Hey, VMS: What Have You Done For Me Lately?

Used to be, when the vendor management systems first came out, buyers were thrilled with it. The tool saved them huge amounts of money, automated processes and gave them visibility into their temp workforces.  What’s not to like?  The fact that suppliers grudged every penny they spent funding the tool for the buyers mattered little.  VMS eating into the vendor’s margins was not the buyers’ problem. They were getting what they wanted.

Fast forward a decade.

A Staffing Industry Analysts’ 2014 Buyer Survey revealed that satisfaction with VMS is declining. Since 2011, the net promoter score (NPS) for VMS from contingent workforce managers has fallen 21 percentage points, to a score of 3 percent in the most recent survey. Hiring managers also were asked about their likelihood of recommending their VMS. They gave a ‐36 percent NPS to their VMS, meaning that a larger proportion of respondents were detractors than were promoters. In comparison the MSP has held up a little better. Meanwhile, the net promoter score for MSP has fallen nine percentage points since 2011, to 18 percent.

NPS is based on the assumption that every company’s customers can be divided into three categories: promoters, passives and detractors. The score tracks these groups getting a clear measure of the performance of the company — or tool, in this case —through the customers’ eyes. Detractors are unhappy customers or users who rated the tool from score 0-6 on a scale of 10. That number is subtracted from the number of customers that rate the company or service a 9 or 10.

The irony is that the VMS has evolved and gives the buyer of staffing services a whole lot more than it used to. VMS software is slick and easy to navigate, providing a suite of options. User interface notwithstanding, the tool has also been the greatest driver of increased contingent usage over the last decade.

People get used to a good thing. The first McDonalds wowed Americans when it opened, reducing a 30-40 minute wait to get a hamburger to a few minutes. Expectations were reset — speed became the norm. But history is littered with the dust of products that were yesterday’s news. Some went the way of the dodo, others need to revamp their models or die.

With the VMS, no doubt a lot has been accomplished. Contingent workforce specialist Jason Ezratty believes that the VMS today is being asked to do much much more. Will it? The last mile challenge is traditionally the hardest but it’s not the VMS’s alone. This could be a significant opportunity for the CW ecosystem to come together and take the tool up a notch. Done right, all the players could be big winners.

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Beeline

Doug Leeby 08/12/2014 02:21 pm

Your blog asks a fair question for us in the VMS business. The irony is we too feel the same way. I'm certain we all have robust and innovative roadmaps but it can be a challenge to get to all the sexy stuff. A little perspective from a VMS guy- hopefully it doesn't come across as defensive- just a little more color. I can't speak for my competitors but I'd be willing to bet they are in the same boat. At Beeline, we are developing and pushing code at record levels. So where is the disconnect? How can we be so active and still come up short on the NPS?
We all worked hard addressing and refining the contingent workforce functionality for the first half of our VMS lives. However, we found that we could never "arrive" at a finished product." Despite offering a SaaS solution, the reality is that our clients have different needs and we need to cater to them. So development on the CWS functionality never stopped. Then, we moved into SOW functionality and we moved quickly. We were all competing hard for this new frontier and we went fast. Now consider the internationalization requirements. There is another area that gets very little attention but consumes a lot of time, money, and resources- security. The number of audits we've conducted, despite achieving SOC 1, SOC 2, and SOC 3,is at an all time high. Let's consider the last factor- pricing. Ben Walker penned an excellent blog asking whether the precipitous drop in VMS pricing would stymie innovation. Great question. Perhaps it has slowed it down. I still see signs of innovation every year but I also understand where our dollars and resources must be allocated. The amount of spend and headcount now streaming through VMS's is astronomical. We spend a lot of time and money ensuring the data is secure and private. This may not be sexy or highly visible but it is mandatory.
Still, we all have a long ways to go as we enter the next generation of VMS and all your points are well taken. In the end, it is we in the VMS world that need to find a way. If the last decade is any indication of the next, I'm sure we won't disappoint.


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