CWS 3.0: February 12, 2014

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Why VMS Is a Must for Larger Programs

Can a contingent workforce program run without a vendor management system? Recent discussions have indicated there are a few different opinions on the topic. But here’s my take: There is no way today’s large and midsize programs can run efficiently without the help of some type of technology. From the most basic excel spreadsheet to a tailor-made VMS, having accessible data enables program managers to be successful in managing cost, efficiency, quality and risk. In essence, interpreting the data and using it is what makes programs hum, regardless if they are managed by a third-party MSP, internally or via a mix of the two or hybrid model. Having visibility into the contingent workforce is the first step to managing any program.

When I was implementing MSP/VMS programs, one of the first things my team would do was look at whatever technology the company had been using to track money or access and find the contingents. It may have been a system that tracked 1099s, onboarding information for temporary workers, supplier data, etc. There were a host of systems to uncover data. The beauty of an initial VMS implementation was bringing them all together in one snapshot that was scalable, enabled complex contingent workforce analytics and ultimately helped us to provide great solutions for our customers.

Millions, if not billions, of dollars are now being spent on contingent labor, and the contingent workforce is at 18 percent and rising. CEOs, CFOs and the HR, procurement and legal departments in most midsize to large companies all are becoming much more interested in contingent workforce data. What and why depends on their unique vantage point and how they view strategic workforce planning. Program managers, HR and procurement are called upon more and more to work together to develop a roadmap with legal and finance departments that will result in the development of an integrated strategic workforce plan with a long-term (five years plus) horizon. There is no way to get there without a cohesive reporting system that will provide data to aid in the exercise.

A key component of strategic workforce planning is to understand your workforce and everyone else’s, including workforce availability and dynamics in the markets in which you operate or plan to operate. A best-in-class program will be able to know and provide periodic updates on activity and trends on contingent workforce usage, and having a tool to track this is critical. A program will also have a pulse on the overall employment trends, particularly in the markets that you operate in or plan to expand to. In other words, it’s not just the tool; that’s where good program managers come in. A VMS or technology will do the heavy lifting on the contingent data side, but it takes expertise, innovation, a degree of finesse and market knowledge to run a best-in-class program and create a long-range strategy.

I truly believe successful management of a contingent workforce program and addressing cost, quality, efficiency and risk requires some type of technology. The best programs need ongoing information and reporting to measure success so that they can identify opportunities to improve and provide innovative solutions. You can’t manage what you don’t see. The tool is just one component of a program, but a critical one. It is the tool that gives you visibility to manage. 

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