Vendor management is the process of initiating and developing relationships with suppliers whose good or services you’d need for operations.
It involves everything from sourcing new vendors to controlling costs, and even driving service excellence.
An organization rely on third-party vendors for various products and services. A vendor could be:
And vendor managers perform these tasks so their organization can extract the greatest value across the deal lifecycle.
Vendor management has the following roles:
You'll receive requests or requirements from across your organization like IT might want some new computers. And HR might want a new service provider to run background checks in Singapore.
It's your job to find the company reliable vendors who are offering the latest and greatest services and products.
Once your company has agreed to go with a specific vendor, it's your job to onboard them formally and ensure that they are registered on your system with all the right documents in place.
After understanding each requirement, you'll be in charge of bargaining for the best price. You'll also have to also set up business goals and ensure that your vendor aligns with them.
Once the deal has been inked, it's up to you to ensure that the vendor is doing a good job.
You'll need to set the Key Performance Indicators (KPIs) with your vendor and make sure that he's honoring his promises of quality and performance.
Is something going wrong? If yes, it's your job to ensure that the vendor fixes things and brings everything back on track. And you'll have to ensure the best outcome for your organization.
Does that sound easy? Unfortunately, there's more to it. And it is incredibly scary.
Here are 3 main challenges in the vendor management ecosystem:
Companies that work with hundreds of vendors face a variety of compliance and security issues. To manage vendor risks, they must categorize vendors based on their strategic value and risk, and convey expectations.
Companies are always looking for ways to cut costs. This, however, necessitates identifying sourcing options that will streamline and standardize corporate operations.
They require cash to help them achieve organizational goals while driving company value in areas such as business innovation and competitive differentiation.
Vendors are critical partners in any successful business, and you must tackle vendor management difficulties strategically.
You could be working with dozens of different vendors, each with its own set of contract terms and fees. Effective management is essential for the company's financial health as well as its overall strategic success.
Managing contracts is a big struggle for businesses because contracts are frequently assigned to teams working with vendors, leaving the rest of the departments in the dark.
Vendor Management is an art form. And a great vendor management professional is one who can become a rainmaker for their organization during a critical situation.
She can harness the power of her connections, management abilities, and people skills to do great things during difficult times.
Like being able to quickly supply ten thousand employees with the right equipment so that they can work smoothly from home during a pandemic.
Your focus as a Vendor manager is to really get better at
These skills are hard, but not impossible, to pick up. You’d need plenty of practice and experience to get good at them. But you will never get good at those things if you spend your time on manual, repetitive tasks all day long.
Unfortunately, many Vendor Managers spend their time doing manual, repetitive work that can hurt their careers in the long run. If you spend the bulk of your time on two of the below mentioned five tasks, you need to be careful
If your answer is "Yes" to even one of these situations, you are spending all your time on manual tasks, which limits your growth.
Vendor management automation is the answer to these problems. By automating the vast majority of their repetitive tasks, Vendor Managers can start focusing on the work that matters and acquiring those particular skills.
Automation will also help them -
Related read: 6 Tips For Choosing the Best Vendor Management Software