ERE.net » Gregory Donovan

Using VMS Technology To Achieve Diversity Goals

Gregory Donovan — Mon, 27 Jan 2003 19:00:00 +0000

Have you ever thought how HR and recruiting technology can help with corporate diversity spending initiatives and programs? Read on to find out how vendor management services (VMS) technology for HR and recruiting departments can help companies achieve these corporate diversity spending objectives through the acquisition of contingency labor. What Is Diversity Spending? Diversity spending is the aggregate value of purchases in the acquisition of materials and services from minority vendors and suppliers, in relation to a company’s overall spending. These minority businesses are usually designated or certified with a M/W/DBE (Minority/Women/Disadvantaged Business Enterprises) or SBE (Small Business Enterprises) status. The goods and services classified under diversity spending initiatives can be unlimited ó from offices supplies to catering services to contingency labor. Historically, diversity spending efforts have been the responsibility of procurement or supplier diversity departments. Many of the larger, publicly held Fortune 1000 companies have strong programs to help diversify their spending in an attempt to at least offer an equal opportunity for these M/W/DBE suppliers to participate. Other companies have gone as far as to designate a percentage of overall spending for M/W/DBE companies in order to level the playing field. While these programs stand alone as excellent initiatives to promote supplier diversity within companies, finding the qualified suppliers that can compete and provide these services is another obstacle. The vast majority of M/W/DBE’s historically have been privately held, smaller suppliers and vendors with limited resources and infrastructure. Many of these suppliers do an excellent job in servicing small- to mid-size businesses, but find it a challenge to service larger, more complex organizations. Smaller M/W/DBE companies can get lost in the bureaucracy and logistics of larger conglomerates. A Fortune 500 may open up the field to provide the opportunity for M/W/DBE’s to participate, but their complex internal processes and sheer infrastructure size alone can eliminate interest of these types of suppliers. Of course, there are always exceptions to the rule. But I have found this to frequently be the reality, particularly within the staffing industry, as smaller, regional M/W/DBEs try to compete with the majors for a piece of Corporate America’s business. There are a few national M/W/DBEs with the infrastructure and experience to service Fortune 1000 companies, but these companies comprise of a small fraction of the overall market of diversity staffing suppliers. Why Is VMS Technology Important to Hr Professionals? As most of us know, it is estimated that anywhere between three to five percent of the country’s workforce is contract or contingency labor. During recovery, that number typically increases, as some full-time workers once downsized usually come back into the workforces as contract or contingency labor. Some Fortune 1000 companies estimate the volume of their contingency labor spending to be in the billions of dollars. Some of the more progressive companies have organized and reviewed the way contingency labor is not only acquired within their respective organizations but also tracked and reported through the use of technology. This is where the use of VMS technology can make a significant impact in not only reducing direct supplier costs, but also help achieving diversity spending objectives for a company. The first solution is the most obvious, but we’ll state it for the uninitiated. There are several VMS providers that not only provide a good tool and service for the acquisition of contingency labor, but also are M/W/DBE companies! Again, they make up a small fraction of all VMS providers, but they are out there. In an earlier article for ERE, I mentioned the five different elements of an enterprise VMS solution ó namely 1) requisition management, 2) vendor management, 3) time and expense capture, 4) consolidated billing/invoicing and 5) management reporting. Let’s focus on the consolidated billing piece for a moment. Through consolidated billing, a VMS vendor usually manages the contracts a company has in place with their staffing suppliers. This relationship is more of a partnership around the billing process. Since the VMS provider consolidates all approved contractor time and expense, the VMS will usually manage the entire billing process. In short, the VMS receives payment from the client for all contingency labor spending and, in turn, pays all the staffing suppliers. Now, if your VMS provider is a M/W/DBE, you have an opportunity to capture a significant amount, if not all, of the spending under one roof. For example, if your company does, say, $100 million in contingency labor spending through the VMS provider, then your company has the opportunity to capture all of those expenditures as diversity spending, as long as the billing is going through the vendor’s technology. Some companies I have worked with do up to $500 million in contingency labor spending annually and are able to reap the benefits of consolidated diversity spending under a M/W/DBE provider. The bottom line is, by doing what your business would normally do anyway ó such as the acquisition of contingency/contact labor ó you can help your company achieve diversity spending goals. Tracking Diversity Spending Even if your vender is not a M/W/DBE, there is still an opportunity to at least track the diversity spending of your staffing suppliers. First, diversity spending can be captured particular to those staffing vendors that are minority owned. Since there is a far greater supply of staffing M/W/DBEs than VMS M/W/DBE’s, at least some of your contingency labor spend can be tracked and captured as diversity spending. Having a VMS in place guarantees this spending to be captured real-time with a high degree of accuracy. Without a VMS in place, this spending can still be captured, but it is generally a manual process that involves ongoing participation from several different parties in the billing process. If there are any errors in coding, tracking, monitoring, and reporting with staffing suppliers, A/P, or Disbursement, Supply Chain, HR, etc. ó then tracking of your company’s diversity spending will be inaccurately reported. Normally, each invoice, whether manual or electronic, needs to be specially coded in order to designate minority suppliers. What VMS technology does is to automate this process on the front-end, so all diversity spending is captured at approval, usually on a weekly or monthly basis. Capturing this spending real-time supports the reports-on-demand feature of this technology. Companies can report under the VMS technology at any given time the percentage of diversity spending in relation to overall spending at any moment. In conclusion, HR and recruiting folks have the opportunity to make a greater impact on diversity spend initiatives with the use of technology in today’s world than ever before. By rethinking the way your organization acquires contingency labor, you’re likely to find greater positive impacts on your organization than you originally realized on your first pass of the technology.

