Count on Savings: VMS Unleashed!
In today's dynamic business landscape, managing a contingent workforce program with precision and efficiency has become imperative for organizations seeking to optimize their operations. Implementing a Vendor Management System (VMS), also known as an Extended Workforce Management System (EWS), can be a game-changer in this regard, offering a multitude of benefits that go far beyond mere administrative streamlining.
From enhanced contractor visibility and rate comparison, to achieving cost consistency, efficiency, and time savings, these systems empower businesses to make data-driven decisions and harness the full potential of their contingent workforce. In addition, VMS and EWS solutions bring significant improvements to invoicing, approval frameworks, and compliance oversight, which collectively contribute to substantial cost savings and improved overall performance.
In this blog post, we will delve into these key aspects to uncover how implementing a VMS or EWS can be a strategic investment for any organization looking to manage its non-permanent workforce more effectively while reaping the financial rewards that come with it.
Contractor Visibility and Rate Comparison
A VMS provides visibility into the contractors working for a company, their tenure, and their rates compared to others. This transparency enables companies to make informed decisions about contractor utilization and negotiate rates based on performance and market benchmarks.
Cost Consistency
By enforcing standardized bill rates through a VMS – whether using a rate card or controlling supplier margins – companies can avoid overpaying for services and maintain cost consistency across different projects and vendors. This helps eliminate price discrepancies and promotes fair pricing.
Efficiency and Time Savings
A VMS automates manual processes, such as vendor selection, onboarding, time tracking, and invoicing, saving time and reducing administrative costs. Streamlining these tasks allows resources to be allocated more efficiently, and allows your team to focus on more important tasks which results in savings.
Invoicing
A single consolidated invoice containing all approved time reduces the cost and time involved reconciling payments to suppliers. No more paper timesheets or invoices requiring signatures from hiring and department managers.
Approval Frameworks and Compliance Oversight
A VMS streamlines and automates the approval processes for vendor engagements, invoices, and contracts. This centralized oversight ensures adherence to compliance (with labor laws, regulations, and contractual obligations), reducing the risk of penalties and legal disputes, reducing maverick spending, and helping to identify potential cost-saving opportunities.
Quick Case Study: Visibility
The VMS provides visibility into the details behind rates and markups, allowing the client to identify and manage their problem areas.
The table on the left demonstrates examples of client rates exceeding rate cards, excessive markups by Suppliers and Pay Rates below prevailing rates.
The implementation of a Vendor Management System (VMS), or Extended Workforce Management System (EWS), is not just a savvy business move; it's a strategic investment that pays dividends in cost savings, efficiency gains, and compliance improvements.
At 3 Story Software (3SS), we take pride in our partnership with global organizations, consistently helping them achieve visibility and better results. On average, our 3SS partners have realized cost reductions ranging from 5% to 15% within the first year post-implementation. Such tangible outcomes not only underscore the financial benefits, but also affirm the strategic value of VMS and EWS solutions in driving success for modern contingent workforce programs.
It's not just about managing your contingent workforce; it's about optimizing it. Consider exploring the possibilities that 3SS and similar partners can offer: discover more 3SS features here, or schedule a demo today.