In a recent client meeting, my colleague and I were enthusiastically describing how our Vendor Management System (VMS) provides extraordinary functionality in handling outsourced projects when we were brought up short by the client’s confused question. Simply put, the client wanted to understand why a VMS, which traditionally manages contingent labor, would also be an effective solution to Statement-of-Work (SOW) projects offered by third parties.
So, we have an explanation here for all those who wondered about this, but never actually asked anyone or received a satisfactory explanation about it, even if they asked. Simply put, whenever your business depends on the efforts of non-employees, you need to put in place an effective management program. Outsourced projects working under a Statement of Work are a variation on the use of temporary, outside workers.
Let us look at the differences first:
Among the similarities, we could list:
One misconception that applies to the use of VMS systems when managing contract workers or outsourced project teams is that the primary mission of a VMS is to manage spend. The real value achieved through the use of a strong VMS system is the elimination of complexity, which drives operational effectiveness in all areas, not just cost savings. How does a VMS do this when dealing with outsourced projects?
Of course, in this post, we are only talking about the reason why people trust in a VMS to help them manage their SOW projects. Each VMS has its own standards and parameters in the support it offers to this end. Read my other post, to know more about the kind of support a really capable VMS can offer to the management of a SOW project.
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