A vendor management system (VMS) allows companies to efficiently manage temporary staffing needs. It facilitates the requisition, procurement, and billing processes for contract workers. The presentation reviews key aspects of how a VMS works, provides value-added enhancements, and discusses industry trends, challenges, cost savings opportunities, and best practices related to vendor management.

1. Property of the Corris Consulting Group 1

2. Agenda
 Overview
 Key Definitions
 How Does It Work
 Value Add Enhancements
 Market Conditions & Trends
 Challenges
 Savings Opportunities
 Best Practices & Benchmarks
 Team Members
 Team Member Roles & Responsibilities
 Questions
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3. Overview of Vendor Management Systems
A vendor management system (VMS) is a web-based application that
facilitates the requisitioning and procurement process of filling temporary
staffing requirements.
Typical features of a VMS application include human capital requisitioning,
order distribution, and consolidated billing, in addition to very significant
enhancements in reporting capability which outperforms manual systems
and processes.
 A classic system tracks costs and can integrate pertinent data into the
existing owner’s ERP system.
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4. Key Definitions
Vendor Management Organization (VMO)
• The body of policies and procedures that surround the VMS software. The VMO can be either
managed internally by the client or outsourced to a third-party, such as a Managed Services
Provider (MSP).
MSP – Managed Services Provider (MSP)
• A company that typically partners with a VMS provider and maintains an on-site program
management presence.
Vendor on Premise (VOP)
• Typically an on-site management solution, provided to a client by the primary staffing
provider, whereby the suppliers' representative(s) acquire and manage contingent workers.
Primary Vendor(s)
• Refers to the direct contractual relationship between a consulting vendor and the end client. A
typical vendor management program will have a number of primary vendors, but there can be
one primary vendor who can then use sub-vendors.
Sub-Vendor(s)
• Those staffing firms that work through a primary vendor.
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5. How Does It Work?
 Essentially a requisition system for people.
Routes requisitions to either HR, Procurement, or Finance to ensure funding is available before sending
requisition to the vendors.
 Routes the approved requisition with specific requirements to pre-approved vendors.
 Once interviewed and approved the Hiring Manager creates an Engagement document within the VMS, which
constitutes an offer letter.
After the candidate accepts the offering, the VMS becomes the Time & Attendance application for time
reporting and Hiring Manager approval.
 After the time submission is approved by the client, an Invoice is automatically system generated.
The Invoice is paid by the Client to the MSP, who in turn pays the respective sub-vendors.
Slides follow to show a pictorial view of the process
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6. Link2consult, Inc. 1 Bridge Plaza Suite
Administrator
Hiring
Manager
Purchasing
Administrator
Recruiter
Vendor-sideClient-side
Sales
Recruiter
Generic User Roles

7. Link2consult, Inc. 1 Bridge Plaza Suite 275 Fort
Lee, NJ 07024 201-849-4418
Procurement Module
1) The hiring manager creates a Requisition (REQ) for a staffing need
and obtains approval; or creates REQ in B2B e-Procurement app.
2) After necessary approvals are obtained, data is exported…
…and a more detailed REQ is created within Link2consult.
Customized
Selection
Criteria
REQ Publish
Vendor 2
Vendor 3
Vendor 4
Vendor 1
3) The REQ is then “wrapped” with customized selection criteria supplied
by Link2consult’s value-added service partners.
3a) Background checks are associated with the REQ to ensure all hired
contractors are screened according to (client) company policy.
3b) Skills tests are then specified, allowing the hiring manager to
objectively assess the technical skills of all submitted candidates.
Once completed by the Hiring Manager, the REQ is published and the MSP
or VMO is notified for review and distribution to Vendors.
Reference checks
Education
Verification
Credential
Verification
Criminal Records
check
SS# Validation
Driving Records
BackgroundChecks
REQREQ
REQ
template
REQ
existing
REQ
blank
Hiring
Manager
Approved Staffing Vendors
Client

8. Link2consult, Inc. 1 Bridge Plaza Suite 275 Fort
Lee, NJ 07024 201-849-4418
Engagement Module
Customized
Selection
Criteria
Reference checks
Education
Verification
Credential
Verification
Criminal Records
check
SS# Validation
Driving Records
BackgroundChecks
REQ
C++
Java
Javascript
Visual Basic
Visual C++
SQL Server
Oracle DBA
Notes/Domino
CORBA
SAP Basis
SAP ABAP/4
Peoplesoft
HTML
Windows NT
Windows 2000
Linux
REQ
Java
HTML
Vendor 4
Vendor 3
Vendor 2
Vendor 1
The hiring manager creates an Engagement document by clicking “Make
Engagement Proposal” at the top of the candidate’s profile.
Hiring
Manager
Engagement
Bill rate
Start date
End date
Timesheets
xxxx
xxxx
Client

9. Link2consult, Inc. 1 Bridge Plaza Suite 275 Fort
Lee, NJ 07024 201-849-4418
Engagement Module
Customized
Selection
Criteria
Reference checks
Education
Verification
Credential
Verification
Criminal Records
check
SS# Validation
Driving Records
BackgroundChecks
REQ
C++
Java
Javascript
Visual Basic
Visual C++
SQL Server
Oracle DBA
Notes/Domino
CORBA
SAP Basis
SAP ABAP/4
Peoplesoft
HTML
Windows NT
Windows 2000
Linux
REQ
Java
HTML
Vendor 4
Vendor 3
Vendor 2
Vendor 1
When all Pre-employment checks are completed successfully, the
contractor arrives at the worksite and is “On-boarded.”
Hiring
Manager
Engagement
Bill rate
Start date
End date
Timesheets
Purchasing
Manager
xxxx
xxxx
xxxx
Rate Review
and Approval
Contractor
Vendor 2
On-boarded
Client

