Vendor management systems (VMS) empower businesses to harness vast amounts of data related to their contingent workforce. When leveraged properly, Business Intelligence (BI) can help business leaders recognize opportunities to improve operations and the bottom line. Customizable VMS solutions can gather critical data and measure different aspects of workforce programs to improve efficiency.
There are three main stages in the cycle of BI – organizing the pool of data, measuring the key areas you’ve identified as important and analyzing the results to implement positive changes.
An integrated VMS with robust BI capabilities can pull data from integrated applications, allowing you to analyze the big picture. You may already be using SAP or Oracle Business Intelligence Enterprise Edition (OBIEE) as a standard data repository. The thousands of raw data elements within can be mapped to create reports that specifically apply to your business needs and perspective. Once your data is appropriately formatted, you can utilize a single sign-on dashboard to leverage your complete body of data.
With an out-of-the-box VMS, you’ll gain access to critical analytics almost immediately. A good Software as a Service (SaaS) platform leverages collective knowledge to create standard reports that provide valuable insights. When you first implement your VMS, you’ll want to utilize these to gauge initial results, but also begin the process of customizing these metrics to fit your long-term goals.
After you’ve analyzed the pool of available data, you must create consensus among your team and determine what information is most important to your business. BI is only meaningful when the measurements and goals are clearly defined, making this an essential step.
Key metrics vary from business to business, and different teams might have different definitions for each measurement. For example, a performance indicator that is based on a length of time requires a strict definition of start and end points. Consider “time-to-fill” – to some, it’s the amount of time from sourcing a potential hire to their first interview. For others, it’s the amount of time from sourcing to position acceptance. And some teams consider the first day of actual completed work “fill.” It is important to work out the official definition before you start measuring.
This will provide your team with the tools to understand how long an approval process takes, how quickly vendors are responding to requests and how long the candidate evaluation process takes – and allow you to conduct root cause analysis and make improvements.
BI allows you to analyze all of the players in your contingent workforce management program: customers, partners and vendors. By using a scorecard with defined key metrics for each role, BI can show quantifiable results of a relationship, which can be used to make decisions and clarify expectations. BI provides proof of reality because it cannot be modified to put any sort of spin on the effectiveness of a relationship.
By conducting spend analysis and research across all departments of a company, you can identify areas that could benefit from cost or time savings and develop a strategy to achieve these goals. You can also identify upsell and cross sell opportunities.
Once a BI dashboard has been implemented, your team can review key metrics and identify opportunities for improvement. For example, you might discover an opportunity to improve the process for leveraging consultants for repeat work. Rather than getting new consultants for every project, you can identify previously successful resources and reassign them to the current projects, which eliminates orientation and training time by capitalizing on their knowledge.
If your business is using a VMS to manage your contingent workforce, you should be closely monitoring the data and measuring success. If you aren’t doing this, you are missing out on an opportunity to improve operations and your bottom line. Getting started with BI seems like a daunting task, but if you systematically work through these three phases, you will soon see significant results that can drive serious improvements.