Big Picture Planning: The Pivotal Role of Vendor Management

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The services provided by partner companies can make or break an enterprise in the long haul. Vendor management plays a crucial role in maximizing company efficiency while reducing long-term costs through fair agreements with companies to keep.

Vendor management plays a critical role in ensuring both quality and value from suppliers and service providers. The vendor manager is especially prominent in most businesses and organizations today, assisting the enterprise in acquiring and vetting software solutions that offer the best quality for the best price. The job of those in vendor management is that of continuous negotiation for the best offers from both the enterprise and its supplies.

Contrary to what such a role would imply, however, proper vendor management is not about penny-pinching bargain hunting and haggling. Rather, vendor management aims to look for supplies and services that provide the business with the best amount of value, which in many cases would neither always be the cheapest option or the flashiest. Reliable companies to keep such as ServiceNow can provide businesses with plenty of value throughout their partnership.

The Bigger Picture

Effective vendor management examines the big picture costs of each vendor to determine whether the services offered by the vendors are appropriate for both the enterprise’s needs and budget. The up-front fees of the service are just part of the equation. Although essential, price is not sufficient to seal the deal, and the cheapest solutions are hardly the best ones. Other factors include how versatile the services offered are and how intuitively could the new software be used by the employees at large.

The vendor management team plays a careful balancing act with the vendors the company keeps. Although it is costly to change vendors constantly, it is also a poor choice to be bootstrapped to a specific provider and their services even when their services prove to no longer be adequate for the company’s needs.

Navigating Negotiations

An effective vendor management team steers a company toward a good deal with a vendor. The deals struck with vendors should be in good faith with respect to what the company stands to gain and the price that the vendor deems fair.

To make this decision, the company’s bottom line over a longer time horizon should always be considered; a trustworthy and reliable merchant partner would deliver more value to the enterprise that far outweighs any short-term savings. Vendor managers and the companies they represent should be prepared to take a vendor partner’s offer of a reasonable rate hike if it guarantees reliable or superlative services.

Vendor managers should also realize the important role played by vendors in the company strategy and, whenever possible, invite them to strategic meetings to share insight or advice.  As a trusted expert in their respective field, a vendor’s insights and proficiency could provide companies with a much-needed competitive edge to bolster their strategies.

The Long Haul

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Vendor management’s ultimate aim to cultivate a long-term partnership with a vendor. A right vendor is hard to find; one that provides a satisfactory and innovative product that delivers excellent services for a fair price is a company to keep.

Switching vendors based solely on the prices they offer is not going bode the company well in the long run as employees lose productivity in trying to adapt to a new system that may not be the best fit for the company’s needs. A good partner company, no matter what the initial costs, can and will save an enterprise money in the long run.

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