Typical features of a VMS application include order distribution, consolidated billing and significant enhancements in reporting capability that outperforms manual systems and processes.
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.
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.
VMS is an evolution of the Master Service Provider (MSP) / Vendor-On-Premises (VOP) concept, which became more prevalent in the late-1980s to the mid-1990s when larger enterprises began looking for ways to reduce outsourcing costs.
[citation needed] It is noteworthy to mention that VMS really started to evolve around the time Michael Hammer and James Champy's Reengineering the Corporation became a bestseller.
The main advantage for U.S. businesses during this time period was that their purchasing departments were able to channel new contract personnel requisitions to one source – the VOP – and, in turn, reduce procurement costs by simplifying their payment process.
[citation needed] In 1997, MSX International purchased GRI and continued its growth in the marketplace offering a vendor neutral VMS for automotive industry.
[citation needed] MSXI also created a 51/49 minority-owned subsidiary and repackaged its web-based application as “TechCentral” to service former GM parts supplier, Delphi Corporation.
[7] ProcureStaff Technologies spun off as a subsidiary of its parent company, Volt Information Sciences to address the glaring need for vendor neutrality in the procurement of this commodity.
ProcureStaff Technologies implemented a vendor-neutral model for its first client, a global telecommunications company, because it promoted competition by opening requisitions up to a larger number of pre-qualified staffing suppliers without bias or favoritism.
[citation needed] On January 24, 2008, Beeline, the workforce solutions business unit of MPS Group, Inc., announced that it was the successful bidder for the assets of Chimes.
[citation needed] The Aberdeen Group, an independent research organization, found that less than 17% of companies who have implemented a program to manage their contingent labor workforce have seen an improvement in spend and source-to-cycle performance metrics.
Typical benefits included: According to Aberdeen research, 72% of US companies have a single program for managing contract labor and professional services sourcing and procurement.
Once customers have realized the initial benefits of gaining control and managing their contingent labor workforce, there will be efforts towards continuous improvement—to include cost reductions as well as analysis of what other indirect spend categories can be expanded.