Most organizations buying their first VMS know it's a big decision, and the stakes are high. This article walks you through every step, from knowing if you're ready, pricing, preparing for your first demo, questions to ask, red flags and implementation.
If you're managing contingent workers with spreadsheets, email threads and a stack of staffing agency invoices, you've probably wondered whether a vendor management system (VMS) could make life easier. Maybe you have even looked, but the cost seems way too high.
You're not alone.
Many organizations reach a point where their contingent workforce program outgrows manual processes, but they've never bought a VMS before and aren't sure where to start.
Buying your first VMS is different from replacing one. You don't have an existing system to compare against, you may not know which questions to ask, and you'll likely need to convince people across HR, procurement, finance and operations that it's worth it.
This article is written for first-time VMS buyers.
It covers how to know you're ready, what a VMS should do for you, how pricing works, who to involve, how to prepare for demos, what to ask vendors, which red flags to watch for, and what implementation really looks like.
For a full overview of the journey, see our guide Getting Started with Your First VMS.
There's rarely a single moment when an organization decides it needs a VMS. Usually the pain builds until manual processes cost more than they save. You're likely ready if several of these sound familiar:
A VMS is cloud-based software that manages your contingent workforce in one place, from job request to final invoice. It connects hiring managers, staffing agencies, HR, procurement and finance. A VMS is built for contingent workers, and some can also manage permanent employees.
For a first-time buyer, these are the capabilities that matter most:
|
Capability |
What it replaces |
|
Requisitions and approvals |
Email requests and chasing managers for sign-off |
|
Supplier management |
Sending each role to each agency separately |
|
Onboarding and compliance |
Paper checklists and document folders |
|
Time, shifts and expenses |
Paper or spreadsheet timesheets |
|
Consolidated invoicing |
Reconciling invoices from every agency by hand |
|
Real-time reporting |
Pulling data from several sources to answer one question |
|
Integrations |
Re-entering the same data in payroll, HR and finance systems |
You don't need every advanced feature on day one. Focus on what solves today's problems, and make sure the platform can grow with you.
Pricing is one of the most confusing parts of buying a first VMS, because vendors package their costs very differently. There are three main ways to pay for a VMS:
|
Funding Model |
How it works |
What to watch for |
|
Client Funded
|
You pay a fixed annual or monthly fee, often based on a small percentage of spend processed through the system, often with a minimum monthly license fee if you have a smaller program |
Confirm what's included and how fees change as your program grows |
|
Vendor-funded
|
Your staffing agencies pay the fee deducted off of their invoices, built into their bill rates in the system |
It looks free, but the suppliers often find a way to get it back through higher bill rates which the VMS can highlight |
|
Hybrid-Funded |
The cost is shared between your organization and your staffing agencies |
Make sure you can see both parts of the cost, not just your share |
Pricing model works differently, and there are a few things to watch for in each:
|
Pricing Model |
How it works |
What to watch for |
|
License or subscription
|
You pay a fixed annual or monthly fee, often based on users, modules or workers |
Fees can rise as you add users or modules |
|
Percentage of spend |
The vendor charges a percentage of the contingent spend managed through the system |
Costs grow as your program grows, even if your needs don't change |
Whichever model you're quoted, ask for a full list of fees in writing. Costs can hide in:
For a full breakdown, read How Much Does a VMS Cost?
Conexis VMS offers flexible pricing through a monthly license fee or a percentage of the contingent workforce spend managed through the platform. There are no setup fees, and implementation, training and support are included at no additional cost.
A VMS touches almost every team that works with contingent workers. Bring the right people in early, and you'll avoid a project that stalls halfway through.
Pick one person to own the project, usually from procurement or HR. Then ask each group to name its top two or three problems with the current process. Those problems become your requirements and your business case.
First-time buyers often go into demos without their own information, so every vendor shows the same generic script. Gather these before your first call, and you'll get demos built around your program:
The types of workers you use (temporary, contract, shift-based, direct hire) and roughly how many
Share this information with each vendor before the demo, and ask them to show you how their platform handles your workflows, not a sample company's.
Some warning signs only show up if you know to look for them. Be cautious if a vendor:
Many first-time buyers worry that a VMS means a long, expensive IT project.
Implementation timing depends on the provider, program scope, data readiness and integrations. With many legacy platforms, that worry can be valid: implementations can take six to twelve months, or longer. A modern, configurable VMS can be live in weeks.
With Conexis VMS Easy Start™, most organizations are up and running in under 30 days.
It follows six stages:
A VMS only delivers value if people use it. These steps help first-time programs build adoption quickly:
Tell us how your program runs today, and we'll show you Conexis VMS configured around your workflows.
Buying your first VMS doesn't have to be overwhelming. Start by confirming you're ready, bring the right people in early, and prepare your own information before you talk to vendors. Ask direct questions about pricing, implementation and support, and watch for the red flags that signal a platform built for someone else.
The right first VMS fits the program you have today, launches quickly and grows with you. Get those three things right, and you'll wonder how you ever managed contractors with spreadsheets.
A first-time VMS buyer is an organization buying a vendor management system for the first time, usually moving from spreadsheets, email and manual processes. First-time buyers need different guidance from organizations replacing an existing VMS, because they're building requirements from scratch.
Common signs include working with several staffing agencies, struggling to see total contingent spend, reconciling timesheets and invoices by hand, and tracking compliance in spreadsheets. If several of these apply, work through our 15 questions to find out if you need a VMS.
No. Many VMS platforms are built for global enterprises, but modern platforms like Conexis VMS are designed to be quick to launch and priced for mid-size programs too.
It depends on the platform. Legacy systems can take six to twelve months. With Conexis VMS, most organizations are up and running in under 30 days.
Costs depend on the funding or pricing model, which may be client-funded, vendor-funded, or hybrid-funded based on a liscence or subscription fee, percentage of spend or pay-as-you-go. Always ask for a written list of every fee, including setup, training, support, integrations and renewals.
Usually someone in procurement or HR, with input from finance, operations, IT and a few hiring managers. One clear owner keeps the project moving.
Not necessarily. A VMS is technology you run yourself, while a managed service provider (MSP) runs your program for you, often using a VMS. Read MSP or VMS: Choosing the Right Model to see which fits your program.
Some can. A VMS is built for contingent workers, but some platforms can also manage permanent employees.
Conexis VMS is an award-winning vendor management system built for organizations that want the power of enterprise software without the complexity or cost.
Leveraging the latest technology, Conexis VMS delivers the expertise, reliability and security of enterprise systems, while offering the flexibility, user friendliness and tailored, personal service you require. Learn more about our Company and what makes Conexis VMS different.
Conexis VMS is trusted by staffing agencies, MSPs and leading organizations to modernize and manage their contingent workforce programs. Here's why organizations choose Conexis VMS:
Buying your first VMS doesn’t have to be overwhelming. We’ll guide you through every step, from mapping how your program works today to launching, with no setup fees and free implementation, training and support.