Choosing a Technology Solution to Manage Your Contingency Workforce

Gregory Donovan — Mon, 25 Nov 2002 19:00:00 +0000

If you’re looking for a vendor to manage your contingency workforce, the first crucial step is to understand the difference between a managed service provider (MSP) and a provider offering vendor management services (VMS). A true MSP usually offers five core elements:

Requisition management

Vendor management
Contractor time and expense (T&E) capture
Consolidated billing
Business intelligence reporting modules

The VMS will offer the same technology, with the exception of consolidated billing and varying degrees of service. While all MSPs in this space are VMS providers, not all VMS providers are MSPs. Understanding the difference between the full-service MSP and the technology-based VMS will be critical in establishing a solution that will not only save your company money from lower direct supplier costs and streamlined processes, but also help scale your company’s contingency workforce growth. Many MSPs will either offer their solution as a package (all five pieces as one solution) or break out the technology depending on the needs of the customer. Some companies may only want the requisition and reporting modules for instance, while others may want T&E capture and consolidated billing. The Value of Consolidated Billing The first major difference between a MSP and VMS is consolidated billing. An MSP will have the capacity to manage all of your suppliers and sub-tier invoicing and billing. In short, the customer pays the MSP for all approved contractor time and expense, the MSP in turn pays all the suppliers. The benefits are consolidated billing for the customer (cost savings) and consistent and timely payment to the suppliers. Many suppliers have been won over by this model because payments have become timely and predictable. For instance, if a customer pays the MSP within 30 days of invoice, the MSP may contractually pay all suppliers within five business days of receiving that payment. Suppliers are able to forecast payment and receive a consolidated monthly check for all approved contractor time and expense. Now, imagine a Fortune 500 that historically receives thousands (or tens of thousands) of contingency labor invoices for all their contractors only receiving one electronic invoice monthly from the MSP. Most companies will average in the ballpark of $30-$50 in costs to process each invoice. Over time, the cost savings due to consolidated billing for a sizable company could be hundreds of thousands of dollars per year in conservative estimates. One customer I worked with recently estimated the average cost to process one invoice to be over $150.00! Multiply that by 500, 5000, or more, and you are looking at some real savings. Most VMS providers, however, generally do not have the financials to carry the “float,” or the contingency labor spend for most tier-one organizations. Many of the MSPs are either large established staffing companies or divisions of these types of companies, and generally do have the financial backing to manage large contingency labor floats for their customers. It is a lot easier for a large staffing company with, say, $500 million in revenue, to carry a $100 million customer contingency labor spend than a VMS with only $20 million in funding under the belt looking for that next round of funding to manage a large customer spend. This scenario is quite real and should be considered in determining your MSP or VMS. The Value of Service The second difference is service. Most MSPs will provide onsite resources as part of the service that is factored into the pricing. With hundreds or thousands of potential users, many MSPs see the onsite resource at the client’s site as a critical piece for success. The onsite presence will increase the visibility of the MSP and the service levels for the customer during the technology adoption process, the training of users and contractors, the handling of staffing suppliers, the managing of the invoicing/billing process, problem resolution, and generally working with the customer to maintain the entire contingency labor acquisition and management process. But many VMS do not have the bandwidth or financials to carry onsite staff. In many cases, once the technology is deployed, the VMS passes the some of the