What Are Vendor Management Systems?

M. McGee

Vendor management systems are computer programs that assist businesses in streamlining the hiring and usage of workers and suppliers from outside the business. Many businesses use workers, either freelance employees or contracted labor, who are not technically members of the business’s actual workforce. These additional workers may fill temporary positions or perform a highly-specialized labor. Vendor management systems keep track of these workers and their jobs to help simplify their overall usage.

Businessman with a briefcase
Businessman with a briefcase

In general terms, a vendor is someone that sells something to someone else. In business terms, it will usually have the implication that the thing sold is labor or expertise and that labor remains separate from the hiring company. This is the origin of vendor management systems, literally a system that keeps track of hired workers.

Typically, vendor management systems are web portals that allow many different groups to all interact through the same system. These programs will have areas for people hiring and people selling services. This will let the individuals meet in a virtual space, exchange requirements and qualifications and get historical data in a quick and streamlined way. As a result, this fast-tracks the hiring process so jobs can be filled very quickly.

Many of these systems also have a section that operates on the user’s internal network. This portion of the program keeps track of payroll and tax information as well as other company details that relate to the temporary worker. This service allows the hiring business to keep track of all the important information for the worker, but keep the temporary profile out of the normal computer system.

These two halves will work together to form a database of information for all the users of the program. While sensitive information may be kept private, public information came be searched as needed. For example, a business may want to find a temporary worker for a sensitive job. The available workers may be profiled in the vendor management systems to find a person that both has the necessary qualifications and also a trusted work history. The qualification part would come from the worker’s profile while the history would be gathered from the individual companies he worked for in the past.

These types of programs will also keep track of permanent workers who are outside the business structure. For example, a hospital may have a series of doctors, nurses and technicians who work for the hospital which work side-by-side with private practitioners. The private practitioners may have offices and rooms inside the hospital, but they are outside of the normal workforce.

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