“When managed badly, large strategic vendors can become complacent, slow-moving and intractable.”
Says Gartner Senior Director Analyst. Vendor Management solely depends on the communication and relationship maintained with the Vendor.
Vendor Management plays an important role in the company’s internal structure and is also a form of risk management that helps in the growth of the company. For one to be successful, it’s important to understand the requirement and its buyers. Here are the 5 best practices making Vendor Management effective:
Communication and Build Partnership:
Communication is the key factor for any business dealings. Behind every successful business stays a strong Communication and understanding between the Company and the Vendor. And Understanding each other’s goals that could be achieved together will help in molding a strong base between both the parties and builds trust with being consistent over time.
Often as we hear success is defined based on with whom you work. Similarly getting the best price from a vendor may sound like a very good business but in the long run, it’s Catastrophic. It is significant to work with vendors that give your company the highest value of an investment which helps in the growth as well as holds onto a strong alliance. Establishing a lasting vendor relationship should be the goal, that helps in providing an effective Vendor Management system.
Work on Benefits and Pilots:
Both the Vendor and the Company look for a mutually strong business relationship. To operate with good faith and getting a competitive bid alongside builds trust and creates a win-win situation. And endeavoring new ideas and methods will build a strong foundation as a business works on the Trial & Error process. And finding the best way to make vendor management more successful and easier is the goal.
Focusing more on Collaboration:
The start and end of the Vendor Management is ‘’Collaborations’’. There is always a need for checking up with the new vendors to collaborate, develop and to grow as a company. The requirement and quality of deliverables can be significantly increased with Vendor Collaborations based on requirements and the demand in the market.
Regular Check-Ins and Risk Management:
It is very important to keep your vendors updated regarding the status of an order and providing relevant information from time to time. This also helps in building trust and assures the vendor on your company’s consistency and the delivered work. The key point to deliver an effective system shows how well you’re dealing with vendors, but at the same time, it’s pivotal to know if the vendor can boost your profit or can be a downturn. So, it is very important to practice risk management by auditing and check-in on Vendors right along the time.
The motto between both the company and vendor is mutual benefit, as the company gets its value and the vendor gets compensation for their services.