responsibilities to the customer for the maintenance of the application and the training of users. The VMS model can work very successfully, though, depending on the size of the organization. The needs of a company with 100 contractors onboard is significantly different than those of a Fortune 500 with 10,000 contractors. As the contractor volume expands, so does the need and requirement of higher levels of service to the customer. Just as an MSP probably will not be cost effective for an organization processing only 50 contractors annually, a VMS could be seriously stretched in resources, financials, and operations in the processing of 500 or 5000 contractors for an organization. Evaluate the MSP or VMS service policies and implementation methodology before choosing your vendor. Look at historic hiring volume and try to determine forecasted contigency labor needs before making the jump with either a MSP or VMS. The Vendor Neutral Model Much has been said over the years about the need for a vendor-neutral technology and model. However, many of the top MSPs have naturally grown out of the staffing industry. While these MSPs can offer a host of benefits due to the leveraging of their staffing experience, this scenario does offer its own challenges and complications. Several of the major MSPs will offer the onsite personnel to increase service but also sell the customer on the “primary” relationship ó or having first crack at all contingency labor needs. Depending on the MSP, this model can be very successful for the customer ó or it can fail miserably. Part of the basis of moving towards an MSP for a company is to increase the competitiveness of its supplier base. Utilizing a preferred supplier on all contingency workforce needs can put a customer at risk Now, not all MSPs that derive from the staffing industry promote this model. Some will offer this model if the customer demands it. But they also understand the value of the supplier partnerships. It’s not the technology that ensures the vendor neutrality, it’s the proper management of this process that ensures the integrity. Since this is a client-directed model, the MSP or VMS should be directed as to what suppliers are included in distribution of their contingency labor needs. Find the MSP that will work under your direction and partner with your suppliers whatever the model your organization decides. The MSP may also very well be a supplier to your organization. However, the utilizing of a diverse supplier base will only increase the quality of your contingency labor pool ó and lower your direct supplier costs! The Value of Partnerships As stated above, the power of supplier partnerships can be a powerful force. Many staffing suppliers have historically viewed MSPs and VMSs as a threat. Several MSPs have made great inroads over the past few years by embracing many of the major and niche staffing suppliers as partners. As difficult as some staffing suppliers can be a times, many are truly critical to the growth of your organization. Finding the right MSP or VMS that will embrace your existing supplier base is an important factor in evaluating the right solution. In reality, many of your historical suppliers will eventually fall off due to poor performance. With a MSP or VMS in place, all supplier data will be captured for business intelligence reporting, including supplier performance metrics. Over time, certain suppliers will naturally perform better than others, with quicker response times, higher quality candidates, lower margins, and better customer support. These are the suppliers that you want in your long-term growth plan. The MSP/VMS model rewards those vendors by (through the client-directed process) offering greater access to work a higher volume of contingency labor needs in return for marginal lower supplier costs. This is a natural benefit of this model. Conclusion If the relationship is communicated and managed properly between the MSP/VMS, the customer, and the suppliers, the model can be made to work well. Many staffing suppliers today realize the opportunity in lowering their mark-ups or margins in return for greater opportunity of volume, especially in this economy. In the end, the customer can realize direct lower supplier costs, soft dollar savings through process efficiencies, and an increased contractor quality pool.

