Vendor management software is a critical part of your vendor management infrastructure.
Good vendor management software automates tasks, streamlines workflow, enforces controls and provides a central ‘source of truth’ for information about your vendors. It also supports your ability to comply with laws and regulations, manage contracts, track vendor performance, and much more.
But simply purchasing vendor management software doesn’t guarantee success. Your organization has to be ready for the change to get the results you’re hoping for.
Here are five questions to help you determine if your organization is truly ready to purchase and implement vendor management software.
1. Have you defined and documented your vendor management policies?
Defining your vendor management policies is crucial to ensuring that the software aligns with your organization’s governance, risk, compliance, and security standards. Policies set the standard for vendor management compliance. You need to be clear on what they are so you can ensure your selected software can support them.
2. Have you documented your desired vendor management procedures?
Having defined procedures is necessary to identify the specific controls and workflow requirements for the software, and to evaluate potential software options based on how well they support your procedures.
The vendor management software marketplace is large – and growing. There are operational solutions for procurement, contract management and third-party risk, along with niche solutions for compliance, risk management and policy management. You need to be clear on what specific procedures the software will support to narrow down a large and crowded marketplace of software vendors.
3. Have you identified your users?
When purchasing software, it is important to take the time to define the users and roles that will be utilizing the system. Doing so allows you to engage them as part of your functional requirements gathering process and, in doing so, begin getting their buy-in for software selection and adoption.
4. Have you documented your functional requirements?
Defining functional requirements before selecting software is also essential for ensuring that the software meets the specific needs of your organization. It provides clarity about your needs to prospective vendors, allowing them to evaluate whether their solution may or may not be a good fit for your organization.
It also gives you a data-driven tool you can use to evaluate software workflow, security, scalability, and compliance, and mitigate your risk of overspending or investing in a software that doesn’t meet your organization’s needs.
5. Do you have the necessary resources to maintain your vendor management system?
Lastly, to drive value from your investment in vendor management software, you need the right resources in place to manage the project, steer the software configuration, create reports, train users and, ultimately, drive adoption.
Before purchasing software, make sure you establish your project manager and your project team, and define exactly who is going to ‘own’ the ongoing management of the software to resolve issues as they arise, and ultimately drive software adoption and continuous improvement.
If you’re thinking about implementing vendor management software, it’s important you’re able to answer ‘yes’ to these five questions to ensure your organization is truly ready for the change. Take time to plan and align so that you not only select a system that is best-suited to your needs, but that you can successfully implement and adopt it to maximize the value of your technology investment.