In this competitive global business environment maintaining the company’s internal resources efficiently has become a major responsibility of the business owners. To accomplish this, business leaders have to streamline their vendors strategically and build strong vendor relationships with them to gain more value.
Building a strong relationship with strategic vendors is progressively key for your business performance. Vendor management leaders can improve the relationship by implementing three important approaches like focusing on complete vendor data analysis, reviewing the vendor performance management, and making action plans against the vendor data insights for continual improvement.
Vendor Management Data and Insights
Start building an aggregate picture of the vendor and their contribution to the organization. This improves the clear structured data of the vendor profile, their performance with the organization, and complete market data. Collection of vendor’s data and their performance insight report can be generated in four steps;
Vendor Profile Creation
Build strategic vendor profiles that provide information like vendor’s relevant market, their interaction, and performance with organizations. Need to update data monthly.
Create a dashboard that gives real-time updates about the strategic vendor’s performance. It gives strategical data relevant to a complete understanding of the vendor’s performance.
Generate Vendor’s Quarterly Scorecards
Based on the vendor performance create scorecards quarterly to strategically measure their relationship with the organization. It also gives information based on the customer assessments and recommended improvement actions.
Create Vendor Risk Plans
Need to prepare vendor risk plans annually. Those plans should provide a complete overview of vendor risks and suitable or necessary actions to control residual risks.
Vendor Performance Reviews
The next step in the strategic vendor management system is to create an administration framework for sharing collected data with vendors and the organization’s key stakeholders. It’s a kind of schedule review meeting conducted during the point of procurement or onboarding process. Typically, the schedule review meetings are as follows:
A monthly review meeting has to be performed in objective to collect reports on vendor performance against the service level agreement and metrics. It also supports checking vendor solutions against any past performance issues.
Quarterly review is performed to focus on measuring the vendor’s long-term strategic value relationship with the organization.
It’s a biannual review to check vendor risks and create mitigation plans to refine the business continuity with strategic vendors.
Finally, the annual executive review is performed to confirm the goals alignment between the vendor and client. It also helps to create trust and share ideas by the senior executives on both sides.
Vendor Management Action Plan
The last step in the strategic vendor management system is implementing the above process effectively and maintaining a broad engagement of the vendor within your organization. Performing the process with one or two strategic vendors helps to evaluate the best time, deliverables, and participants between the vendors and internal stakeholders. Refine this process and expand it to more strategic vendors.
Vendora is a reliable vendor management software that helps you to create a standard strategic vendor management system for your organization. Request a free demo and discover how.