Labor e-Procurement Technology Explained

Gregory Donovan — Thu, 22 Aug 2002 19:00:00 +0000

Over the years, I have heard labor e-procurement technology referred to by many different names in branding campaigns, including human capital management software (HCMS), hourly worker management software (HWMS), hourly hiring management systems (HHMS), contingency workforce software, and others. Regardless of what it is called, this technology is essentially just an enterprise procurement tool that streamlines your recruiting processes and lowers the costs associated with the acquisition of your contingency workforce. But since the technology is a tool for your contingency workforce, confusion often exists as to who the originating buyers and owners of this technology are within an organization. Human resources, procurement, shared services, legal, and IT can all be contributing buyers or influencers within a given company. For example, in a recent experience of mine, I observed three different groups of a major financial institution (HR, IT, and procurement) unknowingly pursue independent acquisition of this technology. Nonetheless, when your organization is ready to move forward, each group can be valuable, if not critical, in the research, selection, and negotiation of these tools. In today’s market, understanding the role of labor e-procurement technology has become increasingly more difficult as technology vendors continually push to build single-source solutions that encompass many recruiting, HR, and procurement functions all in one application. Unfortunately, fragmented industry promotion and unique vendor “brandings” have created much confusion of the role of this technology for many prospective buyers. In this article then, I would first like help better define the role of labor e-procurement technology within the organization, and second, outline the major benefits and potential limitations associated with this technology. WHAT IS LABOR E-PROCUREMENT TECHNOLOGY? A true enterprise e-procurement solution should consist of several components, including requisition management, vendor management/workflow, time and expense, consolidated invoicing/billing, and reporting. Each piece of an enterprise solution is described below: 1. REQUISITION MANAGEMENT The procurement process kicks off with the creation and approval of a requisition for a contingency worker. Most labor e-procurement solutions are rules-based, allowing designated users (usually hiring managers) to create requisitions for contingency workers. The requisition flows through the client-dictated approval process, as would a requisition for a direct hire. The technology usually allows for unique requisition approval processes based on individual users, groups, or divisions, even company-wide. Each party in the approval process is notified via email once a requisition enters his or her workflow and can usually link back into the application to approve or reject the requisition. Once completely approved, the requisition enters the vendor workflow phase. 2. VENDOR WORKFLOW AND MANAGEMENT The vendor management piece is also client-directed. This process is determined solely by the client and generally can be configured again on a user, group, or global basis. The client dictates which vendors receive the approved requisitions. In certain cases, special staffing vendors receive open requisitions with specialized requirements. This process can happen real-time or on a time delay depending on the client process. Some consulting organizations with labor e-procurement solutions in place use a time-delay feature to check the bench (consultants not currently assigned to a project) or to reference consultant skill sets against open requirements before external distribution to staffing vendors. Most clients expect to see better efficiencies in their recruiting process due to the single, streamlined process. Maverick hiring managers or overly aggressive staffing vendors are roped into following one client-directed recruiting process for acquisition of contingency workers. Candidate management and selection workflow are also managed from the application. This aspect of the technology does have limitations as a “standalone” solution though. Labor e-procurement technology is still quite dependent on the “human element” to actively manage the staffing vendors and ensure the integrity of the recruiting process. Some of the technology vendors make the mistake of branding their application as a vendor-neutral, turn-key technology solution. But the effectiveness of this tool is directly affected by a designated resource, whether supplied by the technology vendor or an internal resource of the client, to be accountable for vendor management. There is a level of buy-in from staffing vendors that is required for the technology and process to be effective. The designated resource(s) ensures opportunity, integrity, speed and management of the recruiting process by reducing preference to specific staffing vendors for most open requirements. The designated resource also is accountable for any issues and problems that occur during this process and is a key component to ensure effective communication between client and staffing suppliers. 