From the Consol Thought Leadership Forum — What are the Top VMS KPIs?

- November 7, 2011 4:11 AM
Categories: Spend Management |

In late September, I had the chance to attend and speak at the Consol Thought Leadership Forum in Las Vegas. I previously covered a Forrester presentation from the event (see previous coverage here, here, and here) exploring analytics, VMS and the role of vendor management organizations in managing contingent workers, consultants and BPO providers. It turns out that Consol also surveyed its user base on the top KPIs they were interested in tracking and managing to in their VMS environment. The ranking of top priorities is actually a bit surprising overall, though it’s fairly easy to guess which KPI came in first.

That’s right — the top KPI that customers are interested in tracking is cost. No surprise here. Cost scored a 4.5 based on a coring range of 1-5 (with 5 being most important and 1 being least important). But surprisingly (at least based on our own research), “customer satisfaction” came in second, with an average score of 4.3. Next, “compliance” — which we would have suspected would have been second — came in third, with a score an average rating of 4.2. Our research (and everyone else’s) suggests that one of the main reasons we observe that companies first implement VMS programs is to not only contain costs, and gain visibility into costs, but to ensure compliance, including supplier onboarding, 1099, co-employment, etc. More advanced compliance use cases can take compliance reporting and KPI management to an entirely different level.

Outside of compliance, Consol’s rankings dropped off materially. In this regard, “quality” scored a 4.0 on average. And “delivery” scored a 3.7. Even though the sample sizes are relatively small, one wonders if the reason cost scored higher than compliance among Consol users is the mix of self-managed and MSP-administered programs. We’ve often observed that when organizations are more advanced in their thinking around services procurement — and in certain cases, self-management can suggest this type of sophistication — that prioritizing services spend on a total cost (versus just a unit or hourly basis) is a market of greater sophistication. Still, the sample size is most likely too low to draw any conclusions relative to the type of study that SIA might undertake on the topic.

Jason Busch

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