Vendor Management

A: Vendor Management is the practice by which businesses set the criteria for choosing entities that will provide products and/or services to the company. It includes sourcing and researching vendors, assessing capabilities, quality of work and pricing, as well as how that vendor will intersect or even interact with the company’s other vendors if need be, as well as with departments within the organization. Vendors encompass every possible product or service that is paid for on a continuing basis by the company – from IT support and peripheral IT services, such as computer hardware and software licensing, to coffee deliveries for the break room.

After the relationship is cemented, this process shifts focus to ensuring that all aspects of the vendor’s performance remain consistent, that target goals are met, that quality is maintained, and that costs remain within a reasonable range. The company’s Vendor Manager will monitor these areas of concern, ensuring that promises and guarantees are kept and the contract terms are honored.

On a continuing basis, suppliers must be managed as much as services vendors so that no weak or inconsistent link in the chain of vendors can impact the company reaching its core goals. Constant monitoring and oversight is a must.

A: The practice of vendor management makes for better organizational processes overall:
1) Better Vendor Selection: It allows a company to choose between a broader selection of vendors, and by leveraging one against another, it creates the opportunity for better pricing options.
2) Improved Contract Management: With fast and easy access to, and comparison of, vendor contracts, it allows for vastly improved analysis and decision making.
3) Higher Quality Vendor Relationships: Once you can compare the pros and cons of all vendors at a glance, you cab deal with each based on thorough, current knowledge of the actual benefits they are bringing to your company.
4) Improved Performance Management: By centralizing all vendor information in one area, there is no guesswork or suspicion as to who is performing well or underperforming.
5) Increased Value: If you are well-informed about each vendor’s quality and performance, you ensure that you are getting the absolute most for your money.

A:  Naturally, any Managed IT Services provider uses vendors of its own for the benefit of their service to their end-client. These sub-vendors are typically subject to more stringent oversight by a Managed Services Provider (MSP) than by a run-of the mill independent IT support ‘Guy’, as the Managed Services Provider is kept on a monthly subscription or retainer, with a lot more to lose if a client is dissatisfied. The hourly-rate IT services ‘Guy’ is a hired gun who shows up when there is a problem and has less invested in the ongoing success of the client.

There is a category of Managed IT Services world, as there is among much of the IT Support Los Angeles Community, to act as the client’s Communications Vendor Manager, wherein the Managed Services Provider takes every vendor that can effect the clients business communications and flow of data under its overall umbrella to ensure quick resolution to any issue from any vendor whose failure can inhibit the client’s smooth operations.

For example, the MSP may not directly provide the VoIP internet phone system or the internet service itself, but when those go down, it severely inhibits operations. Normally, the clients’ main Vendor Manager would juggle those calls, which can be frustrating – caught between the provider claiming it’s the VoIP or IT services provider, while the others claim that it’s not them, but the internet service. A top-notch MSP cuts through the smoke screen, speaks the lingo of each vendor, knows the ins and outs of their industries, and will accept no lame excuses to get fully operational communications back in line as quickly as possible.

If the company’s main Vendor Manager is the Ringmaster of a three ring circus, the MSP takes control of the Communications Ring - makes the calls, stands over each vendor in the ring, sorts the issues and keeps the flow of every type of data going.

A: This is an area of vendor management which involves closer scrutiny over those vendors whose failure could have catastrophic results for the client. Fortunately, they are a small percentage of overall vendors. For a manufacturer, if a steel vendor fails, operations grind to a halt, but if their coffee vendor goes bankrupt, employees can make Starbucks runs until a new vendor is selected.

A: The steps involved consist of: Interviewing/selecting vendors, negotiating the contract, onboarding the new vendor, performance monitoring, risk monitoring and management, and payment scheduling. Software company Taulia lays out the specific steps in detail HERE.

Each step requires its own care and due diligence. The relationship between client and vendor can vary, depending on the strategic importance of the vendor, but any missed steps in the process can and usually will evoke Murphy’s Law: ‘Anything that can go wrong will go wrong.’

A: Ultimately, it keeps costs as low as possible and in line with a company’s budgetary concerns by consistently getting ‘the most bang for its buck’ as well as managing any risk associated with the performance of the vendors. On a continuing basis it oversees issues of quality and promptness of
service or delivery. And it makes sure the company holds up its end of the contractual bargain. From the viewpoint of a Managed Services Provider, it is important that we consistently analyze the ancillary services we use on behalf of our clients as it is crucial in maintaining and improving on the quality and speed of our services.

A: A Vendor Management Software (VMS) system is highly recommended – just as a company can streamline their own client communications with a good Customer Relationship Management (CRM), and enable the highest quality interactions with their customer base, a good VMS does the same thing for vendor relationships.