3. TIME AND EXPENSE Once a contingency worker is on board, all time and expense is entered into the application usually though a web interface. Having a time and expense system in place to capture, manage, and process all timecard data and expenses is a standard piece of a labor e-procurement solution. Most technology vendors should be able to adapt the tool to the client environment. While the standard is a web-based solution that allows contingency workers to add billable time in a 24/7 fashion, not all companies maintain a “web-savvy” employment base. Therefore, make sure your technology vendor integrates with other hardware, such as swipe card or scanning technology for instance, to capture this data. Managers should have the option to approve, manage, and report contingency worker time and expenses from this module. Once a contingency worker’s time is added into the solution, the approving manager is notified of the transaction in the system and can either approve or reject the time. Once time and expenses are approved, the data is fed to the invoicing system real-time. 4. BILLING/INVOICING By having an invoice management in place, the client is able to outsource this complex and labor-intensive process to the technology vendor. Since all contingency workforce data is captured and approved in the system, the technology vendor can manage invoicing for the approved staffing vendors directly with the client. Only data that is captured and approved in the application is invoiced to the client. The technology vendor handles all management of billing to the client and payment to the staffing vendors. The capture of approved data ensures the integrity and timely payment to staffing vendors. This is an area of much sensitivity, with many staffing vendors apprehensive about a third party intervening with billing on behalf of their respective organization. However, with the right technology partner and clear and consistent communication, this relationship can be successful and profitable for the client as well as the vendors. As we know, nothing improves relationships better with staffing vendors than timely and consistent payment of invoices! 5. REPORTING Finally, most technology vendors provide in-depth reporting capacity. Information captured from your contingency workforce time and expense system can be tracked against projects and budgets. This reporting allows executives to see the big picture on global projected costs and forecasts — or allows line managers to drill down into line-item costs per project. Again, the format is generally through a web portal, and real-time, 24/7 report generation is usually the standard. BENEFITS AND LIMITATIONS Now that we know what labor e-procurement technology is, what are its major benefits and limitations? * PROCESS. We can come up with many scenarios depicting the translation of costs savings due to increased process efficiencies. If the process is managed through the technology, the rogue vendors (and hiring managers!) can be easily roped in and enterprise staffing costs managed and forecasted on a more consistent basis. Labor-intensive administrative tasks are reduced. Candidate workflow, time and expense data, invoicing, and reporting are managed under one roof — real-time, 24/7. Although there is a cost associated with an assigned resource to manage the process and vendors, most organization should experience a return fairly quickly after adoption. * REDUCED STAFFING SUPPLIER MARKUPS. The largest potential for mass savings for clients comes from the improved financial relationship with staffing vendors. It is generally recommended to streamline vendors during the adoption and deployment of the technology. Since volume generally increases, many companies take the opportunity to negotiate better contingency worker rates and margins with their staffing suppliers. Many staffing vendors will be more than happy to reduce markups significantly in order to be considered as a preferred vendor or tier-one staffing provider to your organization. However, your organization still may lose some preferred staffing vendors who do not want to take adjustments to their margins. It is critical that your technology vendor work closely with your staffing vendors to communicate the benefits of the technology — such as greater volume, quicker payment, and improved client/supplier relationships — and not isolate and remove them from direct communication with the client. * QUALITY AND SPEED. One of the core features of this technology is the promotion of a vendor-neutral environment. Staffing vendors will have an equal opportunity to work open requisitions, thanks to the process. Ultimately, this should increase the quality of the candidate pool presented to your hiring managers. However, the technology does distance your staffing vendors from the hiring managers. Staffing vendors with long-term relationships in place with hiring managers may feel isolated or even threatened by the technology. Although the technology is in place to increase quality and reduce cost, it is again critical to work with staffing suppliers as partners through the technology — and not just as expendable resources. * CONSOLIDATED BILLING AND IMPROVED VENDOR MANAGEMENT. Outsourcing vendor invoicing and consolidating billing reduces the need for internal resources to perform this function. By completely managing the invoicing process, staffing vendor generally can get paid in a timely and consistent fashion within contractual payment terms. Timely payment to staffing vendors can help improve the client/supplier relationship and hold the technology vendor accountable for this function. CONCLUSION A labor e-procurement solution can be of great benefit to your organization if you experience significant costs associated with acquisition of your contingency workforce. The greater the potential volume of hiring needs for your company, the greater the potential cost savings. The adoption of preferred suppliers, reduction in staffing vendor margins, internal process efficiencies, and consolidated billing all contribute to the benefits. However, it is critical to understand the value of each piece of this application to your organization and how it can impact your enterprise before you consider one of these solutions. In selecting a technology vendor for labor e-procurement, make sure your vendors clearly understand the value of your staffing supplier relationships. The key to the success of this technology is the suppliers. Effective communication and management of the supplier base ensures quality of the candidate pool. At the end of the day, the buyers are your hiring managers, and the quality and speed of the contingency candidate pool will be one of the defining factors in the success of this technology. But by properly managing the client and suppliers, the technology can help improve quality and reduce costs for your organization.

