A Complete Guide to Vendor Management System
What is a vendor management system?
Vendor management system (VMS) are software suites that help businesses take care of processes involved in the end-to-end vendor management process, from initial contact to final closure of a deal or establishing a business relationship. Taking a modular approach, they usually have specific modules or apps that take care of processes like vendor onboarding or vendor payments.
Why people used to pick Vendor Management System (VMS)?
Vendor management is key to the success of any procurement team, and using the best vendor management system does offer some benefits in this context. Let’s take a look at a few of these.
- Your procurement team establishes a successful vendor relationship management initiative with minimal expenditure of resources, both personnel and financial
- Goods are delivered, and services rendered, in time
- Customer relationships improve too, as you deliver consistent results
- Vendor management systems bring consistency and efficiency into the end-to-end processes involved
- You can introduce automation to tasks like vendor management, and then analyze vendor performance with zero manual effort
- Compartmentalize vendors according to factors you choose, using custom reports
- Optimize productivity within procurement management
Streamline Your Procurement Process With Kissflow
Before you pick a Vendor Management System..
Before picking a vendor management system, make sure the answer to each question given below, is a ‘yes’.
- Can the system process purchase requisitions and purchase orders?
- Can it control all aspects of vendor management (vendor onboarding, rating, etc.)?
- Can it handle invoicing tasks?
- Does it allow easy integration with accounting systems or ERP?
- Does it provide reporting and metrics, specific to the vendor management process?
- Will it work well with other procurement tools?
- Can it scale well?
- Is the system user-friendly, and will it garner employee buy-in?
- Ensure the vendor management system pricing is within your budget
Features you should be looking for
1.Easy vendor onboarding
The system must make it possible for you to register vendors quickly and easily, use multilingual catalogs, and access vendor information instantly.
2.Comprehensive vendor rating
The ability to rate vendors using key performance metrics like policy compliance, delivery quality, timeliness, and more.
Giving vendors the ability to easily update their information, and get alerts on order and payment details.
4.Quick vendor screening
Retrieve and verify supplier data like business reports, financial and credit risk data.
With sub-par supplier performance, initiate corrective action plans (SCAR) or offboard them
Head to head: standalone VMS vs. comprehensive procurement solutions
Let’s get this out of the way first: most procurement solutions don’t offer a scintillating set of features to set them apart from VMS, at least within the context of vendor management.
“So why even have this discussion, then?”
That’s because of disparate procurement apps and software, while effective at single tasks like (say) vendor onboarding, have a problem with unconnected data silos. For instance, an approved purchase request has to then be sent to the purchase order app, while a connected system like Kissflow Procurement Software can help approved PRs auto-trigger POs.
The benefits of going with a comprehensive procure-to-pay solution for vendor management
Managing vendors and their information in email or sheets make the vendor management process messy and inefficient. Some benefits of using an online procurement solution to manage vendors as opposed to using emails or sheets, include:
- Transparent purchase requisition approval process
- Better vendor relationship management
- Centralized management of purchase requisitions, invoice payments, billing information, and contracts, as well as other procurement processes
- Unified interface to manage vendors and their work
- Better security and compliance management
- Visibility into the spend
- Integration with the other tools in the company
- More detailed information about the performance of the suppliers and the vendors
- Availability of past records for audit trails
- Ability to make informed decisions about the choice of vendors
Why a comprehensive solution like Kissflow Procurement Cloud makes the most sense
An automated vendor management solution brings the best of cutting-edge procurement technology into the process. Procurement tools like Kissflow Procurement Cloud take things up a notch, threading the gaps between various procurement function-related data, and streamlining purchasing as a whole.
To settle any doubts you may still have, check out the free demo of Kissflow Procurement Software
Cloud and see how well it can suit your procurement team’s vendor management needs, and then some!