When it comes to supply chain staffing, risk management is always a hot topic, especially when contingent staff are part of the equation. At this year’s annual Gartner supply chain conference, where senior supply chain leaders covered today’s most pressing supply chain challenges and topics, risk management was one of the major issues that surfaced.
Here we look at how a Managed Service Provider (MSP) partnered with a Vendor Management System (VMS) can reduce organisations vulnerability to risk and maintain continuity of their contract workforce.
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What’s a VMS?
A Vendor Management System (VMS) is a web or cloud based application that enables organisations to centralise and automate the procurement and management of their contingent workforce. A VMS covers contractors, service firms working under a statement of work (SOW) and temporary workers.
Key Features:
- candidate requisition
- timekeeping
- approvals
- expense management
- billing
- reporting
What’s an MSP?
A Managed Service Provider (MSP) is an organisation that is responsible for managing the contingent workforce program of a client.
Key Features:
- vendor engagement
- supply chain management
- end-to-end requisition management
- benchmarking fees & scope
- rate card management
- supplier compliance
- contract management
- timesheeting
- consolidated billing
- expense management
- contractor care
- offboarding
Addressing the risks
The method adopted to keep track of your contingent workforce when sourced either through staffing agencies or business process outsource providers can leave your organisations susceptible to compliance risks.
A VMS solution addresses these concerns.
- All information housed in one system = infinite audit trails
- Reminders to ensure crucial deadlines and expiration dates are adhered to
- Superior control over approval processes
- Single entry point evades inaccurate or disjointed results
Technology based solutions such as a VMS and the data they deliver significantly improve the impact and effectiveness of any supply chain risk management program.
Other benefits of VMS
- Rate management – avoid rate miscalculations or incorrect payments
- Encapsulates suppliers as part of the workflow, helping to eliminate miscommunication and potential oversights
- Tracked onboarding and offboarding – improved compliance and transparency
- Integrates with existing applications to both add value and increase efficiency
So where does an MSP fit in?
Whilst a VMS provides organisations with a holistic view of their entire contingent workforce, its the expertise of an MSP that provides consultative insight into the data to enable the organisation to remain compliant, mitigate risks, make strategic hiring decisions, improve the quality of their workforce and improve their bottom line.
Benefits of an MSP
Cost savings & visibility:
- tenure management
- rationalisation of suppliers
- contractor rate management
- talent pool management
- analysis of reports
- improved budgeting & planning
Risk Mitigation:
- direct engagement with suppliers
- compliance of suppliers & talent
- contract management
- commercial arrangements
Vendor neutrality:
- no conflict of interest
- engaged supply chain
- flexibility to work with suppliers
Effective supply chain:
- full supply chain management
vetting & assessment of supplier fit
supplier performance management
A combination of the workforce management expertise of a Managed Service Provider and the functional capability of a Vendor Management System provides organisations with the fundamental business insights required to successfully engage and realise the true benefits of a contingent workforce.
Do you have experience with the working with a contingent workforce? Any stories to tell? We’d love to hear from you in the comments section below.
