Many organizations wonder why they should consider a Vendor Management that helps and enhances the interaction between the company and its suppliers. Usually, this question arises in contexts of stable economies, although it is even more potent in scenarios of economic crisis and uncertainty.

The Systems (IT) areas are a key link in the transformation process of companies since they begin the changes that companies need to implement at the speed that the market demands. For this reason, IT expenses (whether under the name OPEX or CAPEX) are seen by management as an aspect that must be focused on to optimize them and thus generate the greatest benefit from the investment at the best possible cost.

According to Gartner, Vendor Management helps organizations “control costs, drive service excellence and mitigate risks”, all this in search of increasing the value and return on investment. So, For any IT area that is a key part of the organization's transformation, the Vendor Management function becomes absolutely key.

What is the value of having the Vendor Management service?

Helps the organization optimize its relationship with suppliers, who should be seen as partners to achieve the set objectives. It is a common mistake to think that the function It only seeks to reduce prices. While it is true that this is part of its objective, it is not the only one and many times it is not the primary objective.

“The Vendor Management process should help companies to ooptimize your costs and generate proposals for mejora continues on the contracts in force in the company, in order to achieve better results and greater added value for the end user.

Among other benefits, we can mention:

What are the main benefits of Vendor Management?

And in general business terms, the inclusion of Vendor Management implies:

• Understand the solution offering market and its capabilities.
• Understand that negotiation is not a conflict but an agreement that helps both parties.
• Establish clear rules of the game that allow optimizing the results of both parties, without anyone losing.
• Improve services received from providers and gain flexibility for change when necessary.
• Measure the expected results and verify that both parties comply.
• Review performance periodically to adjust deviations.
• Provide support to the entire process from an RFI (Request for Information) and RFP (Request for Proppossal), to the evaluation and selection of the most suitable supplier.
• Monitor compliance with the contract established with the third party, both at the SLA level and the expected penalties and benefits.

In this way, the Vendor Management function has to help the company and suppliers work better together for the benefit of both.

And to do so, certain key aspects must be considered to carry out the process:

In summary, the management of Vendor Management is an essential process to ensure effective supplier management. Their function goes beyond simple hiring and supervision since Its strategic and systematic approach allows organizations to manage risks, maximize the value of supplier relationships and improve operational efficiency. Thus, an optimally implemented Vendor Management becomes a key ally for business success in a globalized and highly competitive environment, even more so in times of crisis and economic instability.

If you contact us today, tomorrow you will have already started the path to obtain the results you are looking for: daniel.dapuza@togetherbc.com