MSP (Managed Service Provier) & VMS (Vendor Management System) terminology

Managed Service Provider (MSP): A company that takes on primary responsibility for managing an organization’s contingent workforce program. An MSP may or may not be independent of a staffing supplier. Typical responsibilities of an MSP include overall program management, reporting and tracking, supplier selection and management, order distribution, and consolidated billing across program suppliers.



Hybrid Program: The blending of different sourcing model attributes to manage a contingent workforce program. Typically a hybrid program would include elements of vendor-neutral and master supplier programs. For example, one provider may act as the master supplier for clerical and light industrial positions while IT positions are competitively bid using a vendor-neutral model across a number of different suppliers.


Master Supplier Program: A staffing supplier that takes responsibility for providing a client with temporary and contract staffing services. In a Master Supplier Program, all orders will usually go first to the master supplier to either be filled by the master supplier or distributed to the secondary tier of suppliers. Sometimes a master supplier will not only provide a significant portion of the temporary staff working at the employer’s site but also manage an organization’s contingent workforce program.


Vendor Management System (VMS): An Internet-enabled contingent worker sourcing and billing application that enables a company to procure and manage a wide range of contingent workers and services in accordance with client business rules. Typical features of a VMS include supplier profiling, requisition/order creation and distribution, candidate submissions, on- and off-boarding, time and expense keeping, vouchering, consolidated billing and reporting. VMS applications and the services that support them are generally required to be SAS 70 Type II compliant.


Vendor-Neutral Program: A term used to describe a model in which a managed services or VMS technology provider handles its tasks (e.g., order distribution or candidate selection) based on client-defined policies that mandate that all (or a pre-defined set of) staffing suppliers (vendors) be (i) given an equal opportunity to fill each order, and/or (ii) selected for each order based on the same criteria. Under a vendor-neutral model, a managed services or VMS provider count not, on its own accord, push orders to itself or any other staffing vendor. The presumed advantage of a vendor-neutral model is that the best supplier with the best candidate will each position.