Choosing the Best VMS for Your Business

So you decided to take the leap into vendor management systems (VMS). What now? How do you choose the best VMS for your business—one that will suit your particular circumstances and market?

Evaluating all the different VMS options and vendors can be a daunting task. This is especially true if you don't even know where to start, or which questions to ask a vendor to point you in the right direction.

This article will guide you through the process of evaluating the different options so that your eventual choice will address all the most pressing problems and opportunities facing your organisation.

Evaluate the needs of your organisation

Not every VMS package on the market is geared towards solving the problems facing your particular business or market.Some VMS packages are so advanced that you will end up paying for features you will never need or use.

That's why it's important to  find out what you need out of a VMS before approaching  different vendors to evaluate their offerings. Here are a couple of questions you need to ask of your organisation and your particular needs as a company:

• What are your overall goals for switching your vendor management to a VMS?
• What do you hope to gain from using a VMS?
• What is the size and scope of your organisation?
• What is the size of your current pool of vendors?
• What are your future prospects for growing your vendor base?
• What are the types of service providers you would like to include in the system?
• What are the labour categories you would like to include in the VMS?
• Do you want to do a graduated roll-out of the VMS or do the transition all at once?
• Would you like to work with international vendors?

Answering the above questions will help you to focus on those features which you actually need to make the VMS transition a success. Now you are ready to look at the different VMS features available in the market.

VMS features to consider

Now that you know what your goals are with switching to a VMS, your are ready to consider the various options available in the market.

The different VMS offerings in the market are not created equal. Some cater to the needs of large, transnational organisations, while others focus on SMMEs. That is why you have to look at the different feature-sets available, and decide on the ones that are crucial to your goals.

It's also useful to identify those features that are not essential to your operations so that you don't waste money on them. This will end up saving you time in evaluating the different VMS options—and could well save you money when you don't sign up for features you won't ever need.

This will also be useful when you approach VMS vendors for their input, because it will allow them to steer you towards the correct application for your business. Here are some of the most important features to consider when shopping around for a VMS solution:

1. External workforce visibility

One of the best features of a VMS is its ability to provide visibility into your flexible  workforce.

To remain nimble in the current market, you need to be able to respond to new opportunities and trends in a moment's notice. Which means you need to be able to bring new talent on board for periods of time, or switch out particular skill sets when the need arises. This is called the flexible workforce, and with a VMS you will be able to manage these resources in a systematic way.

The technology will streamline the process of sourcing the best and most efficient worker for each task. The system will also ensure that all your external workers are compliant with current laws, regulations, and company policies.

2. Extensive reporting

Because of the comprehensive reporting features of a VMS, you will be able to make much better evaluations of your vendor performance and compliance.

For example, a VMS could automatically generate reports with regards to the time efficiency of a vendor, the quality of their service, as well as the volume of goods they managed to provide in any given time-frame. In this way you will be able to evaluate the productivity and cost of using  that particular vendor.

The system should also be able to provide reports with regards to the compliance of each vendor, giving you real data to compare vendors against each other and to industry standards.

Talk to your VMS vendor, and  inquire about the type of automatic reporting their system is able to provide out of the box. Is their program able to create custom reports geared towards your particular industry and goals? Other questions to ask are whether reports can be scheduled automatically, and what type of training your staff would need to use the reporting functions of their product.

3. Company-wide procedures s and compliance

With a VMS it's possible to enforce consistent vendor systems across your entire company, regardless of department or physical location. In this way you can ensure that all the different brands and divisions within your organisation use the same procedures—even if each group is managed by a different team.

This will help your business in a variety of ways. Firstly, it will improve the efficiency of your organisation.

But it will also make compliance easier, ensuring that all the different departments and brands within your organisation are compliant with governmental regulations and company policies.

4. Tracking of Applicants

A VMS will allow you to track vendor applicants from the point a particular resource is requested, until vendors are onboarded. In this way, the administration task of sourcing the right vendors for a particular task is simplified.

With a VMS, hiring managers will be able to track the entire process of evaluating and hiring vendors. They will be able to approve or reject applicants  and work orders from their tablets or smartphones. Which means that workflows are sped up and unnecessary delays are eliminated.

In this way the VMS empowers your hiring managers to source the best and most appropriate talent for each task, increasing the efficiency of your hiring process.

