3 Types of Vendor Management Solutions Your Organization Needs

Shivasankari Bhuvaneswaran

February 3rd, 2019 Procurement Process   Vendor Management  

Traditional “minding and monitoring” vendor management solutions are a huge waste of time and money. You can’t integrate siloed vendor management processes like onboarding, qualification, and segmentation with other procurement processes.

Also, the process of acquiring and managing vendor data from multiple sources only adds to the inherent complexity and delays analysis. Manual efforts tend to delay critical vendor management decisions. The need to scale compliance and drive spend to preferred vendors demands a seamless alignment of vendor management functions with procurement.

vendor management solutions

Evolving business needs are forcing procurement leaders to reinvent their traditional vendor management practices, to avoid leaking value and money. According to Gartner’s Vendor Management Vision for 2019, nearly 63% of organizations are likely to change their business model in the next three years to face the uphill battle of their vendor management teams.

Can these tech-powered vendor management solutions offer the power organizations need? Are modern vendor management solutions an essential asset, or a wasteful spend? Let’s take a closer look.

What Is a Vendor Management Solution?

Vendor management solutions are the comprehensive set of modules that automate the end-to-end vendor management process, from vendor qualification and onboarding to vendor rating and offboarding. These solutions integrate seamlessly with the existing procurement process to derive more value out of supplier relationships.

Benefits of Using a Vendor Management Solution

Vendor management software solutions allow organizations to collaborate effortlessly with their vendors, forge better relationships with them, and make insightful business decisions.

Automated vendor management solutions:

  • Segment suppliers based on the value they offer and the risk they pose
  • Make vendor collaboration effortless, and establish a good relationship
  • Monitor and manage vendor performance without any human effort
  • Accelerate vendor onboarding while enabling consistency
  • Offer actionable insights to speed up the decision-making process

Three Types of Vendor Management Solutions You Need

As vendor management solutions continue to raise the bar, the margin of error within the process grows thinner and thinner. These vendor management solutions may either cater to a specific niche, or come as an all-in-one package.

What complicates things is that each vendor management solution has its own set of attributes. Since there are a variety of stakeholders involved in this process, there are diverging opinions as to which attributes are must-haves, and which ones could be traded off.

While a wide range of methodologies and terminologies are used to classify and segment these procurement tools, here are three types of vendor management solutions every organization needs:

1. Vendor Engagement Tools

Vendor engagement tools are designed to manage vendor relationships throughout active procurement cycles from initial contact to final closure.

Efficient vendor relationship management tools proactively improve relationships by offering an array of key benefits from enhanced quality to improved total cost of ownership (TCO) and increased transparency.

Vendor engagement tools like SMART by GEP let organizations actively integrate and collaborate with their suppliers in a transparent and structured way. They let businesses define action plans, assign stakeholders, and establish effective vendor engagement models through a number of focused, joint activities.

2. Vendor Management Workflows

Vendor management workflows establish a comprehensive vendor management process to drive down costs and mitigate risks. Vendor workflow automation tools automate, monitor, and manage every step of the vendor management process from vendor onboarding and performance rating to vendor offboarding.

KiSSFLOW is a cloud-based vendor management software solution that comes with an intuitive dashboard, pre-made workflow templates, online forms, and insightful reports.

With KiSSFLOW, business users can create rule-based workflows that enforce policies, ensure compliance, and enhance the consistency of their vendor management processes without any coding.

Automate Your Vendor Management Process in 15 Minutes

Used by Pepsi, Motorola, Domino's and 10,000+ Businesses. No coding required.

3. Vendor Performance Management

Maintaining updated information of a vendor’s performance throughout the contract period helps organizations spot weaknesses at individual supplier and supply chain level.

This process of tracking and managing supplier performance helps vendors manage and mitigate the inherent supply chain risks.

Zycus iPerform provides a very comprehensive and configurable supplier performance management platform that includes performance benchmarks, policy and compliance management tools like SCAR (Supplier Corrective Action Request), as well as role-based dashboards and inbuilt analytical modules.

Conclusion

If you are yet to start using vendor management solutions, you should start today. Automated vendor management tools are essential assets that automate tedious supplier-related activities to ensure consistency and accuracy throughout the vendor management process.

By picking lightweight and flexible vendor management software solutions like KiSSFLOW, organizations can create a vendor management process that fits their unique needs. If you’re on the lookout for a vendor management tool, try building your own with KiSSFLOW and see how easy it is!

Automate Your Vendor Management Process in 15 Minutes

Used by Pepsi, Motorola, Domino's and 10,000+ Businesses. No coding required.