We live in a digital world. Consumer, business, personal…digitization has changed the ways we buy, live, and work. The amplification of technology has become an omni-present source of data-driven, intelligence-fueled decision-making that permeates the fabric of nearly evert facet of, well, life.
If we can step back for a moment and look up at the logo in the left-hand corner of this website, you’ll quickly realize that we’re driving towards the concept of digitization within the confines of “work,” and, of course, talent. (Yes, I agree that “the digital world” is all-encompassing and, in some weird, sci-fi visionary way, technology in business and technology in our personal lives are interconnected in some profound way…but for the sake of the direction of this website and Ardent Partners research, today we’ll stick to the enterprise arena.)
Of course, work and talent are symbiotically linked in a reflective way; one doesn’t exist without the other. And, when we talk about work and talent, there is a clear and definitive pathway to extended labor (aka “the contingent workforce”) as a critical cog.
Ardent Partners and Future of Work Exchange research point to nearly half of all enterprise talent today as comprised of non-employee/external/extended/contingent labor. And, with nearly 80% of organizations prioritizing the strategic value of the contingent workforce, the very concept of “digital” takes on new meaning.
For years, I’ve described Vendor Management System (VMS) technology as a journey: originally considered as “eProcurement for staffing,” VMS platforms traversed beyond its 1990s design and evolved in lock-step with the very type of talent it was conceived to optimize. As the contingent workforce grew in both size and impact, so did the technological influence of VMS solutions.
Over a decade ago, I wrote that VMS platforms served as the veritable “nexus” of the talent technology ecosystem, owing its role in the center to the fact that, as the contingent workforce became more impactful, so did the value of VMS-led automation. Today, VMS is still the nexus…albeit in a much different way.
The nexus doesn’t work as well without its peripheral support system. The modern-day Managed Service Provide (MSP) model is the service mirror to VMS’s technological foundation. Direct sourcing automation is the viable lever to expanded talent pools and talent communities. Freelancer engagement systems shoulder the independent contractor compliance load. AI-led skills intelligence platforms amplify, well, skills-based hiring (and, of course, data-driven decision-making). Learning and development platforms envelop a deeper connection with training and L&D strategies. Shift management technology boosts the power of VMS within light industrial CW programs. Skills assessment solutions ensure that any skills-based hiring strategy actually, you know, works, and also addresses the rising problem of candidate fraud. And so on.
So, with all of that said…where are we today? What is the actual state of VMS technology?
- If VMS platforms are the nexus of extended workforce management, then…AI is the nexus of VMS? Yep, 100%. The fusion of artificial intelligence and VMS functionality is synergetic force of innovation that can catalyze the workforce solutions arena. From the agentic AI framework within Beeline’s Enterprise platform and SAP Fieldglass’ expansive Joule assistant, to Conexis VMS’s Nexi AI agent, Magnit’s powerful Maggi AI overlay, and Flextrack’s Salesforce-Lightning-enabled architecture (providing a powerful experience with Einstein AI, Flex GPT, and agentic intelligence), the omnipresence of artificial intelligence within today’s VMS platforms translates into a talent management solutions arena that truly embraces the innovation behind the Future of Work movement.
- The extension of extended workforce management. Back in June, FOWX highlighted how Beeline’s acquisition of MBO Partners was a gamechanger. Nearly three months later, I’d like to think that we were right. Even Best-in-Class contingent workforce programs fail to capture and manage independent contractors and freelance talent; the MBO dynamic fits in perfectly with one of the market’s leading VMS platforms…because even the nexus needs an extension.
- Total talent, totally. Let me say this very pointedly: too many industry voices enjoy discrediting total talent management (or total workforce management, if that’s your jam) because the strategy is believe to be either overhyped or just theory (or both). External and FTE workers managed under the same umbrella of solutions, services, functions, stakeholders, etc.? Yeah, on the surface it can seem nearly impossible. Here’s the reality, though: total talent as a viable enterprise initiative needs the right tools, the right attitude, and the right balance of inter-functional collaboration. VMS platforms can easily integrate with HRIS and other HR and workforce-oriented systems, plug-and-play from a data-sharing perspective, extract and analyze information in real-time, and portray those insights in an on-demand fashion…all to help businesses make quicker hiring decisions on the best-fit resource or worker given the scope of…the enterprise’s total talent. Not so daunting, is it? What SAP Fieldglass has achieved with its seamless SAP SuccessFactors integration is total talent management at work. The platform’s Total Workforce Dashboard is a Future of Work reflection of on-demand, total talent intelligence and real-time hiring insights for both FTEs and external talent.
- “Service layers” are the next frontier for VMS solutions. Integrated MSP and VMS is nothing new; in fact, it’s something that’s been a foundation of Magnit for years (ProUnlimited!). The natural, harmonious integration between the solution’s services and technology is honestly a boon for the next generation of contingent workforce management. Businesses may require an added touch of white-glove service when dealing with services procurement and SOW management, or may need that extra, added edge when bridging the gap between direct sourcing ideation and execution. And, as Magnit as experienced first-hand with its Magnit Platform, the coordination between service-layered integration (MSP and VMS) and AI is the pathway to the Future of Work.
- Sometimes, innovation can be found in unexpected places…like in Salesforce? Salesforce honestly isn’t the first enterprise engine that comes to mind when discussing contingent workforce management, however, Flextrack’s foundation (built on and native to SFDC’s Lightning platform) translates into enterprise-grade infrastructure, powerful configurability, seamless integration, and real-time analytics, all while future-proofing (through Salesforce’s nearly 80 annual technology upgrades and updates per year) its VMS functionality as the market evolves.
- Purpose-built for industry scalability. One of the dynamic attributes of VMS technology over the past decade is its propensity for industry-agnostic functionality; that is, no matter the sector, the power is there for extended workforce support. However, some industries, like healthcare and life sciences, that are experiencing both contingent workforce growth and increasing complexity, may need automation that traverses sector neutrality. Filling and managing shifts or tracking spend, yes, but there’s also credentialing, compliance, clinical workflows, and a whole lot of operational nuances. Platforms like Trio Workforce Solutions are actively embracing the transformation and are changing the ways the healthcare and life sciences sectors find, engage, and manage the external workforce.
- Marketplace mechanics meet workforce reality. As organizations expand globally and sourcing becomes more fragmented, traditional workforce solutions often struggle to keep pace with the speed and complexity of modern contingent hiring. By embedding marketplace dynamics into its core architecture, innovative provider Eqip proves that modern-day extended workforce management requires the next generation of VMS technology. Faster access to verified contractors and niche skill sets, combined with “digital MSP” architecture, shine a light on how platforms like Eqip are pushing the boundaries of what VMS can do.
We’re not finished discussing the state of the VMS arena. Stay tuned for Part II.
