The Trick to Vendor Management Systems

Without a centralized, automated system in place, most large companies have little idea how many temporary workers they have, how much they are paying them, what their total spend including fees will be and what accrued expenditure is owed to suppliers.

Contract information technology (IT) spending is usually the most lucrative place to start ferreting out cost savings via VMS. IT has evolved into the highest and most complex cost of all contract labor. When the technology sector took off in the late 1990s, fueled by Y2K, the dot-com explosion and an economic boom, it drove the price of technical resources through the roof. That same escalation didn't happen with light industrial or other types of temporary labor during the boom years. Most all VMS users integrate IT labor first, with the intention to bring in other contract labor channels once the technology has been proven to save costs.

The adoption of a Vendor Management solution is often paired with vendor consolidation procedures. One common practice is to use the robust reporting features of VMS systems as a metric in which to evaluate the different vendors of IT staffing, and thus determine which vendors are delivering more high quality candidates and which are under performing (comparing talent resources, engagement durations and turnover ratios).