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Vendor Project Report 2003

Vendor Project Report 2003

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Published by: Er Abhishek Haridasan on Apr 19, 2012
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07/24/2013

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VMS (Vendor Management Services) is a fairly recent advancement in managing
contingent labor spend. VMS is an evolution of the Master Service Provider (MSP)
/ Vendor-On-Premise (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. An MSP or VOP was essentially a master vendor who is
responsible for on-site management of their customer’s temporary help / contract
worker needs. In keeping with the BPO (Business Process Outsourcing) concept,
the master vendor enters into subcontractor agreements with approved staffing
agencies.

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. Large enterprises were looking for ways to compete in the
global economy. 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. In effect, they only had to write a check to one
vendor vis-à-vis hundreds of suppliers.

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With the Internet came new ways of doing business, which included
electronic payment. According to Staffing Industry Analysts, Inc. the emergence of
eBusiness, B2B, E-Procurement et al. was the catalyst that began the VMS
industry.

As businesses began to integrate this e-business concept, online auctions
such as Covisint began to appear. The value proposition was, they claimed, that
they could reduce spend for purchasing office suppliers, industrial suppliers and
other commodities by putting these purchase requests out for bid via an online
auction.

Typical benefits included:

•Streamlined requisition approval workflow

•Reduced time-to-fill cycle times

•Bill rate standardization / management

•Optimization of supplier base

•Consolidated invoicing

•Improved security and asset management

•Availability of vendor performance metrics

•Visibility and cost control over maverick spend

•10-20% reduction in contingent labor spend

Contingent work, also sometimes known as casual work, is a neologism which
describes a type of employment relationship between an employer and employee.
There is no universally agreed consensus on what type of working arrangement
constitutes contingent work, but it is generally considered to be any one or
combination of the following:

•Work which is temporary or lacks job security

•Work which is part time

•Work which is paid on a piece work basis

Whether a person who does contingent work can be described as 'having a job'
is debatable - however, contingent work is usually not considered to be a career, or
part of a career. One of the features of contingent work is that it usually offers little
or no opportunity for career development.

If a job is full time permanent, and either pays a regular salaryor a fixed wage
for regular hours, then it is usually not considered to be contingent work.

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Contingent work is not an entirely neutral term, because commentators who use
the phrase generally consider it to be a social problem employment agencies and
classified advertising media are more likely to use the phrase casual work,
particularly to attract students who wish to earn money during the summer
vacation, but who aren't interested in a long term career. Whilst all casual work is
considered to be contingent work, not all contingent work is casual. In particular,
part time jobs, or jobs in organizations that have a high staff turnover, may be
considered contingent work, but aren't necessarily casual.

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