10. Link2consult, Inc. 1 Bridge Plaza Suite 275 Fort
Lee, NJ 07024 201-849-4418
Engagement Module
Customized
Selection
Criteria
Reference checks
Education
Verification
Credential
Verification
Criminal Records
check
SS# Validation
Driving Records
BackgroundChecks
REQ
C++
Java
Javascript
Visual Basic
Visual C++
SQL Server
Oracle DBA
Notes/Domino
CORBA
SAP Basis
SAP ABAP/4
Peoplesoft
HTML
Windows NT
Windows 2000
Linux
REQ
Java
HTML
Vendor 4
Vendor 3
Vendor 2
Vendor 1
Payment of the Invoice is then made by the client to the Managed Service
Provider (MSP), the MSP pays vendor less a service fee.
Hiring
Manager
Engagement
Bill rate
Start date
End date
Timesheets
Purchasing
Manager
xxxx
xxxx
xxxx
Vendor 2
Rate Review
and Approval
Timesheet
Timesheet
Reports time
per project
Contractor
MSP
Client
Payment of Total Invoiced Amount less fee
Invoice
Service Fee

11. Control of hiring process and utilization of contract labor
Ease of contractor identification and assignment details
Ability to manage engagement end dates and notify Security
Ability to review pay/bill rate information
Enhanced time entry/approval system
Tracks history of assignments and rate changes
Better control of assignments including 30 day break policy
Ability to edit work locations on active engagements
Formal documentation and historical tracking
Ability to report on contractor population by business unit, location, and manager
Consistent on-boarding process (includes backgrounds, drug screens, insurance verification,
etc)
Online testing and assessment functionality
Accessible from any mobile device
Valued Added Enhancements
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12.  In October 2013, Forrester wrote about four trends:
 globalization of talent and needs as many companies have staff needs in several countries
 a more sophisticated understanding of “contingent” in that the end user defines project vs.
contingent labor putting their companies in legal jeopardy without a corporate policy with concise
definitions
 inclusion of SOW work into contingent programs
 separation of VMS software and MSP services as the majority of companies surveyed split their
VMS selections from their MSP decisions
 Most firms use vendor management systems (VMS) to address the contingent worker process and
automate as much as possible
 Companies spend roughly 20% of their IT budgets on all nonpermanent labor
 All the VMS suppliers have increased their capabilities in the area supporting projects that include those
that are fixed scope and fixed price
 Other Trends
 Fieldglass was purchased by SAP in 2014
 International Business Machines Corp. purchased Emptoris Inc. in 2011.
Market Conditions & Trends
Source: Forrester Research, Inc. 2013
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13. Challenges
Potential resistance for vendor participation
Lack of management support and enforcement
Willingness to make exceptions to processes, metrics, and
participation
Complexities for training all necessary personal for an
enterprise rollout
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14. Savings Opportunities
A reduction in Supplier mark up by 15% can reduce billing rates
by 11.5%. On $5M in annual staff augmentation spend, the saving
would be $575,000
Savings can also be generated by benchmarking prevailing pay
rates. Past experience has shown about a 5% reduction or an
additional $500,000 per year on a $5M annual spend.
Soft cost reductions in reduced financial administration because of
vendor consolidation, invoice processing, and check production
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15. Best Practices & Benchmarks
Area of
Opportunity
Industry Average Best Practice
Policy Contract labor procedures are formalized.
Agency and line manager tasked with
oversight of compliance.
Formal policy supported by informed
and empowered hiring managers,
recruitment/sourcing specialists, and
contractors.
Governance Divisional-based or geographical-based
decisions for contract labor spend.
Governance encourages compliance.
Centralized contract labor program
utilizing an intranet and distributed
access tools. Governance enforces
compliance.
Spend Visibility Limited visibility into contract labor
expenditure. Some visibility into
compliance before awarding contract
labor position.
Visibility into more than 60% of
spend, access to ad hoc and real-
time reports and proactive
compliance alerts & actions.
Automation Multiple fragmented sources of
information. Heavy reliance on agency
and manual reconciliation.
Use of online requisitions, time and
milestone tracking and invoice
reconciliation solutions. Leverage of
automated sourcing where
applicable.
Sources:
Best Practices of the Most Effective Workforce Management Solutions,
Allegis Group Services, 2010. Property of the Corris Consulting Group 15

16. Team Members
Project Champion - EVP of HR
Co-Project Champion - Director of Procurement
Director HR – Communicated Contingent Worker Policy and
Training that introduced the VMS
Team Leader – Procurement Category Manager
Handled all external vendor communications and negotiations
HR Team Members
HR Managers in various domestic locations to assist in regional
training sessions change management at their given local
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17. Role Responsibility
Project Champion  Assist in identifying and securing team member participation Identify
 Ensure stakeholder participation
 Obtains Executive Leadership Team approval
 Clear roadblocks
 Mediate issues/gain consensus on key decisions
 Participate in relevant meetings
Procurement
Project Leader
 Leads team through continuous improvement process and facilitates team meetings
 Facilitates all supplier communications
 Reports issues to the appropriate resource
 Creates decision criteria required to evaluate vendors
 Responsible for vendor selections and final recommendation
 Prepares resulting contracts or service agreements prior to Legal review and acceptance
Human Resources
Policy &
Communications
 Develops Contract Labor Policy
 Establishes approval hierarchy and VMS workflow process
 Enterprise communication of the new process
 Ensures departmental headcount and related budget
Team Roles & Responsibilities
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