Over the past 15 years or so, more businesses have added vendor management systems (VMS) to help them manage contingent workforces more efficiently. How can you decide whether using a VMS is right for your company?
Are they only for larger organizations?
Look at it this way: The fundamental goal of any organization’s managers and human resources (HR) team is to hire outstanding, productive and committed people that will get the job done. And the fundamental goal of a VMS program is the same: to hire outstanding people.
Can you afford it?
Well, VMS is software as a service (SaaS) and doesn’t require a huge capital outlay, so it’s affordable to even smaller users of contingent labor. And most companies that adopt a VMS are surprised at how much they’d been spending on contingent labor once there is a line item identifying that amount.
Why would you need it?
If you need help with hiring, whether due to volume, time or expense, VMS programs might be the right choice for your company.
For example, VMS really started to take off during the late ’90s, when the demand for IT talent exceeded the supply. In this environment, companies used VMS to improve the process of finding talent, by getting good vendors to provide good people in a timely and efficient manner. This was classic supply chain management, conducted through a single system for efficiency.
And when the economy went downhill in 2008 and the supply of IT outstripped demand, VMS became a cost control strategy.
As organizations seek new and creative ways to address the changing economic climate and the shifting demands for productivity and efficiency in the workplace, VMS gives them a way to measure outcomes to prove that customer requirements are being met.
In particular, here are three ways that a VMS can deliver beneﬁts:
1) Provides visibility into performance strengths. A VMS gives you a consistent view of workforce quality, productivity and efficiency.
2) Reveals where there is room for improvement. A VMS can also help you discover areas that need to be improved by investing in the business.
3) Accelerates payments. A VMS provides automated and real-time ﬁnancial information in addition to automated timesheets and approvals. They can provide integrated ﬁnancial capabilities to the back office, including everything from time entry through invoice reconciliation. The result? Quick payment, which helps with the operational cash ﬂows of the business and provides you with a single automated ﬁnancial system of record.
Using a VMS can make good business sense, no matter the size of your business. And if you want more advice on maximizing productivity and profitability through workforce management solutions, contact The Avontis Group today.