VMS or EWS?
VMS stands for Vendor Management System. Vendor Management Systems manage the contingent or non-employee (extended) workers of a company. An extended or contingent workforce is the combination of people who provide their skills and expertise to a company who are not employees of the company, this includes contractors and consultants of various stripes.
Wonder why it's called VMS if it doesn’t manage vendors?
When people see the word “vendor”, most frequently they think of sellers of various supplies or equipment. Like office supply vendors, for example. Vend comes from the Latin Vendere and came into English via the Anglo-Norman French Vendour, both mean “to sell”. And so, the English use of the word Vendor came to be someone, or a company, that sells materials of some kind – and in certain circumstances a machine that sells something, as in a vending machine.
Still, the leap from a vendor to a non-employee worker is not obvious and can create much confusion in the workplace, especially if you require a system to organize your office vendors, which would not be a VMS.
A Bit of History
Vendor Management Systems are a relatively recent advancement in managing non-employee labor spend. Beginning in the late-1980s through the 1990s when large organizations began looking for ways to reduce their spend on non-employee workers and get more visibility in their costs, the concept of the Managed Service Provider (MSP) — sometimes referred to as Vendor-On-Premises in the early days — was born. In a short period of time the industry evolved quicky, yet the vocabulary used lagged this innovation and some terms like Vendor, despite its shortcomings in properly defining the subset of workers it’s used to describe, stuck.
The Link Between MSPs and VMS
An MSP is a contracted agent of a company that manages all its customer’s other contractors, or extended workforce, operating as a master contractor. An MSP is responsible for on-site management of their customer’s temporary help or contract worker needs (extended workforce). Instead of a single company hiring and managing relationships with multiple staffing agencies (aka suppliers, or vendors as they are sometimes called on the procurement side) and contractors, writing multiple checks every month to these dispersed entities, they could now write one check to their MSP and funnel all of their extended procurement cost to one contractor. MSPs began referring to their partners as vendors instead of staffing agencies because the world of procurement referred to “buying talent” from suppliers, just as you would buy various supplies for your business. Thus, the word “vendor” became the de facto term for their partner staffing agencies that would go on to use this new software that was emerging.
MSPs are the biggest users of VMS technology, although smaller programs sometimes buy the software without an MSP relationship and manage their own external workforce in-house. The first VMS was developed in the early 1990s and the first VMS with system automation came around 1995. 3 Story Software (3SS) was born in 2007 based on the principle that fewer clicks means increased take up and fewer errors. Our 3 layers of architecture – user interface, physical and logical architectural layers serve the 3 user types: clients, staffing suppliers and workers.
Let’s Evolve
At 3SS, we’re interested in helping the industry evolve and reducing confusion. Part of this initiative means making what our software does very clear and helping evolve the industry standard name — VMS — to Extended Workforce Management System (EWS). This reflects our commitment to growth and serving our clients #1 goal: clarity and visibility. That’s why throughout our website you won’t see us refer to Vendor Management Systems (VMS), as this name poorly reflects what our software was built to do. Instead, you’ll see terms like contingent labor, extended workforce, or extended workforce management systems (EWS).
To find out more about how 3SS can integrate into your organization, request more information today.