A vendor management system (VMS) is an Internet-enabled, often Web-based application that acts as a mechanism for business to manage and

procure staffing services temporary, and, in some cases, permanent placement services as well as outside contract or contingent labor. Typical features of a VMS application include order distribution, consolidated billing and significant enhancements in reporting capability that outperforms manual systems and processes.[1] In the financial industry due to recent regulations, vendor management implies consistent Risk Classificant and due diligence done to ensure risk assessment that eliminates undue third-party risks exposure.

Definitions
The contingent workforce is a provisional group of workers who work for an organization on a non-permanent basis, also known as freelancers, independent professionals, temporary contract workers, independent contractors or consultants. VMS is a type of contingent workforce management. There are several other terms associated with VMS which are all relevant to the contingent workforce, or staffing industry. A vendor is literally a person or organization that vends or sells contingent labor. Specifically a vendor can be an independent consultant, a consulting company, or staffing company (who can also be called a supplier because they supply the labor or expertise rather than selling it directly)[2]. A VOP, or Vendor On Premise, is a vendor that sets up shop on the client's premises. They are concerned with filling the labor needs and requirements of the client.[3] The VOP does this either by sourcing labor directly from themselves, or from other suppliers, whom may be their competitors. Also, the VOP manages and coordinates this labor for the client. A MSP, or Managed Service Provider, manages vendors and measure their effectiveness in recruiting according to the client's standards and requirements. MSPs generally do not recruit directly, but try to find the best suppliers of vendors according to the client's requirements. This, in essence, makes the MSP more neutral than a VOP in finding talent because they themselves do not provide the labor.[4], [5] VMS is a tool, specifically a software program, that distributes job requirements to staffing companies, recruiters, consulting companies, and other vendors (i.e. Independent consultants).[6] It facilitates the interview and hire process, as well as labor time collection approval and payment. A CMS, or Contractor management System, is a tool which interfaces with the Access Control Systems of large refineries, plants, and manufacturing facilities and the ERP system in order to capture the real-time hours/data between contractors and client. This type of system will typically involve a collaborative effort between the contractor and facility owner to simplify the timekeeping process and improve project cost visibility.

An EOR, or Employer of Record, is designed to facilitate all components of independent contractor management, including classificiation, auditing, and compliance reviews. Employer of Records help drive down the risk of co-employment and allow enterprises to engage and manage independent contractors without the stress of government audits or tax liabilities. [7]

Definition of Vendor Management

Posted by Anthony on Wednesday, November 28, 2007 6 Comments Executives and outsourcing vendors alike are constantly evaluating what vendor management is. Here is our quick definition of vendor management: Vendor management is the discipline of establishing service, quality, cost, and satifaction goals and selecting and managing third party companies to consistently meet these goals.

Establishing Goals Just as employees need clearly established goals, operations need clearly defined performance parameters. When selecting or managing vendors, vendor managers must optimize their opportunity to achieve these goals by using third parties companies. Selecting Vendors The fine art of vendor management is essential to optimizing operational results. Different vendors have different strengths and weaknesses, and it is the vendor managers responsibility to match the right company with the desired performance characteristics. Failure to consider this comprehensively could lead to complete failure. Managing Vendors On a daily basis, vendor managers must monitor performance, provide feedback, champion new projects, define or approve/disapprove change control processes, and develop vendors. Theres a tremendous amount of detail to this aspect of the discipline, and weve covered this in many posts here. Consistently Meet Goals Operations must perform within statistically acceptable upper and lower control bounds. Everything the vendor manager does should focus on meeting goals, from providing forecasts to defining requirements, from ensuring vendors have adequate staff to ensuring the staff have completed all required training.

Note that vendor management is not the same as operations management, although it is remarkably similar. In an outsourcing relationship, vendor managers must understand the drivers of the relationship in order to ensure the vendor is successful. Vendor managers are not empowered to perform all aspects of the outsourced operation. Rather, they must influence the vendor to perform. This level of influence is different from managing employees because of the economic differences in the relationship: a company typically represents 100% of an employees income, but rarely represents even 5% of a companys revenues. More to the point, most outsourcing contracts are priced by vendors in a way that even if the vendor paid the maximum nonperformance penalties they are likely to still be profitable. So, the conundrum vendor managers face is how to influence profitable vendors to meet performance objectives when reaching these levels are likely to be less profitable in the near term.

Managing Vendors and Suppliers

It is just as important to communicate with your suppliers and vendors as it is to communicate with your customers. Establishing the proper communication channels and information flows between you and your suppliers can lead to increased efficiencies, reduced costs and better customer service. This section will cover the simple communication methods (i.e. telephone) and other ideas that will allow your company to build a win-win relationship with your suppliers and vendors. 1. Successful Vendor Selection (7) Vendor Management Best Practices Regardless of what business you're in, vendors play a key role in the success of your business. Using the following vendor management best practices to build a mutually strong relationship with your vendors will strengthen your company's overall performance in the marketplace. Ignoring these sound vendor management principles will result in a dysfunctional relationship that will have the potentia Vendor Management Success Tips Vendor management is more than just getting your suppliers to give you a lower price or better service contract. Your vendors supply your business with necessary products and services. Properly managed vendors can give you a competitive advantage as well as cost savings. Vendor Management Means Quality Assurance The first step in ensuring a successful outsourcing project is to implement a quality assurance program. This article will help you and your vendor come together on defining what quality assurance means to both of you. Vendor Management: Measuring Outsourcing Effectiveness The first step in building a positive relationship with your outsourcing vendor, is to clearly state your expectations in terms that are measurable and quantifiable. It is not sufficient to state to your vendor that you want "good quality plastic parts." Here is how you can start today. Supplier Relationship Management Once you start doing business with a supplier, you become more dependent on them and they become more dependent on you. Like any relationship, communications with suppliers and vendors must be cared for. Here is an overview of supplier relationship management. The Successful Vendor Selection Process The vendor selection process can be a very confusing, complicated and emotional undertaking if you don't know how to approach it from the very start. Here are five straightforward steps to help you select the best vendor for whatever your business needs. Implementing a World Class Purchasing Organization Communicating with your vendors and suppliers starts with a superior purchasing process. A rapidly growing company may quickly out pace the methods and procedures that used to carry the company in its day-to-day operations. Larger companies need more sophisticated solutions in order to stay competitive. If youre looking for bigger and better purchasing solutions, start here. What are the ISO Quality Standards 9001, 9002 and 9003 The International Organization for Standardization (ISO) has developed a set of standards, practices, terminologies and requirements, that when adapted demonstrate that the products and services that you are buying have achieved a high level of quality. There are three different types of certifications. This article will help you decide which one should be important to you.

ISO 9001 Quality Benefits Choosing a vendor or supplier is an important decision for your organization. The more parts and materials that they supply, the more critical this relationship is. Selecting a supplier that is ISO 9001 certified demonstrates their commitment to quality and service.