CPO Rising is excited to publish an interesting series of articles focused on the evolution of technology solutions and automated platforms within the greater spend management spectrum. In each article, we’ll dive into the “then” aspect of a particular solution and explain how it benefitted enterprises years ago, and the “now”: an introspective look at how a solution has evolved to not only continue driving value to their users, but also the expansion of key capabilities and functionalities. Today’s article focuses in on the advent of Vendor Management System (VMS) technology and its influence within the contingent workforce management industry.

The contemporary makeup of contingent workforce management (CWM) is a complex series of processes, labor sources, and functional competencies that can sometimes be overwhelming for the typical enterprise. Ardent’s CWM research has certainly pointed to these intricacies as a significant reason why some companies struggle to manage the “balance” of cost, quality, performance, and compliance attributes that play into CWM programs.

Much like other spaces under the greater supply management umbrella, the category of contingent labor requires automation and technology in order to effectively manage its many, many complexities. In fact, Ardent’s landmark Contingent Workforce Management Framework was developed to help companies understand these complexities and how they fit into the three major types of contract talent, including traditional temporary labor (i.e., staffing suppliers), complex contingent labor (i.e., SOW and services), and independent contractors (i.e., freelancers).

Vendor Management System (VMS) technology has risen as a viable option in the CWM toolbox, and, like other technologies in both the procurement and human capital industries, has evolved considerably over the past decade.

Then:

VMS solutions were initially designed as “eProcurement for temporary labor,” swinging more to the procurement side of the enterprise and providing a supplier management edge to staffing suppliers, vendors, and agencies. A decade (or more) ago, the phrase “contingent labor” typically referred to the “traditional temporary labor” category of the CWM Framework, with the complex and IC components of contingent workforce management certainly in play but not completely considered part of this category from a management perspective.

VMS technology proved to be a formidable force, however, years later, its importance in the greater CWM arena would truly shine through…

Now:

Vendor Management System technology has become the preeminent platform for managing all facets of contemporary contingent workforce management. While the “then” version of this platform included now-standard aspects such as analytics and supplier management, these functionalities have been “boosted” to effectively align with the complexities of contract talent management. And, with an increase in utilization of SOW-based projects and services (also known as “complex contingent labor” in the CWM Framework), VMS systems are now well-positioned to manage this non-traditional labor type more effectively by creating, developing, and measuring milestones and delivery dates, as well as the ability to create projects within the system that can manage the supplier-based components of this CWM aspect.

The intelligence gleaned from VMS systems are now more “agile” in that they hold value beyond the CWM category and can contribute to greater corporate planning, forecasting and budgeting. On the agile front, more and more VMS technology platforms are contributing to the notion of “total workforce optimization” by blending talent management (and human capital management) capabilities to contribute to a total picture of enterprise talent (both traditional and non-traditional).

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