Are you considering whether your company requires a VMS or an MSP to assist in managing your contingent workforce? This article examines how a managed service provider (MSP) and a vendor management system (VMS) can collaborate to enhance your management program.
Are you still using manual spreadsheets?
Relying on manual spreadsheets for managing your contingent workforce can result in internal inefficiencies, lack of centralization, human errors, disjointed processes throughout your organization, and insufficient insights into vendor performance. This situation can lead to hidden costs, unapproved spending, and a total lack of transparency regarding your non-employee workforce and the performance of your staffing agencies.
You have the chance to tackle these issues with effective management solutions that provide your business with clear visibility and control over your vendors, resulting in enhanced workforce quality, reduced expenses, and ultimately, increased profits.
If you're just beginning, it's important to understand the distinction between an MSP and a VMS, and how they can work in tandem.
What is an MSP?
A managed services provider (MSP) is a company that assumes the responsibility of managing your entire non-employee workforce. This involves outsourcing the complete management of non-employee workers and staffing agencies to an external provider, rather than having it handled by your company’s HR or procurement department.
An MSP handles all aspects of managing your contingent workforce and staffing agencies, including sourcing workers, managing vendor relationships, evaluating vendor performance, processing payments, and more.
MSPs can be either vendor-neutral or not. Some managed services providers recruit contingent workers from their own pre-approved database of staffing agencies, while others do not have exclusive ties to specific staffing agencies.
What is a VMS?
A vendor management system, also referred to as vendor management software, is a web or cloud-based platform designed to help companies manage, automate, and centralize the oversight of their non-employee workforce in one place.
A VMS automates all tasks related to managing your contingent workforce and its vendors, covering essential processes like sourcing, onboarding, time tracking, approvals, payments, and more. This automation saves your organization significant time and greatly enhances internal efficiency.
Beyond automating these tasks, consolidating a non-employee workforce program provides strategic insights into its performance. It offers companies clear visibility into vendor performance, identifies areas of unauthorized spending within their non-employee workforce program, and assesses whether staffing agencies are meeting set targets.
To learn more, you can read:
- What is a VMS?
- How Does a Vendor Management System Work?
- What are the Benefits of a Vendor Management System?
VMS or MSP? Which is the best option?
It's crucial to understand that an MSP and a VMS are not fundamentally different solutions; rather, they represent alternative approaches for managing your contingent workforce program. Utilizing a VMS internally simplifies the management process, whereas an MSP handles the process externally, allowing your internal resources to focus elsewhere.
MSPs need a VMS to manage your Contingent Workforce
If you are a larger company, it's likely you have a managed service provider. The managed services provider will use a vendor management system to manage your contingent workforce on your company’s behalf. In today's world, some MSP have an existing relationship with a VMS and in other situations, their client's may have their own VMS that the MSP will partner with. For many organizations an MSP brings extensive VMS experience, and could offer additional talent pools necessary for agile growth, along with strategic consulting.
To learn more, you can read:
MSP vs VMS: What's the Difference?
Smaller Companies may choose to manage their workforce internally with a VMS
A VMS is often selected by organizations with smaller contingent workforce spend or who choose to manage their contingent workforce internally.
As an organization with smaller temporary staffing spend, anywhere over $3 MM - should have a VMS, can realize huge benefits from the implementation of a vendor management system without going the outsourced route.
Interested in learning more about Vendor Management Systems?
Whether you are just getting started, or looking for a new VMS. Contact Us. See how easy Conexis VMS is to use with our quick 2 minute Self-Guided Tour. Contact us for a free no-obligation consultation, or schedule a Personal Demo.
About Conexis VMS
Conexis VMS is the world’s most modern vendor management system, built on the latest technology and designed with the user in mind. Conexis stands out from other VMS solutions due to its unique functionality and features such as open APIs and flexible data solutions which allow our customers to create fast, easy, and cost-effective integrations, that can be done in under a week, compared to the legacy systems, which have to custom code each one.
We are also leading the industry with our white-gloves customer care, our pricing and our fast implementation. With our market-leading work shift, scheduling, timekeeping, and credentialing capabilities, Conexis is the only VMS that can handle all skill categories without clunky third-party add-ons. Learn more about our company and our award winning VMS Software.
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