Is Your Vendor Management System a Stovepipe System?

Is Your Vendor Management System a Stovepipe System?

In the computer and engineering world, a “stovepipe system” is a term applied to applications that could – and should – share data with other systems, but do not. If your goal is to achieve total talent management, but your vendor management system is a “stovepipe”, then the old adage, “Can’t get there from here” applies.

Achieving visibility into all aspects of labor usage has emerged as one of today’s greatest business challenges. Without complete visibility, it will not be possible to exert control over workforce spend, ensure compliance with policies, and achieve operational efficiency.   Technology has greatly enhanced the ability to monitor and control individual aspects of workforce usage. Gartner Group reports that nearly 20% of large global enterprises are using three or more talent management modules of a Human Capital Management (HCM) system to manage their permanent employees. In addition, the adoption of a Vendor Management System for non-employee management is estimated at greater than 70% within these same companies. While these systems are instrumental in increasing the ability to manage segments and distinct aspects of the total workforce population, the ultimate goal is to establish centralized and standardized management of all types of talent. This requires seamless integration between these disparate systems.

Nearly every software vendor will state that its product integrates with other legacy apps. This can mean anything from manual file uploads to fully automated bi-directional flow of information. Yet at a recent industry conference I repeatedly heard complaints of vendors turning a deaf ear – or estimating costs to integrate in the hundreds of thousands of dollars!

You may think that the ability to manage both contingent and permanent employees through a single, unified platform is a low priority for your company at this point in time, and you may be right! So let’s focus on the need to manage the contingent workers and suppliers that provide them. Why is a stand-alone VMS system a problem in this environment? Ask yourself a few important questions:

  • Do you have separate user IDs and passwords for your VMS, your HCM applications, your time reporting systems and other back-office systems? If so, do your users complain of too many passwords to keep track of, and too much time logging in and out of systems in order to get anything done?
  • How do you keep track of former employees who may have returned as contract workers? If contract workers take on multiple assignments with you over the course of the year, do you worry about tenure management, ACA compliance, collective bargaining agreements, or any other concerns tied to the amount of time worked?
  • What is the error rate associated with charging hours worked to the right cost centers and charged codes? How long does it take to process payments? Do your vendors complain of slow payments? If so, they are probably going to direct their attention to more profitable clients.

Leading VMS systems include integration tool kits and adapters that support different options for connection, transport, and format, with inbound and outbound data flows. Here are some features you should look for in your vendor management system.

  • There should be no need to install or change anything at end points or within source code.
  • Going a step further, the VMS should allow easy formatting to produce a very similar user experience across both products.
  • The VMS system should support single sign on, with the user ID provided by the HCM system.
  • Organizational hierarchies specified within the RFP system should be able to drive approval workflows within the VMS.
  • When requisitions are created and candidates are sourced and selected within the VMS, records for these non-employees should be able to flow back into the ERP system.
  • Time and expense submissions approved through the VMS should automatically generate an invoice sent to the ERP financial module for verification and reconciliation.
  • The reporting and analytic capabilities should be able to draw data from the integrated applications, providing a true enterprise-wide view of your environment.
  • Most importantly, the VMS vendor should be willing and able to support your initial and ongoing requests for integration.

Through the continuous flow of information between systems, companies can standardize worker onboarding and off-boarding procedures, increase compliance with federal and local labor laws, and reduce manual efforts that result in wasted time and increased errors.

To learn more about ways in which you can derive more value from your VMS system and increase control over your entire labor force, , download a copy of DCR’s approach to Implementation and Integration.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
An industry veteran, Debra draws on more than 25 years of experience in corporate operations, strategic planning, marketing, sales and management. Her prolific work experience includes service at top computer technology, management consulting, and workforce management companies.