A Vendor Management System (VMS) is a Centralized Hub
A VMS will centralize, automate and consolidate your entire contingent workforce processes in one easy-to-use software solution. This tech solution will allow you to manage vendor relationships and measure vendor performance, as well as procure, manage and pay non-employee workers sourced either through a staffing agency or another sourcing avenue.
Essentially, a VMS acts as a centralized hub where businesses can:
- Procure and onboard contingent workers,
- Manage vendor performance,
- Track time, invoices, and costs
- Gain data-driven insights into their extended workforce
By replacing manual processes with automated workflows, vendor management systems save time, reduce costs, and increase visibility across the entire workforce lifecycle.
By acting as a system of record for your company’s contingent workforce, a vendor management system will capture and store the data you need to make better vendor and hiring decisions in one centralized location (as opposed to being fragmented across your entire organization.
How Does a Vendor Management System Work?
A VMS connects all the moving parts of your contingent workforce program in one platform. It serves as the system of record for all vendor and worker data - ensuring accuracy and efficiency.
Typical VMS features include:
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Requisition and approval workflows for job orders
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Automated onboarding and compliance management
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Time and expense tracking for non-employee workers
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Invoicing and payment automation
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Analytics and reporting for workforce visibility
Instead of relying on spreadsheets or email chains, companies using a VMS can manage hundreds of vendors, track performance in real time, and control costs with precision.
Why a Vendor Management System is Important
The contingent workforce has grown dramatically - up to 30% of the U.S. workforce today is non-permanent labor, and that number continues to rise. Yet many organizations still rely on manual tools like Excel or SharePoint to manage this complex ecosystem. These outdated methods lead to:
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Human errors and compliance risks
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Inefficient processes and overspending
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Fragmented visibility across business units
Implementing a VMS transforms contingent workforce management by automating processes, reducing risk, and giving HR, procurement, and finance teams unified visibility.
Vendor Management System Pricing and ROI
Historically, VMS platforms were designed for large enterprises and came with complex pricing.
Today, cloud-based VMS solutions like Conexis VMS offer powerful functionality for mid-market organizations at a fraction of the cost.
When choosing a VMS solution, one of the biggest factors in your decision will be pricing. Here's what you need to know about VMS solution pricing models:
1- The Traditional VMS Pricing Model
Once implemented, VMS providers typically charge a percentage of every dollar that is processed through the Vendor Management System. Depending on spend levels the cost of a VMS could be as low as 35 basis points and go up as high as a full percentage point assessed on spend processed through the system.
2 - Monthly License Fee
Recently, some VMS providers have begun to offer a more traditional monthly license fee which is tied more to the data processing costs (which when you think about it aligns more with the VMS’ cost structure). These license fees start as low as a few hundred dollars and can go into the millions per year depending on the scale and complexity of the processing required.
Be Aware: The Hidden Costs of VMS Pricing
Processing and implementation aside - there are many hidden costs that you might not be aware of. When evaluating VMS providers, be sure to ask these about these potential hidden costs. You can also find a list of specific questions to ask in our free VMS Buyer's Guide.
Here's a rundown of some potential hidden costs. You can learn more about each of these at How Much Does a VMS Cost
1- Integration Complexity: VMS solutions must integrate with existing systems such as HRIS, ERP, and procurement software. If the integration is complex, it can lead to significant costs in time and resources. Be sure to ask the VMS if they have an open or closed API. An open API will be more cost-effective and give you control over the integration.
2 - Change Management: Employee resistance to new systems can be costly. Effective change management requires training and possibly even shifts in company culture, which can be resource intensive. Find out from the VMS how they handle and support your change curve.
3 - Customization: Solutions may not fit your company’s unique processes. Customizations can be expensive and time-consuming and may require ongoing maintenance. Find out from the VMS how they handle and charge for customization.
4 - Data Migration: Transferring data from old systems to a new VMS can be a hidden cost, particularly if the data needs to be cleaned up or converted to a new format. Find out from the VMS if there are any costs for this.
5 - Compliance and Security: Ensuring the VMS complies with labor laws, data privacy regulations, and industry-specific compliance standards can incur costs, particularly if you operate in multiple jurisdictions. Find out from the VMS what data privacy legislation they follow. GDPR is the gold standard.
6 - User Training: Staff will need training on the new system. This training can be costly, especially if the VMS is complex or if there is high turnover in the staff using it. Find out from the VMS if they charge for training, if its included or if they can train the trainer so you can conduct your own training.
7 - Ongoing Support and Maintenance: Monthly or annual subscriptions, support contracts, and updates for the VMS can add up over time. Find out from your VMS if they charge for updates or any other items as part of your subscription.
8 - Vendor Lock-in: If the VMS is not interoperable with other systems or data formats, it may lead to vendor lock-in, which can be costly if you decide to switch providers in the future. Your VMS should provide an open API ensuring easy migrations.
