What is a VMS?
A vendor management system is a software platform, which is typically web or cloud-based, that acts as a mechanism for organizations to facilitate all of the processes involved in managing a contingent workforce program.
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.
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).
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What is a Vendor Management System (VMS) and Why do You Need One?
Vendor Management System (VMS) or Freelance Management System (FMS)?
How Does a Vendor Management System Work?
Now you understand exactly what a vendor management system is, but you’re probably still wondering how it works. Well, let’s take a bit of a deeper look at how exactly a VMS improves your management of both non-employee workers and the vendors you use to procure them.
A vendor management system essentially works by acting as a centralized database for all of your contingent workforce management processes, storing all the information you need on one seamless platform.
It does, however, go above and beyond that. The functionalities of a VMS allow you to automate processes such as invoicing, process requisitions, process approvals, onboarding and much more to dramatically improve the accuracy and efficiency in which your company performs the processes related to managing vendors and non-employee workers.
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External Workforce Management: What's the Difference Between MSP and VMS?
Can You Manage Both Independent Contractors and Permanent Employees in a VMS?
Why is a VMS Important for the Management of Your Non-Employee Workforce?
The contingent workforce - which is made up of temporary workers (temps), independent contractors, consultants and gig workers - has grown exponentially over the past few years.
Just take a look at some of these statistics!
- Roughly 25-30 percent of the US workforce is contingent. Not only that, but it is expected that more than 80 percent of large corporations plan to “substantially increase” their use of the flexible workforce in the coming years (Intuit).
- Many large companies estimate that a staggering 30 percent of their entire procurement spend goes toward contingent workers (Deloitte).
- More than 40 percent of workers are now employed in “alternative work arrangements”, such as contingent, part-time or gig work (Deloitte).
Since you’ve read this far down the page, it’s likely that your organization makes use of the contingent workforce and has its own non-employee management program in place. If that’s correct, then you’ll know just how complex contingent workforce management is.
Yet, despite these complexities, a large number of organizations are still using spreadsheets, in-house databases or Sharepoint-like websites to manage their staffing agencies and contingent workers.
These manual and time-consuming ways to manage a contingent workforce simply do not work.
No matter how diligent your organization is, these manual methods will lead to human error, time-consuming processes, and process inefficiencies. The result? Fragmented processes across your business, inefficient admin, vendor and worker overspending, and an overall lack of visibility into the performance of your non-employee workforce management program.
The use of a vendor management system, however, can completely transform your company’s ROI when it comes to the contingent workforce.
In fact, 89 percent of organizations that are considered “best-in-class” in contingent workforce management have implemented vendor management systems into their programs (Aberdeen Group Research).
Continue reading to learn how the use of a VMS will benefit your business.
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Using Manual Spreadsheets to Manage Temp Workers? It Doesn’t Work!
What are the Benefits of a Vendor Management System?
A VMS will bring a huge ROI to your company’s contingent workforce management program, and that’s because it’s capabilities will significantly improve your processes, reduce costs and lead to far greater visibility into your program.
Here are just some of the many benefits your business will realize from the use of a vendor management system.
Improved efficiencies: The automation of processes such as onboarding, time entry and approval will save your organization countless hours and lead to better internal efficiencies across your company.
Complete visibility into your program: Since your entire contingent workforce management program is now stored in one location, instead of being fragmented across different departments and hiring managers, you’ll have complete visibility into where you may be overpaying vendors or mismanaging non-employee workers.
Vendor consolidation: With your vendors consolidated into one location, your VMS will act as a central hub that gives you all the information you need to evaluate whether each staffing agency you use is helping you to meet your company’s unique workforce targets. This leads to more insightful and strategic vendor choices.
Reduce costs: By helping you to get the lowest prices from vendors, cut down on rogue spend in your contingent workforce management program and save money on process efficiencies, a VMS can help your business improve its bottom line and become more profitable.
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5 Ways a Vendor Management System (VMS) Will Improve Non-Employee Workforce Management
How to Select the Right VMS for Your Company’s Requirements
Any successful contingent workforce management program must use a vendor management system to underpin and centralize the entire strategy, and that means you have to find a software solution that works for your organization’s specific requirements.
Thankfully, with the development of Conexis, there is now an easy-to-use vendor management system that has been built specifically with the user in mind. This is a significant change from the complex systems of most VMS providers.
When looking for a vendor management system, keep these key questions in mind:
- Does it have features such as requisition processing, time tracking, invoicing, approval management, and onboarding tools that will automate how you manage staffing agencies and contingent workers?
- Will it consolidate your vendors in one location and integrate easily with your other systems?
- Does the solution work for your organization’s unique budget requirements?
- Will it help your business to monitor and track vendor performance?
- Will it centralize all of your contingent workforce management data in one easy-to-use, seamless portal, helping to improve the visibility of your program?
- Will the improved visibility you have into your contingent workforce program ensure compliance and proper classification of workers?
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VMS Functionalities That Will Improve Your Vendor Management Initiatives
What is the Price of a VMS Solution?
In the past, vendor management systems were only developed for large enterprises with huge contingent workforce spend. The problem was, these systems were designed to be incredibly complex and that left mid-market organizations with the choice to either use expensive and complicated systems, or ineffective spreadsheets instead.
The rise of Software as a Service has changed those pricing models. There are now a range of vendor management systems that are available at cost-effective rates.
The most important thing to look out for when choosing a vendor management system within your budget is its ease of use. Your business deserves a system that is easy to implement, seamless to operate and gives you the contingent workforce data you need to improve results.
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How Much Does a Vendor Management System (VMS) Cost?
About Conexis VMS
Conexis VMS has been designed specifically to be an easy-to-use platform. Conexis is built on the latest tech stack meaning we can offer a sophisticated, secure, and scalable VMS at a much lower cost than the traditional VMS providers.
That means less time figuring out how your VMS works and more time focusing on the core competencies that drive true business growth! Are you interested in more information about vendor management systems or how to improve your contingent workforce program? Get in touch with Conexis VMS today or Schedule a Demo. We would love to answer any questions you have in regard to vendor management.
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.
Melie Matifat
Vice President, People & Culture, Intelcom Express
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
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 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