Vendor management allows organisations to build relationships with service providers and suppliers while controlling costs, driving excellence and mitigating risks. The aim is not only to gain increased value from vendors throughout the lifecycle of the partnership but to strengthen both businesses at the same time.
To effectively manage vendors, it’s not about negotiating the lowest possible price but constantly working with them to come to agreements that will benefit both parties along the way.
Let’s take a closer look at the best ways to manage vendors more efficiently.
Vendor Management Best Practices
Collaboration is the key to success in vendor management. By sharing information and priorities with your vendors, it not only ensures your own business stays on top, but the vendors will be in a good position too. To successfully manage vendors, provide only necessary information to allow a vendor to serve your business needs better. It doesn’t mean handing over logins and passwords, but it does mean providing them with the information they need to perform at their best – launch dates, design changes or any other information they require.
All about balance
To manage vendors effectively, it’s all about balance, commitment and competition. One of the main aims of vendor management is to gain the commitment of your vendors to support the operations of your business. In return, the vendor expects a commitment from you. This doesn’t mean that you should go along blindly as they increase costs but work with them to find a compromise. It’s all about balance. Remember, competition is important, which can be used to leverage a good rate and to find something that works for both parties.
One of the best ways to manage vendors is to bring them more into the fold. If a vendor supplies your business with what it needs to function, bring them in for strategy and planning meetings. Work and strategise together to see if improvements can be made. Remember, they are the experts, and you brought them in for a reason, so tap into that to gain a competitive edge.
Build long-term partnerships
Vendor management helps businesses and organisations prioritise long-term relationships over short-term gains and minimal savings. Changing vendors every now and again just to save a few pennies doesn’t make good business sense. To manage vendors effectively, remember the benefits of a long-term partnership far outweigh anything else. Not only are you building trust, but you can also expect preferential treatment and access to insider knowledge.
Understanding the vendor
What must never be forgotten is that the vendor is also there to make money and develop their own business. If you lean on them to cut costs, not only will the quality suffer, but they may go out of business or decide to cut ties. To manage vendors successfully, respect them by contributing knowledge and resources that will best serve your business.
An important part of how to manage vendors fairly is through negotiation. Always ensure that negotiations are completed in good faith and are beneficial to both parties. Businesses should always be on the lookout for negotiation points that can help both sides accomplish their goals.
Quality for the best price
Vendor management is more than just about securing the lowest price. The lowest price often means the quality suffers, which, in turn, affects the reputation of the business and sales could plummet. To manage vendors successfully, secure the best possible price for the best quality. Get value for your money! Ensure there is an agreement, in writing, stipulated within the contract, that specifies the quality your business should receive for the price that’s being paid.
Vendor risk management
A single disruption or unmitigated cybersecurity vulnerability anywhere along the supplier network, (which includes digital supply chain) can quickly turn into a much larger issue, impacting share price, bottom-line profits and brand value. That’s why vendor risk management is key to business success in today’s digital age.
RiskXchange’s vendor risk management solution enables organisations to effectively manage, monitor performance and mitigate risk across their supplier networks. It also helps streamline the global supplier cyber risk and compliance management processes with actionable insights that enhance business value.
Here are the benefits to RiskXchange’s vendor risk management solution:
- Increases visibility into cybersecurity risks and business exposures from vendors, suppliers and other third parties.
- Streamlines vendor assessment, compliance, due diligence and remediation initiatives.
- Provides role-based reports for monitoring compliance and third-party risk mitigation.
- Strengthens vendor relationships by providing a collaborative platform for identifying and mitigating shared risks.
- Informs risk-based decisions to prioritise remediation and verify compliance.
- Unifies and centralises inside-out vendor risk assessment and outside-in vendor risk monitoring.
Get in touch with RiskXchange to find out more about how to manage vendors more efficiently.