What is a VMS?
A vendor management system is a web or cloud-based application that acts as a mechanism for businesses to manage and procure staffing vendors, as well as manage their entire contingent workforce program.
The use of a VMS enables organizations to automate all of the process involved in contingent workforce management, from engaging a staffing agency, sourcing talented temporary workers and independent contractors, onboarding contingent workers, time entry, approval and invoicing, as well as reporting functionalities that gives your company insight into vendor performance.
Consolidating all of this information into one centralized location means organizations can use a vendor management system to standardize their contingent workforce management rates and processes across the entirety of the company.
How Your Business Will Benefit From a VMS
One of the most common sayings in the business world is “you can’t manage what you can’t measure”, and this is certainly true when it comes to your contingent workforce.
Due to the complex nature of contingent workforce programs, and the fact these programs involve thousands of data points, hundreds of temps and a wide range of vendors that must all be managed properly, most organizations are failing to gain true visibility into program performance.
Through the use of a vendor management system, your organization will be able to automate and standardize all of the processes associated with your program and store all data in one centralized location, ensuring your business gains complete visibility into how your contingent workforce management program is performing.
As a result, the use of a VMS solution brings five key benefits to your business that result in ROI:
- Cost control
- Visibility
- Quality
- Process efficiencies
- Compliance
What Functionalities Should a Vendor Management Software Have?
Since in the past VMS developers have only built solutions for large enterprises with huge contingent workforce spend, looking for a vendor management system when your organization has a smaller contingent workforce budget can be difficult.
You still want a VMS that will enable you to better manage your contingent workforce program and staffing vendors, but, at the same time, you want to avoid paying expensive fees for fancy features that your business will simply never need or use.
To help your organization find a VMS solution that works for your smaller contingent budget, here are a few key functionalities that you should look out for in your chosen solution.
The ability to consolidate vendors: For clear visibility into your staffing agencies and vendor performance, a VMS should be able to consolidate all of your vendor information into one centralized location. This will improve how you manage, and analyze the performance, of those vendors.
Automation of processes: A VMS solution is a significant improvement from managing your contingent workforce using spreadsheets because the software should be able to automate your processes. Look for a vendor management system that can automate all of the time-consuming processes associated with managing your vendors, from sourcing, onboarding, analyzing performance, payment processing and much more.
Vendor standardization: Want to prevent rogue spend from occurring across your contingent workforce program? A VMS solution will improve vendor standardization across your business. This will act as a framework for how hiring managers across your entire company use and pay vendors.
Centralization of your program: Contingent workforce programs require a large amount of data, including both vendor information and worker information. The ability to centralize this in one centralized location will ensure your company has complete visibility into its program and that company policies around this workforce are being followed by all departments. This increased visibility ensures you are also able to view program performance and make better vendor/hiring decisions moving forward.
Other top features that you should look out for in a VMS solution should include:
- Simplicity of use
- Invoicing
- Process requisitions
- Process approvals
- Onboarding tools
- Scalability for company growth
- Visibility into vendor performance
How to Gain VMS Buy-In From the Key Players in Your Business
Moving over to a vendor management system is a big decision for your organization, and it involves buy-in from your entire company. That means your executives, HR team and procurement department all need to be involved.
To help you get buy-in from your entire organization, here’s a quick four step process to help you build a winning business case for VMS implementation:
Step #1 - Assess the performance of your current contingent workforce program
The first step of understanding why your business needs a vendor management system, and to get buy-in from others within your organization, is to assess the state of your current contingent workforce program. Review where your pain points are, where your business is losing money and where you might be making poor vendor choices.
Step #2 - Learn about the benefits a VMS will bring your business
Once you understand how your contingent program is performing, you can then review the benefits of a VMS (which we included earlier in this ebook) to find out how VMS implementation will bring a return on investment to your business. Define which benefits will make the most significant impact on your company’s program.
Step #3 - Present what you learned from step 1 and 2 to important stakeholders
Once you know how your program is performing and where it can benefit from the implementation of a VMS, you can present your findings to your organization’s decision-makers and other stakeholders. Gain support from all of your stakeholders by explaining how VMS implementation will benefit the company and improve its current processes.
Step #4 - Choose a VMS provider
Now you’ve got buy-in from your company, it’s time to choose a VMS provider to partner with. Make sure the provider is a good fit, but more importantly than the technology is at the right price point within your contingent program budget and has all the functionalities you need to successfully manage your vendors.
What are the critical Vendor Management System (VMS) advancements to watch for in 2024? Watch this "Ask The Expert" educational video with John Clark, Co-Founder of Conexis and Jeff Nugent, CWS as they share insights on 2024 VMS Trends and Strategies.
How Much Does a Vendor Management System Cost?
For a long time, the effective management of contingent workers has been out of reach for organizations with smaller temporary staff spend.
That’s because many vendor management systems out there require a minimum spend volume for your organization to be able to use them. These technologies have been specifically designed for the requirements of enterprise organizations with huge budgets.
These solutions are fine for large enterprise companies with high non-employee spend, but not for businesses with smaller contingent spend that may have as little as 10 temporary workers at any given time.
Thankfully that has changed over the past year or so. Companies with smaller contingent workforce budgets now have a number of growing VMS options that will allow them to better manage their contingent workers and staffing vendors - no matter how much their non-employee spend is.
A vendor management software for small business or an organization with smaller contingent workforce budgets could range anywhere from a $100 to $500 monthly license, depending on the specific functionalities you are looking for in a VMS.
VMS Software for For All Contingent Workforce Volumes
No matter your contingent spend, it’s crucial that you are still able to see a return on investment on your VMS payment.
With the launch of Conexis VMS, there is now a vendor management system that has been designed with the latest and greatest technology to be easy to use - with the user in mind.
To ensure maximum ROI for companies Conexis VMS has been designed to be a simple, easy-to-use, and cost-effective solution, without the complicated bells and whistles of more expensive VMS solutions that your business would never use.
With Conexis VMS, we have created a VMS solution for everyone.
How Do I Choose the Right VMS for my Company?
At Conexis VMS, we believe in open and transparent discussion. We know that you should be exploring different Vendor Management Solutions. That is why we have created The Ultimate VMS Buyer's Guide - to provide you with everything you need to know when choosing a VMS. Whether you are just getting started with a VMS, or looking to change solutions, this comprehensive guide includes questions to ask vendors, and an assessment checklist to guide you when meeting with VMS Providers.
"Conexis VMS has helped put our contractors in one consolidated place - giving us visibility and control over our temporary workers from agencies, and enabling us to have more predictability and oversight of our costs."
Melie Matifat, Vice President, People & Culture, Intelcom Express
"Conexis VMS has been specifically developed to help small and medium-sized enterprises to automate and improve their entire contingent management process, no matter how small or large their non-employee program is."
John Clark, Conexis VMS
