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Are you looking for a vendor management system (VMS)? If so, you may have questions about which one is best for your business.
According to Spend Matters' Andrew Karpie, “VMS solutions have arguably changed more in the past 18 months than they have in the last five years."
The right VMS can result in cost savings, risk mitigation and increased visibility into your contingent workforce management program. That said, selecting the right VMS is not an easy task. There are a lot of “moving parts" and elements to manage if you want to get it right. Not only that, but the VMS you do choose will affect the entire organization.
That's why Beeline sponsored a recent webinar called “VMS and Services Procurement Technology Selection in 2015 — New Tools, Shifting Strategies, False Prophets and More!" Jason Busch, founder and head of strategy for Spend Matters, and Andrew Karpie, research analyst for services procurement at Spend Matters, presented the webinar and shared expert insights on how to choose a VMS. They also talked about potential pitfalls.
Here's a quick recap, including the six key process steps you need to select and implement a VMS successfully. Armed with this information, you will be able to make an informed business decision when it is time to choose a technology partner for services procurement.
What Procurement Pros Need to Know About VMS — Really
No matter whether you are already using a VMS or in the market for one, this webinar event was packed with actionable insights. During the event, Jason and Andrew shared with participants how to:
- Choose the right technology partner for your organization
- Manage your program
- Select a VMS, including the potential pitfalls associated with handing over the decision to an managed service provider (MSP), not consulting with genuine, independent experts and not involving internal stakeholders throughout the process.
The hosts discussed everything from the importance of culture as a factor in VMS selection to people viewing VMS as a get out of jail free card.
When it comes to supplier and vendor management, the right VMS can help an organization with internal/external compliance and spend visibility, but how do you select the right VMS?
5 Lessons Jason Busch and Andrew Karpie Can Teach Procurement Professionals About VMS Selection
Although you would need to watch the webinar to benefit from all of the wisdom shared, here are a few insights that may make your job easier.
- Culture is a major factor in VMS selection: Not only must you make sure there is a culture fit between yourself and external service providers, but you must get your own house in order. Implementing a vendor management system is an endeavor that will affect your whole company. Success requires all parties — finance, IT, HR, MSP and expert consultants — to be on the same page.
- Make sure your systems will work together: To be successful, you have to consider how your VMS will interact with not just back-end tools but also with front-end interfaces and tools.
- Don't abdicate responsibility to the MSP: Although it is wise to seek help from trusted third parties, ultimately, it is your job to make sure everything goes right. As our hosts said, “They have to work with it, but you've got to live with it." They even suggested that this should have been the “mantra" of the webinar.
- Know what it takes to get selection right: That includes being aware of the pitfalls upfront; considering the special requirements of a VMS compared with other procurement technologies; nailing down the selection team; developing a strategy around the role of partners and services providers in the selection process; identifying all the right steps in the selection process — and following them!
- Technology needs to go deep and wide: Because of how fast technology is changing, it is critical to have IT guidance and involvement. It is important to assess underlying architecture (e.g., platform, SOA, etc.), integration and APIs, data integration and analytics.
Here's How to Master VMS Selection — Follow This Framework!
So how should you select a VMS? While we can't give legal advice and every situation is different, Jason and Andrew did share some best practices for a successful selection process.
- Key process step No. 1 – spend analysis: The experts agree that you should not skip or minimize this step, as everything else depends on it. They gave several suggestions for taking a snapshot of services procurement spending and trending.
- Key process step No. 2 – market research: There should be multiple levels of market research conducted. This isn't just VMS selection. Consider the broader services procurement ecosystem as well.
- Key process step No. 3 – functional requirements: Make sure you include inputs from HR, IT and other internal stakeholders. It's also advised to follow a process, but be open to learning. Also, remember that the “final requirements" are often a work in progress, even through award decision.
- Key process step No. 4 – RFP: An ideal RFP process does not force suppliers to bid “apples to apples." Ask suppliers how they can meet requirements by partnering (or not). Use a sourcing tool to collect/analyze information, but don't shortchange scenario analysis based on different supplier “offers."
- Key process step No. 5 – sourcing and contract award: This should be the most straightforward part of the process based on all of the prior stages. Our hosts offered this word to the wise: From a contract award perspective, budget for twice the time that you expect — especially when services are involved.
- Key process step No. 6 – post-sourcing: Procurement, HR and IT should be involved in defining and implementing delivery requirements. Also, stay involved — regardless of MSP considerations.
For access to this webinar, including a full recording, click here.