Young man using his laptop to measure KPIs through his VMS.

8 Program KPIs Your VMS Should Be Able to Track

If you’re a decisionmaker in an organization that is using or plans on using a vendor management system (VMS) to effectively manage the extended workforce, you’ve most likely asked yourself this question before.  

Smart contingent workforce program leaders create a set of Key Performance Indicators (KPIs) to define and measure program outcomes. The choice of any particular KPI may differ based on organizational objectives, industry, or the nature of its supplier relationships. For effective workforce management using a VMS tool, it’s critical to understand commonly used KPIs as well as some new ones – and customize them further to meet your organization’s goals.

Establishing these objectives and measuring with the appropriate indicators can give you a good idea of how your program is performing. Your program and its KPI’s should not be constrained by limited reporting capabilities in your VMS. 

Here is a list of KPIs your VMS should track: 

1. Supplier Performance Metrics

These metrics assess supplier performance, contributing to cost savings through improved supplier relationships and efficiencies. Key metrics within this category include on-time delivery, quality metrics, and supplier scorecards. What really sets powerful VMS capabilities apart is being able to use built-in analytics not just to view performance in real-time, but have it alert you and set actionable tasks based on hit or missed targets, as well as predict supplier performance based on historical informationAdditionally, keep score of how suppliers compare to one another through metrics like response rate, negative attrition, or assignment survey, to name a few customizable options. 

2. Spend Analysis/ Cost Savings/ Cost Management

Several key metrics are commonly used to measure VMS performance. You should consider effectiveness by concentrating on spend that is actively managed by your VMS, total cost of ownership, measure cost reduction achieved by VMS-driven initiatives, and you should be able to easily calculate cost avoidance 

3. Supplier Diversity

Keeping a hand on the pulse of supplier diversity should be considered for meeting long-term organizational goals. Metrics should include the total procurement spend allocated to diverse suppliers, category breakdown, and the certification status of each supplier for regulatory purposes. 

4. Cycle Time

Evaluating how quickly different procurement processes are completed is another key KPI to consider, especially by noting that shorter cycle times can often indicate efficiency improvements. Specific metrics to consider in cycle times are candidate submission, requisition to contract, vendor onboarding, purchase orders, and invoice processing. 

5. Risk Management

To mitigate and avoid vendor-associated risks, look into tracking metrics such as supplier risk scores, measure the frequency of risk incidents caused by suppliers, and evaluate regulatory compliance and financial stability metrics. A well-designed dashboard can provide a detailed view into risks by flagging them ahead of time.

6. Customer/ User Satisfaction

One of the most effective ways of measuring VMS performance is listening to the people who use it. In addition, measuring VMS experience can often be the quickest way to identify areas in need of improvement. Beyond the obvious user/customer retention rates, consider utilizing employee Net Promoter Scores, or if unavailable, satisfaction surveys. Review system performance metrics like load or response times and engagement metrics.

7. Compliance

Measuring compliance is crucial to ensuring your organization and your vendors adhere to laws, regulations, industry standards, contractual agreements, and internal policies. Consider metrics like reporting accuracy, regulatory compliance, contractual compliance rates, and data security and privacy, to name a few.

8. Workforce Listening

Similarly to connecting with your customers and users, listening to the workforce being managed through the VMS can be a powerful indicator of success. Look into tracking worker satisfaction scores, turnover rates, performance metrics feedback trends, and DE&I metrics. This practice will need to fit within an organization’s specific compliance and risk profiles; however, some leading businesses make a practice of listening to their contingent workers. For a great bit of information, listen to Melissa Arronte from Medallia discuss the topic in a clip from our latest Extended Workforce Influencer Forum 

Don’t forget to factor in the power of AI and analytics  

As priorities shift, tracking KPIs and adapting them to the most current needs of the organization is vital. A VMS that can take your organization to the next level should be able to help you track, audit, organize, and even predict needs by offering the latest technology, like solid extended workforce analytics solutions 


By offering built-in AI-powered analytics, a VMS can significantly enhance the capabilities of organizations, learning and improving as it goes. Prized for their predictive and prescriptive elements, these analytics tools succeed at getting granular data to not just support existing KPIs measurements and actions, but to plan ahead. Using AI automation to combine rate card data and decision intelligence, for example, can ensure maximum spend controls while providing unfragmented access to top talent, as well as boosting time-to-productivity metrics. 


For organizations dealing with legacy VMS technology, tasks like organizing or tracking KPIs can become cumbersome or even impossible to measure without external analytics tools or manual workarounds. In contrast, Flextrack’s on-platform automation, visualization, and analytics tools offer access to unparalleled data visualization, granular control, and application-building capabilities on a level legacy vendor management systems and their standard dashboards just can’t reach.  

Want to know more about how extended workforce analytics can take your performance to the next level?  

Magdalena Wolak