According to Wikipedia, Vendor Management System (VMS) is an Internet–enabled, often Web-based application that acts as a mechanism for business to manage and procure staffing services – temporary, and, in some cases, permanent placement services – as well as outside contract or contingent labor. Typical features of a VMS application include order distribution, consolidated billing and significant enhancements in reporting capability that outperforms manual systems and processes.
A vendor is basically an individual or organization who offers temporary labor to organizations on a contractual basis. They also help in the hiring of employees on a permanent basis if the organization so desire.
VMS is ideal software which helps you to pass on job description to the staffing companies, consultancies, vendors and smoothly conduct the hiring process, labor time approval and payment of dues.
VMS helps you to keep track of all the procurements that are done through vendors, allows you to track and view invoices and payment statuses from a central repository thereby making the payment process very smooth, helps you track all vendor contracts and other regulatory documents as well as streamline the approval process for any payment, document, reports etc.