"If you people know the staffing industry so well, why on earth do you think we would be interested in your products." That's a quote from an angry staffing madonna at an ASA conference a year or so ago. She was addressing a panel of VMS (Vendor Management System) vendors who I imagine thought they were there to extol the virtues of their VMS products.

The lady had a good point. What value does a VMS bring to the staffing company? Who wants to be disintermediated from one's client? Who wants their bill rates reduced by three percent? Isn't it bad enough that worker comp has already chiseled away what margin there was? How can I make a quality hire for my client if I can't talk to the hiring manager?

Who are these VMS vendors anyway? By one count, more than 237 different staffing VMS companies compete in the US market alone. Wipe the lip stick off of most of them, and you get to the dull, washed-out lips of a bored staffing company that decided to get in on the supposed easy money of VMS. Instead of investing in a sound enterprise system, these befuddled companies dump the few remaining buckets full of cash they have into VMS software development.

The failure of most of these ventures does not lie with the inability to create a working software system, although a lot them fail at that as well. It's more of an 'oops, I forgot the sales and marketing costs' kind of a problem. Complications increase after the initial product gets launched.

The patience of the beta client wears thin. Every prospect wants contradictory customizations. The time entry screen that worked fine for the client's engineering department is unusable by the call center. No one agrees on how authorization should work for requisitions. Version control issues resemble the Tower of Babel. The sales staff you poached from your most profitable staffing division to sell VMS is suddenly looking at a paycheck without commissions, and the grass is looking a lot greener elsewhere.

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