Many organizations don鈥檛 have the staff, resources, or time for vendor management. Don't panic 鈥� this brief guide to the vendor management universe provides easy-to-follow tips and tools that can be incorporated into your process and bring you the maximum results for minimum effort.
Do any of these sound familiar? 鈥淰endor Management?! I don鈥檛 have the time or staff for that!鈥� 鈥淲e don鈥檛 have the budget for it.鈥� 鈥淪omeone else takes care of that鈥︹�� Or 鈥淚鈥檓 spread too thin already鈥 don鈥檛 need another project, and I have too much to do.鈥�
Or how about this? 鈥淚 don鈥檛 know where all my IT spend is going, who鈥檚 buying what, and our vendors are running the place; I鈥檓 over budget and behind on multiple IT projects, and I have contract renewals due.鈥�
You feel like you're rocketing through space, trying to grab all the shiny objects you can, and struggling to complete your mission鈥nd you don鈥檛 even have a towel! OK, what鈥檚 with the towel, you ask? Catch up on your reading of The Hitchhiker鈥檚 Guide to the Galaxy by Douglas Adams, where he explains:
鈥淎 towel [鈥 is about the most massively useful thing an interstellar hitchhiker can have. Partly it has great practical value. You can wrap it around you for warmth as you bound across the cold moons of Jaglan Beta; you can lie on it on the brilliant marble-sanded beaches of Santraginus V, inhaling the heady sea vapors; you can sleep under it beneath the stars which shine so redly on the desert world of Kakrafoon; use it to sail a mini raft down the slow heavy River Moth; wet it for use in hand-to-hand-combat; wrap it round your head to ward off noxious fumes or avoid the gaze of the Ravenous Bugblatter Beast of Traal (such a mind-bogglingly stupid animal, it assumes that if you can't see it, it can't see you); you can wave your towel in emergencies as a distress signal, and of course dry yourself off with it if it still seems to be clean enough.鈥�
鈥淐ut it out,鈥� you say. 鈥淲hat does this have to do with vendor management?鈥� Consider this note as your towel to protect you, support you, provide cover when you need it, and act as a hand-to-hand combat tool as you make your way through the vendor management galaxy. But not only do we have towels鈥e also have a map!
Smaller organizations with limited procurement resources and zero vendor governance spend their time dealing with the next 鈥渆mergency,鈥� chasing requisitions, purchase orders, contracts, renewals, and putting out fires. They generally do not have time to assemble a vendor management plan, let alone to create a good overview of their most critical vendors. Vendor management is great if you have the staff, reporting tools, and processes to manage it, right? But most IT and procurement organizations do not have that luxury and are left to do their best under the circumstances.
Oh well, I guess we鈥檒l just have to deal with the vendors going around everyone鈥檚 back, buying the same products from multiple vendors, working off vendor paper, and paying more, right?
Wait a minute 鈥� really? Your internal systems may be a challenging, disparate, disconnected mess and not built for managing vendors, but not having adequate (or any) vendor management built into your IT strategy and procurement operations can have lasting, negative impacts on your business and technology infrastructure, while increasing your costs and risks.
Having different processes for tracking vendor contracts, spending, sourcing, category and project information, and security and risk profiles does you no favors. That said, implement these tools (your 鈥渢owels鈥�) to get started. Then, you can turn your limited attention to your most critical vendors (or the ones that are most troublesome) and get your organization on a less stressful flight path to a small vendor governance program and work your way to a more formal vendor management initiative.
鈥淪tart small, think big, and grow fast.鈥�
You鈥檙e busy 鈥� we get it and appreciate that you鈥檝e read this far. In this note, we鈥檒l discuss the basics for building a scalable foundation for vendor management and provide the tools to get you started on your vendor management journey鈥o matter how big or small your organization/department is or how disparate your organization鈥檚 systems are.
First, let鈥檚 look at how we describe 鈥渧endor management.鈥� While it is a broader system of 鈥済overnance,鈥� as described in 91制片厂鈥檚 鈥�What Is Vendor Management?鈥� note, and specific to each organization鈥檚 size and needs, vendor management is a 鈥渉ighly customizable and configurable鈥� unifying foundation for the main 鈥渢owers of excellence鈥� comprised of the five areas below. These towers represent the foundation for management and will help you get to your destination in one piece with reportable value to show for it.
You are already dealing with the five towers daily, even if you don鈥檛 have a vendor management initiative. So, for now, it鈥檚 a matter of process and scale to get 鈥渧endor management鈥� defined for your organization at lightning speed with minimum effort鈥nd the right tools.
So, let鈥檚 take a hypersonic journey through each of the five towers of excellence and see what the 鈥渕inimum effort for maximum gain鈥� for your organization can be by building a foundation for vendor management, even in a resource-constrained environment. No need to be lost in space when dealing with vendor management鈥�Download the full PDF for your pre-flight checklist.