9 - Scalability: If your contingent workforce grows, the VMS must scale accordingly. Some VMS providers charge more as you scale up, which can be a hidden cost. Find out from your VMS what their back-end architecture is. The most advanced today is a micro server architecture which scales instantly providing a fast user experience regardless of the load being put on the system.
10 - Reporting and Analytics: Most VMS' have a set of standard reports and a way for you to generate your own reporting. However, some VMS' charge a cost to set up metrics and analytics to measure the performance of your contingent workforce through the VMS. Find out if there are any extra costs for the specific reporting and analytics that your business needs.
How to Select the Right Vendor Management System
When choosing a VMS, consider your company’s specific requirements.
The right VMS helps you streamline vendor management, improve compliance, and reduce costs. But not all systems are created equal. Our VMS Buyer’s Guide includes expert insights and a step-by-step checklist to help you find the right fit.
Here are just a few things to evaluate when choosing a VMS:
1. Scalability & Flexibility
Choose a solution that grows with your business. Modular, configurable systems allow you to scale features as your workforce needs evolve.
2. Integration Capabilities
Ensure your VMS integrates seamlessly with existing tools like your HRIS, payroll, ERP, or time-tracking systems for maximum efficiency.
3. Real-Time Reporting & Analytics
Look for platforms that offer customizable dashboards, workforce spend insights, and performance tracking to drive smarter decisions.
4. Supplier & Freelancer Management
Your VMS should make it easy to manage staffing agencies and independent contractors, offering automated workflows and communication tools.
5. MSP-Specific Features
If you work with a Managed Service Provider (MSP), look for functionality that supports program flexibility, regulatory compliance, and client success.
📘 Download our Free VMS Buyer's Guide for a checklist of essential features and vendor comparison tips.
Let's Meet: Get a Personal Demo of Conexis VMS
Let’s explore how Conexis can help your business automate contingent workforce management and cut costs.
Contact Us for a confidential No-Obligation Consultation to discuss your current workforce challenges (and get immediate actionable insights). We would be happy to meet with you to discuss your current VMS and show you all the benefits of switching to Conexis. Or, Book a Personal Demo so we can show you Conexis in action.
I have used a lot of VMS systems over the last ten years and I can honestly say that Conexis is the easiest and simplest to use VMS of all of them. Please don’t change!
US Managed Service Provider
Senior Account Manager
Conexis VMS has helped put our contractors in one consolidated place - giving us visibility and control over our temporary workers, enabling us to have more predictability and oversight of our costs.
Global Final Mile Delivery Company
VP People & Culture
We had all the traditional contingent workforce issues that large enterprise companies have, however, we struggled to find a VMS provider that could give us a technology solution within our budget and we felt could attend to our needs properly. Conexis has been a godsend since we implemented it 5 years ago. We now have full visibility to our entire workforce and access to all of our data.
Global MSP Provider
SR VP of Delivery
We had all the traditional contingent workforce issues that most companies have, however, we struggled to find a VMS provider that could give us a technology solution within our budget and could attend to our needs properly. Conexis has been a godsend since we implemented it over 5 years ago. We now have full visibility of our entire workforce and access to all of our data.
North American Pharmaceutical Company
Director of Procurement
We have been using Conexis for three years now, I think we were one of their first customers. When we started with Conexis we were looking to run an RFP, but after a meeting and demo, we knew Conexis was the perfect fit for our organization. It had the functionality we needed, and their client-centric culture was an important deciding factor. They didn’t let us down.
Global Pharmaceutical Company
HR Director
Even though we are a global organization, we had no way of knowing where and how many contractors we had in our organization. Conexis has put all of our contractors in one place giving us full visibility to our global roster of temps. This has allowed us to standardize our costs, manage compliance and drive better performance of our staffing agencies. The system is simple, easy to use, and implementation was quick and painless.
Global Consumer Products Company
Regional Procurement Manager
We were struggling to manage one of our larger professional services clients due to the client's own VMS inefficiencies. We implemented Conexis internally to manage the entire MSP workflow from request to agency payments.
North American MSP
Senior Program Manager
Their customer care is amazing and their infrastructure allowed us to white label the platform. If we need custom changes we don’t wait months like some of the other VMS partners we have. Often changes and upgrades are done in a few weeks at the most. We are now rolling Conexis out in Europe.
Global MSP
North American Director
Conexis was able to get us up and running so fast and at no cost. We have a lot of unique requirements but that didn’t impact the timeline or the budget. Just a great experience all around.
Global Beauty Products Company
Senior Procurement Manager
We looked at many VMS providers, but the cost was crazy. We had given up until we came across Conexis. They set us up and had us running in a few weeks. The license fees are very reasonable as well.
Global Pharmaceutical Manufacturer
Procurement Directors
