Vendor Management System - The Pioneers

The Pioneers

In 1993, one such company recognized the contingent labor spend management niche as an immense opportunity – Geometric Results Inc. (GRI). At its origin, GRI was a wholly owned Ford Motor Company subsidiary and it was GRI who developed one of the first significant VMS applications in the industry, PeopleNet. Originally starting out as a manual process, some system automation was introduced in 1995. A year later, PeopleNet became an automated VMS system. Overall, GRI managed nearly $200 million in spend at Ford. In 1997, MSX International purchased GRI and continued its growth in the marketplace offering a vendor neutral automotive industry.

MSXI later launched a new proprietary Internet software - b2bBuyer, and the program continued to grow with the expansion of MSXI's European operations. Their success is achieved through best in class processes and technology supported by a vendor neutral model. MSXI also created a 51/49 minority-owned subsidiary and repackaged its web-based application as “TechCentral” to service former GM parts supplier, Delphi Corporation. Today, The Bartech Group—a minority-owned staffing supplier and new MSP—assumed the Delphi VMS in 2006 and currently runs the program using the Fieldglass, Inc. VMS software InSite.

During the same time ProcureStaff Technologies also launched a vendor neutral VMS solution for human capital management in 1996. ProcureStaff Technologies spun off as a subsidiary of its parent company, Volt Information Sciences to address the glaring need for vendor neutrality in the procurement of this commodity. ProcureStaff Technologies implemented a vendor-neutral model for its first client, a global telecommunications company, because it promoted competition by opening requisitions up to a larger number of pre-qualified staffing suppliers without bias or favoritism. The benefits realized to the customer included reduced cycle times and lower overall contingent labor spend.

It was not long after this time that other companies, eager to capitalize on the expanding marketplace, entered the fray. Although Chimes was a wholly owned subsidiary of Computer Horizons Corp., the key differentiator between it and other VMS providers that were emerging was that it positioned itself as a “vendor-neutral” provider of Business Process Outsourcing (BPO) services instead of just a technology company that licensed its VMS software. Chimes value proposition was it would create and staff a Program Office (PO) that integrated with the customer’s business Purchasing, HR, and Accounting processes. That is, Chimes realized that simply licensing its software to its customers was a strategy that could not guarantee a successful implementation and realization of the benefits of the VMS concept. In February 2007, Axium International purchased Chimes, Inc. from its parent company (CHC) and merged it with Ensemble Workforce Solutions. The companies together form ECG (Ensemble Chimes Global), the largest VMS provider in the world. Fiscal improprieties led to the unexpected implosion of Chimes (ECG) and its parent company Axium in early 2008. In January 2008, Axium International Inc., the parent of the Ensemble Chimes Global, filed for Chapter 7 bankruptcy in Los Angeles and both Axium International and Ensemble Chimes Global ceased operations. On January 24, 2008, the workforce solutions business unit of MPS Group, Inc., announced that it was the successful bidder for the assets of Chimes.

The Aberdeen Group, an independent research organization, found that less than 17% of companies who have implemented a program to manage their contingent labor workforce have seen an improvement in spend and source-to-cycle performance metrics. This supports Chimes contention that the best implementations are those that include an emphasis on improving business processes versus just selling a tool to a customer.