What is Vendor Management? (and how Vendor Management software helps businesses.)
Vendor Management (when done right) provides organizations with the ability to standardize measures for control costs and mitigate risk without compromising outstanding service deliverability. The responsibilities and processes include: researching the ideal vendor(s), obtaining and sourcing pricing information, assessing work quality, managing relationships – where multiple vendors are involved – and payment processing.
Industry analyst group Aberdeen reports that 72% of companies in the United States currently use technology programs to manage contract labor and professional services. Read on to find out more about the benefits of vendor management software for companies.
Advantages of Vendor Management Software for Companies
As far as the vendor management software is concerned, it serves as an online web tool that functions as the single point for managing all vendor-based activities in an organization. Which, in turn, helps improve operational performance and efficiency in a highly cost-efficient manner.
This means businesses that utilize vendor management software tend to be able to handle more information while they end up saving additional funds and time through streamlining their business processes. Under some conditions, it’s not unusual to find that the right software can help organizations save around 20-30% in regards to operation and labor costs.
The following are some of the benefits of using the vendor management software:
- Automate and streamline continuous tracking of vendor compliance and warranties
- Standardize multichannel sales and order fulfillment
- Improve document storage and security with the off site, cloud-based solutions
- Mitigate risk and liability, allowing you to ensure all the work performed complies with City, County, State, and National regulations.
- Increase efficiency dramatically
- Reduce overhead and managerial bandwidth
- Create a centralized repository for storing digital paperwork
- Develop a workflow for support ticket escalations
- Automate notification, scheduling, and customer follow-up decrease the likelihood of important information being overlooked
- Control costs with standardized pricing
- Minimize the odds of potential damage, as well as product returns.
- Rely on industry-specific expertise to analyze documents for you
There are a few ways organizations can take advantage of vendor management software/systems:
- In-house, where the portal is managed utilized daily and oversight responsibilities rely on assigned organization personnel,
- SMS (shared management services), wherein a business works alongside the vendor management software provider to sharing the administritive responsibilities and,
- with a MSP (managed service provider) model where management of the solution is completely outsourced.
As you might have been able to gather, there are (literally) a dozen ways vendor management software and services can help improve business operations. There may even be more that we just haven’t confirmed yet as of the time of this post.
Leveraging these solutions can help your organization integrate a near flawless direct install option for your program. Allowing businesses to work with either a small group or many vendors simultaneously, each with a different contract, pay rate, and points of contact.
Effective vendor management tools equip teams with the tools needed to be efficient and effective.
In essence, vendor management is all about streamlining processes for improved efficiencies as well as management of vendor relationships. With an efficient vendor management process in place, businesses can ensure better quality, service, and cost as well as achieve their overall objectives. It also helps to contribute to the selection of 3rd party vendors who will be helping achieve those goals.
Now that you’ve obtained more information on the subject, what do you plan to do with this newfound knowledge? If you were hoping to learn whether or not outsourcing is right for your company, check out our post on the subject here.