Starting point: The role of VMS in modern corporate strategy

Almost every company that employs external workers or outsources assignments has to address questions relating to the efficient management of its roster of external employees and the costs and overall responsibility for the processes. We already looked at this topic in our blog post «External workforce: who is responsible for external employees?» and discussed a potential distribution of competences and responsibilities. However, what can a business do if it doesn’t know the exact answers to the questions raised, or if there is no company-wide transparency about the procurement of external labour? How can you obtain an overview of your own external workforce? A central software solution, more specifically a vendor management system (VMS), can provide clarity and help to optimise processes. But how do you find the right VMS?

Functions and benefits of a VMS solution

A VMS solution consists of several different modules that facilitate a plethora of functions. Every VMS solution’s basic functions include:

• Mapping various forms of external employment contracts, from hiring temporary personnel via services to outsourcing and contracts for work.
• Assistance with the processes of recruitment and management of external employees: this covers the whole range of personnel procurement and support.
• Specimen contracts, time management and invoicing: these functions ensure that working hours and financial transactions are recorded and administered accurately.
• Clear management and reporting: these features take care of efficient personnel scheduling and management.
• Management and monitoring of specific compliance requirements: this ensures that all regulations are adhered to.

Implementation of a VMS solution brings companies numerous benefits when managing external employees:

• Digitalisation of existing processes:existing processes can be digitalised when a VMS is implemented, making processing more efficient.
• Leaner and more transparent processes:  VMS makes it possible to implement processes that are not only more efficient, but also more transparent. This facilitates traceability and control.
• Enhanced data reporting and sharing: important data can be recorded, analysed and shared across the company.
• Adaptability to organisational changes:a VMS offers flexibility when business requirements change. For example, approval processes can be reassigned or redefined with just a few clicks.

Analysing and choosing the VMS solution

Selecting the right VMS starts with careful analysis of the current situation. The goals to be achieved by introducing a VMS have to be clarified to begin with. The analysis then goes into greater depth and clarifies questions concerning the population, stakeholders and deployment area on the basis of these defined goals. The following questions are examples that highlight the key considerations when choosing a VMS. They are not exhaustive, but concentrate on the essentials.

1) Goal definition

• What specific results should the implementation of a VMS achieve?
• To what extent is the situation intended to change after its introduction (increased efficiency, transparency, digitalisation, etc.)?
• How should the recruitment processes for external employees be harmonised?
• Should responsibility for the recruitment and management of external employees be centralised, or structured according to specific criteria?

2) Population

• How big is the external employee population and how will it develop in future?
• In which areas and for what services is external support required?
• How will the external workforce be planned and administered?

3) Stakeholders

• Which stakeholders are involved (human resources, procurement, finances, operational business, etc.)?
• What conflicts, concerns and fears exist within and between the stakeholder groups and the individual users?

4) Deployment area

• In view of the company’s size and the associated costs (licences, implementation costs, etc.), is the deployment of a VMS more cost-effective?
• Can the VMS be adapted to existing processes, or does it only offer one standard process?
• Can process optimisations be sought and implemented with the VMS?
• Should new processes also be introduced as part of the implementation?
• Are corporate policies in place that also apply to external resources (compliance, etc.)?

Summary

There is a close link between the responsibility and accountability for managing external employees and the deployment of a VMS solution. This is why the two topics have to be analysed together and holistically. Key factors in the choice of a suitable product are the company’s size, the external employee population, existing competences and the expectations as to what a VMS will deliver. Companies frequently levy the accusation that software does not provide the desired benefits and is therefore not used by those concerned. It is therefore crucial to involve specific user groups within the company in the process early.

The market offers numerous VMS options that differ in various ways, such as the user interface, handling, flexibility, configuration options, connection to peripheral systems and the cost of licences and implementation. Careful analysis of the initial situation in the company is therefore very important in order to arrive at a reasoned decision based on the stipulated criteria and requirements. HR Campus serves as a strong partner by your side, enabling you to focus on the overarching goal of efficient external employee management. We help you to analyse the initial situation, implement the right VMS solution for you and provide support in achieving your goals satisfactorily.

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Sources:

https://www.onlinewhitepapers.com/human-resources/the-forces-reshaping-how-work-gets-done/

https://t2informatik.de/wissen-kompakt/softwareeinfuehrung/

https://www.techtarget.com/searchsap/definition/vendor-management-system-VMS

https://www.sap.com/swiss/products/acquired-brands/what-is-fieldglass.html

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