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Vendor Management: Tips For Success

It is just as important to communicate with your vendors as it is to communicate with your customers. Establishing a productive relationship between you and your suppliers can lead to increased efficiencies, reduced costs and better customer service. This article will address some tips for how to get the best out of your vendors.

Create A Competitive Environment
Vendors that know they have secured your business are better able to seize control of the negotiations. In this market don't be afraid to open up bids to tender; the competition will help you reduce costs. We often see vendor pricing become uncompetitive after a few years on the same gig, and they will often re-allocate top talent to new client engagements. A consistently competitive environment will help mitigate these risks.

Build A Relationship
There are more to projects than timelines, costs and benefits. It is about building a personal connection with your primary contacts within the vendor, to create a strong sense of loyalty and commitment. Its easy to find creative ways that go beyond the negotiation process. Break down barriers and inject some fun with a quiz, learn about their culture, and take an interest in the things that matter to them.

Partnership
Most vendors can do an OK job at delivering a service, but you want to work with a partner who will go the extra mile, not just think about the individual project tasks. Ideally, you want to develop a partner who is willing & able to take on additional responsibilities without always referring back to the contract. During the sourcing process, call some of their clients to find out more about their culture and if they act more as partners or vendors. "There is a real need to drive contract terms and legal conditions, but in the end, no contract in the world will adequately cover your long-term goals and expectations. Build a solid, true collaborative partnership with your vendors. It will pay off in the long run. When things go bad, and they most certainly will, who would you rather have at the table? A vendor or a partner?" -- Rick Hamilton, director, service delivery, Cisco Systems Inc.

Understand Vendor Priorities
Make sure you understand the value on the other side of the table. Sometimes points which are irrelevant to your organisation can play a significant role for the vendors, and vice versa. Prepare "easy" concessions to broker a win-win contract. If both partners cannot get value from the investment stay clear of it.

Share Your Priorities With A Vendor
If you currently have an issue with a technology or process, there is a high chance the vendor can help. They will find a way to provide the best solution and might already have solved this elsewhere. On operation Tech they state, "Appropriate vendor management practices provide only the necessary information at the right time that will allow a vendor to better service your needs. This may include limited forecast information, new product launches, changes in design and expansion or relocation changes"

Demand A Proof Of Concept
As rightly commented by I.H Tyler on Operations Tech.com, "If you are seeking value, then you need to see it firsthand. So make the vendor prove it can be done, hopefully by implementing something at your location with your people and data. Often this works with appliance-type systems or infrastructure. If the situation is for something more complex, then you must meet with users of the firm's products and really do due diligence to see if they are getting the values you seek". If a picture is worth a thousand words, a tangible result is worth a million.

The ultimate goal of vendor management is to meet your pricing, service and quality goals with as little risk and overhead as possible. The mere presence of a competitive threat is good - but the ability to build strong relationships with suppliers puts a buyer of services in a much stronger position. A thorough understanding of the supplier priorities combined with a relationship founded on a partnership are vital - particularly in complex engagements. Therefore, a competitive environment should be a foundation to your approach - followed through with fearlessly executed vendor management principles. And remember that in days like these, few suppliers will shy away from doing a little extra to acquire or retain a client. 

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