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 a VMS?
Managing the contingent workforce is complex. Companies that use manual spreadsheets or Share-point-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.
About Conexis VMS
Conexis 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 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 why organizations Choose Conexis VMS.
Why Leading Companies Choose Conexis VMS
Conexis VMS is purpose-built for organizations seeking to manage their contingent labor spend effectively. Here’s why we're the right choice:
- Our Advanced Technology: We have the most modern and advanced VMS tech stack available today starting with the latest codebase and extending to our lightning-fast AWS microservice
- Fast Deployment: Get up and running in weeks, not months
- Transparent Pricing: Flexible pricing with no hidden costs and no set-up fees
- White-Label Ready: Customize the platform with your brand
- Real-Time Insights: Make faster decisions with built-in analytics
- Audit-Ready Compliance: Store contracts, worker data, and rates in one secure hub
- Open APIs - Effortless Integrations: Connect Conexis VMS to your ATS, HRIS, Finance, or BI systems in record time. Enjoy seamless data flow and instant visibility across all your tools
Looking to Switch Your VMS or Just Getting Started?
Whether you are looking to switch your VMS, or just getting started, we are here to help. Contact Us for a Free No-Obligation Consultation, See how Easy Conexis is to use by taking a quick 2 minute Self-Guided Online Demo, or Book a Personal Demo Today!
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