As Enterprises Scale Their Contingent Workforce, Vendor Management System (VMS) Market Will See 7-10% Growth by 2023--Everest Group
Broader awareness of VMS benefits and rising demand for holistic digital solutions are paving the way for surge in VMS adoption.
DALLAS, Oct. 27, 2021 /PRNewswire-PRWeb/ -- Following a year of stagnation in 2020 (declining 3%), the market for Vendor Management Systems (VMSs) is expected to bounce back and grow at a faster pace (approximately 7 to 11% by 2023) than in pre-COVID times, according to Everest Group.
A Vendor Management System (VMS) is a software application that helps manage and procure contingent talent or the non-permanent workforce. VMS providers typically charge enterprise buyers a fee as a percentage of managed spend.
VMS continues to be an important technology solution for enterprises globally, especially as enterprises increasingly leverage contingent workers as part of their workforce. In recent years, VMSs have not only enhanced the features and functionalities of core technologies, but also expanded the scope of services delivered to other areas within Contingent Workforce Management (CWM), such as direct sourcing and services procurement.
Currently, temporary labor, sourced through staffing agencies, accounts for 60-70% of spend under management by VMS providers. However, changing employment requirements and increasing preference for contingent workforce is leading to a rise in other categories, such as services procurement or statement of work (currently 20-25%) and independent contractors or freelancers (currently 10-15%). Everest Group expects these other segments to be major growth drivers of VMS in the future.
Other Key Trends in the VMA Market
While buyers expect to achieve all three benefits—cost, operational and business impacts—from VMS adoption, they are currently the most satisfied with the operational impacts delivered by their VMSs. A majority of enterprise buyers praise their VMSs for ease of use, but enterprises also seek improvement with respect to analytics capabilities and reporting functions.
Spurred to innovate, VMS vendors are working to develop end-to-end candidate management capabilities, including compliance and shift management; leverage next-generation artificial intelligence (AI) and machine learning (ML); develop strategic partnerships with other vendors; and provide holistic insights leveraging multiple data sources.
These findings are explored in Everest Group's newly published report, "Vendor Management System (VMS) State of the Market Report 2021: Keeping Pace with Rapidly Evolving Buyer Expectations." In this report, Everest Group provides comprehensive coverage of the 2020 VMS market and sheds light on the future trajectory of VMS.
The report includes the Everest Group PEAK Matrix® for VMS, an assessment of the capabilities and market impact of 18 VMS providers. Beeline, PRO Unlimited, SAP Fieldglass and VNDLY are classified as Leaders.
Market Highlights:
- Healthcare; manufacturing; and banking, financial services and insurance (BFSI) are the leading adopters of VMSs, accounting for more than 50% of market share in terms of active deals.
- Engineers/IT and blue-collar job roles together account for more than 70% of market share.
- The small and mid-sized market dominates with two-thirds of the market share, with activity rising rapidly across all buyer sizes.
- Single-country deals dominate the VMS market currently; however, multi-country deals saw an increase in 2020 and are expected to increase further.
- North America is the largest (64%) and most mature of VMS geographies, followed by EMEA (27%), Asia Pacific (7%) and Latin America (1%).
***Download a complimentary abstract of the report here.***
About Everest Group
Everest Group is a research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global companies, service providers, and investors. Clients use our services to guide their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com
Media Contact
Andrea Riffle, Everest Group, +1 (954) 801-8474, [email protected]
Taylor Walker, Everest Group, 6145817938, [email protected]
SOURCE Everest Group
Share this article