For awhile now there have been two camps of thought concerning how to best help Corporations improve the management of their contingent workforce spending. At first, there were stand alone VMS (Vendor Management Software/Service) companies that applied technology to this business issue, Over time the large Staffing firms jumped in and through their MSP (Managed Service Provider) offerings and the acquisition of some of the VMS technology companies, they have been able to effectively help their largest corporate clients better manage the flow of contingent spending. Who is right and who is wrong ???
In a recent article in Workforce magazine, Chris Dwyer (analyst with research firm Aberdeen Group) mentioned that “it now makes good sense to combine a vendor management system (VMS) with a Managered Service Provider (MSP)”. He continued that “the big attraction of a vendor management system is that they help companies home in on how much they actually pay for temps and all other contingent workers”. Dwyer also relayed that “VMS users have reduced their time-to-fill rates by 34%, while achieving 37% higher cost savings than non-VMS users”. The benefits for corporations working more tightly with their Staffing suppliersis becomming more and more aparent to everyone.
Managed service providers, such as Manpower, Adecco and Guidant, have their own software ( usually through acquisition) for keeping tabs of their client’s contigent labor. Ed Jackson (CEO at Provade) summed it up very clearly, when he stated that “it was a lot simplier 20 years ago when 90% of the total workforce was permanent, where today it is down to 60% or even lower in some companies”. Jim Holincheck (analyst withresearch firm Gartner) clarified that “the interest in Vendor Management Systems has been limited to those firms that spend at least $30 million each year on contigent labor”. As with most new technologies, the largest firms spearhead the initial efforts and then smaller firms follow along.
So where does all of this information lead us ??? From my point of view, the need for a seperate standalone VMS system is quickly fading for a number of reasons. First, corporations want their current applicant tracking ATS and talent management TMS systems to include most of the VMS functionality as it relates to distributing orders and assigning workers from multiple tiers of staffing suppliers. On the other side of the coin, staffing firms need some of the VMS capabilities bulit into their own front and back office systems to handle the collection of timecards and creation of invoices for those corporate clients. Because of this changing direction amongst corporations and staffing firms, we at Bond International Software are currently delivering our Bond Talent corporate solutions and our Adapt/On Demand staffing systems with all of these VMS capabilities built in from the beginning and tightly integrated, just like in an ERP manufacturing environment.
As Bond and other software firms begin to deploy these integrated Human Capital Supply Chain solutions to corporations and their staffing suppliers, the need for stand alone VMS systems will quickly disappear. Those VMS firms such as BeeLine will continue to be acquired by staffing firms such as Adecco and other. What is your company’s strategy for better controlling your Contigent Spending and moving towards a Human Capital Supply Chain environment with your staffing suppliers??? Let me know, Tim Giehll
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