Purchasing an ATS: What You Need To Know Before You Sign

Gregory Donovan — Wed, 10 Jul 2002 19:00:00 +0000

In my experience in the recruiting space, I am continually amazed at the “don’t ask, don’t tell” relationship that exists between applicant tracking system vendors and their customers. As I write this, companies across the country are locking into agreements and contracts that put their respective organizations and the reputation of their internal buyers on the line. While there seems to be an art to this process, the reality is that the ATS selection and purchase process should be more of a science. For the initiated, this may be a refresher. But for those novice purchasers, take heed! Below are some issues to be watchful of as you review and ultimately sign on with an ATS vendor. This is by no means a complete list. We will assume for the purpose of this article that the ATS you have selected has all the bells, whistles, and features you are looking for in an e-recruiting solution. This list, at a minimum, can serve as a recap before you sign on the dotted line. Pricing When drilling down into negotiations, think of one word: “collaboration.” If your vendor wants to charge you on a “per-seat” basis, then negotiate a different pricing model, or find another vendor. This may be an unorthodox point of view, but advances in the technology in this space mean that now more then ever, collaboration is a requirement. The larger the organization, the greater the benefits of collaboration. Some of you may think I am crazy for bucking the “good old” model, but one of the basic fundamentals of an ASP-based applicant tracking solution is its ability to capture, manage, and share candidate, requisition, and reporting data enterprise-wide, real time, with anyone in your organization. A vendor that charges on a per-seat basis in this space is only penalizing you on the full use and potential of an applicant tracking system. If per-seat is the only pricing model available, the application being pitched to you was not designed for enterprise-wide collaboration. We are in the digital age, not the stone age. Fostering real-time collaboration between recruiting or HR folks (i.e. the influencers) and hiring managers (i.e. the buyers) is critical. Even in this down economy, the fight continues among most companies in winning the war for top talent. If your organization is highly decentralized, like many companies, then many hiring managers, recruiters, influencers, and executives are in remote locations all over the globe, and the need for collaboration becomes even more critical to your business. On a side note, Most applicant tracking systems are rules based anyway, so adding or deleting users within the application with varying degrees of security and user access should be as easy as pie. If most users in the organization were loaded during your deployment, then additional maintenance would only be incremental for your ATS administrator. Hosting Bring it in house if you can. The trend in the late 1990s for buyers was a move towards the ASP model. However, many companies became “at risk,” because their vendor’s hosting provider closed shop one day with their data. (Do I have to mention how many hosting providers are either in or near bankruptcy?) Yes, you may have signed a service-level agreement with your ATS vendor including downtime and/or disaster clauses ó but what about your ATS vendor’s service-level agreement with their hosting provider? Let’s say your ATS vendor does their own hosting, how do you really know what you are getting? Are you planning on visiting the vendor’s facility and operations? Yes, I know what you’re saying now: you have clauses for these protections (which is indeed important) and probably even have some type of money-back guarantee or such. But if your ATS is truly mission critical to your recruiting operation, then you can’t go dark for 10 minutes, let alone 10 days. Does anyone really care about the money-back guarantee if your recruiters can’t access the data and workflow for days? If you think this doesn’t happen, think again. As a consultant, I have unfortunately seen this scenario happen more than once. Keep it simple: If you purchase an ASP-based ATS, host it yourself. It may be a little more work for your IT staff, but the security will be there. ASP vendors and hosting providers generally double or triple redundant back-ups for you. However, the data is