Vendor Management System Usage Linked to Best-in-class Services Procurement Programs

Aberdeen report finds visibility around statements of work and other services a top concern

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Chicago — May 10, 2011 — A new Aberdeen Group report found that 80 percent of companies designated as "best-in-class" in their service procurement program are using a vendor management system, up from just 63 percent in last year's report.

In the report, "Contingent Labor Management: The Evolution of the Contemporary Contingent Workforce," Aberdeen estimates the modern contingent labor umbrella — including contingent labor, statement of work (SOW)-based projects, services and independent contractors — accounts for more than 22 percent of the average organization's total workforce. Because of this, it is critical for enterprises to maintain a proper level of visibility into this growing part of the labor force.

The report, sponsored by Fieldglass, a solution provider in this space, shows that of those surveyed, 57 percent called visibility into SOW and services spending in particular a top concern. The report offers insight into how using VMS technology can benefit those global organizations.

"VMS solutions have evolved to help companies automate management of specific service categories and projects that are tied to SOWs, as well as provide data analytics and dashboards for gaining intelligence around corporate projects, services, supplier agreements, and project costs," Aberdeen writes. "Best-in-class organizations are 44 percent more likely than "industry average" enterprises to leverage VMS solutions."

In addition, Aberdeen reports that companies leveraging VMS technology are 20 and 15 percent more likely to achieve its goals and objectives related to contingent labor and SOW-based projects and services, respectively.

"As this annual research shows, the services procurement space matures year-over-year, with companies demanding better and more advanced strategies for managing their services procurement programs," said Christopher Dwyer, research analyst with Aberdeen. "Companies like Fieldglass stay ahead of their customers' needs to provide efficient solutions that truly enable better workforce management."

Aberdeen surveyed more than 200 companies between March and April 2011 to determine their intentions, strategies and challenges with managing contingent labor and services. The firm also conducted interviews with select respondents.

The report is available for free (registration required) here.

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