challenges such as rogue spend, inconsistent hiring, poor staffing vendor decisions, inefficient processes and low-quality talent being placed into the organization.
A VMS can help mitigate all of these risks, and provide companies with a seamless way to manage their contingent workforce. The benefits of using a VMS include:
- Reduced vendor risk through strategic staffing agency performance analytics.
- The ability to standardize hiring processes and rates across your entire business.
- Gain complete visibility and control over your contingent workforce program.
- Centralize and consolidate all data so multiple files of the same record aren’t being created.
- Gain internal efficiencies by automating manual processes.
Why is the use of VMS expected to increase over the coming year?
The report found that while buyers expect to achieve all three benefits - cost, operational and business impacts - from VMS adoption, they are currently the most satisfied with the operational impacts delivered by their VMS software.
The majority of buyers praised their vendor management systems for “ease of use”, but they also wanted to see improvements when it came to analytics capabilities and reporting functionality.
The report states that VMS vendors are working to develop end-to-end candidate management capabilities, including compliance and shift management; leverage next-generation artificial intelligence (AI) and machine learning (ML); develop strategic partnerships with other vendors; and provide holistic insights leveraging multiple data sources.
Are you interested in learning how a vendor management system can enhance your contingent workforce management program? Book a demo with Conexis VMS today. Conexis VMS is the easiest vendor management system, built on the latest technology and designed with the user in mind.
Interested in learning more about Vendor Management Solutions?
Whether you are looking for a new VMS Solution, or just getting started, we are here to help. See how easy Conexis is to use by taking a quick 2 minute Self-Guided Tour. Contact Us for a Free No-Obligation Consultation to discuss your workforce challenges (and get immediate actionable insights) or Book a Personal Demo Today!
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