Vendor management systems are quickly becoming a mainstay in the corporate world because of the many benefits that they provide. Let’s look at the vendor management process and the benefits it provides for management and the organization.
What is Vendor Management?
Vendor management is a systematic approach towards managing the many vendors that an organization deals with. It includes tracking performance, monitoring service delivery, and generating data which helps the organization make the right decisions about vendor relationships. Vendors are a necessity in the business world, but the problem is that they have many risks associated with them. If vendors fail to deliver the required services, it can cause a degradation in your organization’s performance or can even bring it to a standstill. That is why the vendor management process is given so much importance, and here are three benefits you can expect to receive when you implement an effective vendor management system for your business.
Better analytics based on historical data
The vendor management process delivers superior results because it is backed by data. Taking an approach based on data allows organizations to monitor and track vendor operations better than ever before. Management can see the historical data for each vendor with just a few clicks. With IT vendor management there is no need to determine whether a vendor is good or not – it can be seen in their performance which has been tracked by the system. If a vendor keeps causing issues it will easily show up in the system and the organization can eliminate the relationship.
Getting better services from vendors
Eliminating a relationship with a bad vendor is not the only approach that can be taken – the vendor management process also allows your organization to receive better services from your existing vendors. Any issues that are faced are logged into the system and this feedback can be given to the vendors. Management will be able to pinpoint the issues and why these issues are created, and then work with the vendor to eliminate the root cause of the problems being faced. This will improve your vendor relationships while at the same time resulting in your organization getting consistently high quality service delivery from vendors.
Integration with compliance and risk
IT vendor management also allows organizations to integrate their vendor management system with a compliance management system and a risk management system. Using an integrated solution for all such GRC (Governance, Risk & Compliance) concerns results not just in better synergy but also opens exciting new possibilities. The data generated by the vendor management system can be reflected in the compliance status as well as the risk status of the organization. A high risk vendor will influence the organization’s risk level, and a compliance issue caused by a vendor will be reflected in the compliance system.
This helps management quickly identify and manage problems. A risk manager may see that risk is going up, upon investigation they will find that the risks have increased due to a vendor, and action can be taken immediately. Similarly, a compliance manager will see a new compliance issue pop up and will be able to track it to the vendor causing it. These new chains of information that are created through the vendor management systems decrease the information gap between upper management and the ground realities of the business. Vendor auditing also improves vastly. Since all the information is already in the system there is no need for a separate investigation just for an audit. Management can see each and every vendor they interact with, across the country, and compare their information all in one place.
Vendor management systems also improve the customer experience. Vendors provide your organization with the tools and supplies it needs to deliver services to customers. Cultivating better relationships with vendors results in your organization’s efficiency increasing, which in turn leads to your organization delivering better services to its clients. It also helps reduce costs; vendors that often create problems are very costly to the business, but these costs are often hidden. The vendor management system allows organizations to quickly trace all such costs associated with vendors.
Learn what Predict 360’s Vendor Management Software can do for your organization. Send us a Demo request and our solutions team will work with you to establish what you are looking for and educate you on the solutions available.
About the company
360factors, Inc. (Austin, TX) helps companies improve business performance by reducing risk and ensuring compliance. Predict360, its flagship software product, vertically integrates regulations and requirements, policies and procedures management, risks and controls, audit management and inspections, and on-line training and qualifications, in a single cloud-based platform based on artificial intelligence.