rarely sent to the customer during the life of the contract. Be smart, put in the contract that you want your data monthly on CD in a format that’s easy to import if you don’t opt to host your ATS. Don’t wait until the contract is finished to request your data. If you have been unhappy with the solution over the life of the contract, the vendor may not send you your data until the contract is paid in full. Be aware and don’t fall into this trap. You may be cutting a large check just to get your data in the end. Disaster Clauses You must have heard the rumor that technology companies go out of business too. What happens to you if that’s your vendor? Make sure that some unforeseen event doesn’t take your recruiting operation out with it. At least have a disaster recovery clause in your contract that puts the code in escrow in an event of disasters on part of your vendor. Again, if the ATS is in-house, you are better off. In recent events, several ATS vendors (including one that has been in the space since the early 1990s) closed their doors with little or no warning to customers. Don’t assume vendors will always be working in your company’s best interest. Financials Ask for and obtain a copy of your ATS vendor’s financials. If you are going to spend hundreds of thousands of dollars on a recruiting solution and commit to a vendor, make sure they will be around three months after your go-live date. In this economy, there’s no guarantee that even the financially sound vendors will be around tomorrow. If your vendor holds the line, then there may be something more to the story than they’re telling you. Investigate, research, and ask for this information. References This is one of my favorites. Most vendors will offer up references to you. These references, not surprisingly, usually come from companies that are happy with the application. Before you sign on the dotted line, take a look at their client list and pick three companies from that list to speak with in person and in a timely fashion. Don’t settle in letters of reference. True, no one vendor is perfect in the software industry. As a buyer, I would say that a 90-95% positive account reference rate is not too shabby (yes, we all shoot for 100% ó but I am also a realist!). If you get three decent references from three attempts, you probably can sleep better at night knowing your ATS vendor will probably delivery on their promises. Support Generally, when financials are bad, vendors cut support first. Make sure your ATS vendor is holding their contractual obligations on support issues. Find out what the escalation process is for support and if you have any dedicated resources. Find out when within the escalation process critical issues get the attention from upper management. Ask if your ATS vendor has a CRM or knowledge-based library for reference support. If not, you may find your users calling support often with the same technical and customer support issues continually. Many buyers fail to thoroughly consider the ATS vendor support model on the front end because we don’t expect to have issues and problems on the back end. The Actual Contract Get it in all in writing! Much can be promised during the sales cycle and then forgotten during the services/delivery cycle. Sometimes, the participants in each cycle can even be different groups altogether on the client and vendor sides. The bottom line is that expectations are set during the first contact with an ATS vendor and should be managed to your satisfaction throughout the entire process. If a sales rep tells you that an ATS will be able to do “this or that” in the next release, or a custom job can be done without discussing pricing, get it in writing ó ALWAYS. The signed contract, including the service level agreement, is your bible. Make sure you know exactly what is “in scope” for your ATS deployment and what is out of scope. If not, you may find yourself paying for custom development and enhancements down the road. One last thought. This isn’t an ATS vendor-bashing article ó quite the opposite. Most ATS vendors provide solid solutions with high ROI, not to mention many of the intangible cost savings that are difficult to measure. No, the purpose of this article to help better inform buyers on some of the more common pitfalls that we can all land in when searching for that perfect ATS and vendor. The ATS will be your partner in the war for talent ó make sure your vendor is as well!