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It can be on-promise or cloud based software. However the trend is toward web based solutions. A vendor management solution allows you to manage vendor related activities, documents, communications, processes, etc. in an organized and centralized way. It gives you the tools to automate any business process and tasks around vendor management. You can find these workflow automation tools specifically and solely for vendor management processes or as workflow engines that allow you to automate also vendor management related processes. Ex. Vendor Management System of a Healthcare Service Provider that manages transportation providers, drivers and vehicles Elements Of A Functional Vendor Management System Finding the right VMS platform for your business is a journey that takes time. It is not only a matter of the software that you choose. The technology and the organization need to be perfectly aligned. You also want to be sure that both parties can work together seamlessly avoiding manual processes.