Best Practice #1: Take a Lifecycle Approach to Managing Vendor
In order to build or advance a VMP effectively, a crucial first step is to take a step back and look at your relationships with vendors from a new perspective. Too many organizations make the costly mistake of viewing these relationships as compartmentalized and unintensive – find a vendor, sign a contract, and leave it alone until something goes wrong or it’s time to cut a check. Managing vendors in this way is reckless and leaves entities exposed to financial, operational, cybersecurity, and reputational risk.
The core component: includes the 6 main stages of a vendor relationship:
- Oversight and optimization
The secondary component: includes the foundational pieces – the people, processes, and systems – in a vendor relationship that really make it run:
- Policies and Procedures
Once this framework is adopted and the lifecycle approach is standardized, organizations can finally extract the value they deserve from vendor relationships. The framework will provide clarity to the department or team tasked with overseeing vendor management, and policies and procedures can be put in place to standardize the processes and delegate responsibilities. For organizations that previously hadn’t quite been able to visualize what a VMP should look like, this level of structure offers something unique: unprecedented transparency into vendor relationships. With this transparency, organizations will understand what level of standards should be set for their vendors, and thus can finally begin to drive real value out of them.
To learn more about the vendor management framework and how you can adopt it, check out our website page dedicated to it here. To listen to Tom Rogers and Gavin Mac Carthy discuss this best practice and more, be sure to watch the free webinar here.
Author: Tom Rogers
Job Title: CEO
Organization: Vendor Centric