5. Data analysis

Different VMS packages provide different data analytics capabilities. When you approach a VMS vendor, you need to inquire about the built-in business analytics that their software provides.

The right system is the one that feeds you with the right information to make better company-wide decisions with regards to your vendors and external workforce. For example, you might need to employ temporary workers from time to time. A VMS will be able to analyse and provide feedback on your contingent workforce program.

This will enable you to measure its success in real terms—which will allow you to make  adjustments on the fly and ensure its continued success.

6. Automated work orders

A VMS is able to automate the generation of work orders. It can also help hiring managers to approve and onboard the right vendor for the job.

A work order is the instruction t you send to a vendor with the particulars of the services and goods you want them to deliver. This would include the start and end dates of their services, or the date by which they have to deliver specific products. It would also include their rates and the physical locations of the work.

Many VMS packages are also able to integrate with existing human resources systems. In this way, the data captured in the VMS is shared with your existing HR services.

This allows the VMS to leverage your current HR systems for proper resource provisioning, identity management, and also to ensure that all the relevant invoices are paid.

When you approach a VMS vendor, you need to inquire about the work ecommerce-businesses">order automation capabilities of their software. Does their program eliminate the need for a separate purchase order? How flexible is the system to track resources that don't require time or expense reports? How do their tools integrate with your current human resources technology tools? How does the VMS assist in the onboarding of new vendors?

7. Timesheets and invoices

When you deal with vendors, it's crucial to keep track of their timesheets so that you will always be invoiced correctly. Many VMS systems are able to automate all your time entry processes. In this way, the system can alert hiring managers if a vendor ventures into overtime.

The technology will also be able to manage your vendor's time based on budget considerations and will be able to make the necessary tax adjustments. In this way, keeping track of your vendor's time sheets are automated and the manual processes are simplified.

When you approach a vendor, inquire about the different options the VMS gives for time entry. Many businesses already use different, competing time tracking systems. It's important that a VMS be able to access that data. So ask the vendor if their system is able to integrate with your current time tracking systems.

Often timesheet information is entered incorrectly, which means that the approval process for timesheets can get quite time consuming. So ask the vendor if their system is able to verify time sheet information for discrepancies.

Ask the vendor if their program can issue automatic timesheet related alerts. Will it check whether the correct time has been entered into the system? Can hiring managers and vendors check the accuracy of time sheets? Will the program be able to keep vendor's spend with the constraints of pre-determined budgets?

You need a VMS that handles all of the most tedious and error prone tasks in the timesheet and invoicing process. Then it has to provide this information in a format that is understandable and accessible. And of course the VMS has to be able to calculate accurate invoice amounts while taking all the relevant budget and tax considerations into account.

8. Customer support

When switching to new technology, you will need a lot of customer support. This would include training tools for your staff and guidance when you run into problems. When you make the leap to  new technology, you don't want to be left stranded with a system that doesn't function optimally.

When you approach a VMS vendor, ask them about the level of customer support they are able to provide. What type of assistance will they provide to your staff in the form of learning tools, user guides, and tutorials? Do they have customer service available on an ongoing basis? Will they keep updating their technology—and how will future releases be made available?

You should also inquire about the types of upgrades they plan to release in the future. Are these upgrades included as part of their maintenance program, or are there extra costs involved?

Making the right choice

To choose the right VMS for your business, you need to perform a  thorough evaluation of the VMS market and all the different options that are available. You will have to look at the following aspects of each VMS package to make an informed decision:

• the business model of the VMS vendor
• the core functionality of each VMS
• the specific features that differentiates a particular VMS from the competition—for example technology integrations, the level of customer support offered, as well as advanced features such as business intelligence.
• and of course, you need to consider cost.
  

Conclusion

In this fast-paced, digital  economy, you want a VMS that will take your business to the next level. You need a system that will scale with your needs. You need technology that will help you to rapidly respond to threats from the competition.

That might be a lot to ask from any new technology—but the right VMS should be able to deliver on these promises. Since not all VMS packages on the market will fit this bill, you need to determine the particular needs in your business that you need to address with adopting new technology.

Not only will this help you to identify the VMS features you need in your company, but will also allow you to communicate your expectations to any VMS vendor you approach for input. To advise you properly, VMS vendors need to have insight into your current business operations and processes. In this way, they will guide you towards options that are more suited to your particular needs.

Now you're able evaluate how their different packages would benefit your particular business, and meet your particular needs.