What Is a Vendor Management System (VMS), and Why Use It?

PRO UnlimitedBy PRO Unlimited 3 years ago
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As the contingent workforce continues to grow, accounting for a larger share of total employment year after year, businesses have sought ways to better manage these workers. For many companies, contingent labor programs operate in myriad silos, and organizations lack visibility across all of them.

This fragmentation can create some challenges. With managers lacking alignment across an organization, businesses can miss out on getting the top talent since there’s no feedback loop between personnel or efficient processes for securing highly skilled knowledge workers.

Furthermore, opportunities to secure the best rates for professional workers – whether via self-sourcing or with suppliers – can be lost amidst the chaos. And with no standard onboarding process in place, the chances for misclassification of workers increases.

So, how can a business tear down these silos, provide enterprise-wide transparency, and manage contingent workers across the entire worker lifecycle? Enter the combined power of a Vendor Management System (VMS) and Managed Service Provider (MSP).

What Is a Vendor Management System (VMS)?

A vendor management system, or VMS as it’s commonly called, is a SaaS platform that businesses use to manage all aspects of the contingent labor ecosystem. By centralizing and automating the management of temps, independent and self-sourced contractors, and statement of work (SOW) engagements through one cloud-based platform, organizations can drive a host of benefits when using the most capable VMS software today.

Depending on the platform’s sophistication, typical uses of a VMS include:

  • Initiating a talent or project request
  • Evaluating project bids and hiring workers
  • Onboarding and offboarding workers
  • Reviewing timecards and expenses
  • Analytics, benchmarking and optimizing

Top-tier vendor management systems can also integrate with other software applications, such as ERP, HRIS, and other HR and procurement systems. The scope and ease of integration will vary based on the provider.

Hiring managers, MSPs, suppliers and workers all interact with the VMS in a typical contingent workforce management workflow.

To realize the full power of a leading-edge VMS, it’s wise to opt for an integrated MSP and VMS model. A combined solution offers numerous advantages to a disaggregated approach, including but not limited to deeper analytics capabilities, faster product development and increased cost savings. (Learn more: “Positive Business Outcomes of an Integrated MSP and VMS Solution.”)

Why Use a VMS?

Leveraging the power of an industry-leading VMS solution, such as PRO Unlimited’s Wand, to manage contingent workers offers a host of benefits, including:

  • Cost savings: Avoid paying above-market pay rates and suppler markups, and leverage reporting to evaluate current spend
  • Visibility and transparency: Minimize “rogue” spend by departments and enable measurement of supplier performance
  • Improved talent quality: Optimize the talent pool by enabling more supplier options, particularly with a vendor-neutral approach
  • Reduced compliance risk: Follow consistent processes to ensure full compliance with federal, state and local laws and standards
  • Increased efficiency: Acquire higher-quality workers over a shorter timeline

Again, the rate of improvement in each of these areas will vary based on the business, the solution chosen, the depth of implementation, and the MSP.

The PRO Unlimited Difference

PRO Unlimited combines the world’s most tenured, purely vendor-neutral MSP with Wand, its best-in-class VMS. Together, this unique integrated offering provides clients with a comprehensive workforce management solution.

What makes Wand VMS unique? The list includes, but is not limited to, industry-leading iOS and Android mobile apps, a cutting-edge user interface, and proprietary machine-learning technologies that provide a superior user experience and help clients drive unprecedented contingent workforce management success.

To learn more about how mobile VMS can help your business, check out “5 Ways Mobile Improves the Contingent Workforce Experience.

If you or a member of your team would benefit from a further discussion on how PRO is helping companies implement winning contingent workforce management programs globally, please contact a PRO representative at 800.291.1099 or email at info@prounlimited.com.

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of PRO Unlimited and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.

  Best PracticesNew TechnologiesVendor Management Systems
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