You are right, a separate +12V power supply is needed. You need also some resistors between the +12V and the digital outputs of the VM110.
Please see the following threads for more info:
You may use the search of this forum to find more hints how to connect and use the K8055/VM110.
You may type there e.g. words: K8055 open collector
Also the combination of following words may give good hints: K8055 pull up