Businesses that manage their vendors effectively grow 2x faster than their peers who ignore vendor management and collaboration. However, the vendor management process is fraught with complexity: multiple steps, diverse supplier bases, too many stakeholders, ever-changing regulations, and more.
In order to achieve efficiency, organizations need to implement a sophisticated vendor management application that will not only optimize the entire process but also build a better relationship with suppliers. There are an array of standalone vendor management apps available in the market, and organizations don’t have the time to analyze each one.
What if there were an alternative, though? A comprehensive procurement tool that could cover vendor management, all the while ensuring that this happens seamlessly alongside other procurement functions. Before we dig deeper into this, here’s all you need to know about vendor management apps in general.
What is a vendor management application?
A vendor management app is a software solution that automates every step of the vendor lifecycle from vendor identification and onboarding to vendor performance rating and offboarding. These vendor management apps help businesses collaborate effectively with their vendors, make insightful decisions, and track supplier performance easily.
Key features of a vendor management app
In any vendor management process, the primary goal is not to make suppliers submit but to collaborate successfully with them. A vendor management application offers organizations the framework they need to enforce compliance and manage their suppliers as well as provide the tools they need to make it easier for them to collaborate with vendors.
Here are the five features every vendor management application must have:
1. Cloud-based platform
A centralized platform that stores, routes, approves, and manages all supplier-related documents can be accessed by all internal and external users irrespective of their location or time-zone.
Procurement automation tools like Kissflow allow organizations to store these documents securely in cloud-hosting service of their choice like Dropbox, Google Cloud, etc.
2. Real-time tracking
Keeping track of vendor performance is an ongoing process. Manual tools like paper forms and disparate online files make supplier audits inherently difficult.
As all critical vendor performance data is stored in a centralized location, it is easy to analyze and rate suppliers. 360-degree visibility keeps the vendor management process transparent and provides real-time information.
3. Robust reporting
Vendor management apps which come with an inbuilt reporting tool allow organizations to identify potential vendor risks.
Powerful reporting capabilities help buyers keep track of vendor quality events like deviations, corrective and preventive action (CAPA), supplier corrective action request (SCAR), and more.
4. Automated workflows
Workflow automation improves the overall efficiency and cycle time by routing, coordinating, executing, and monitoring every step of the vendor management process without any human effort.
Automation helps buyers and vendors alike to stay track on contract terms and policies keeping the vendor management process in line with evolving best practices and regulations.
In a compliance-driven environment, ‘effective communication’ refers to much more than an exchange of information with vendors. To ensure compliance, all forms of communication must be tracked and well-documented.
An ideal vendor management app must offer a robust system to communicate and receive critical information from all third-party vendors.
Benefits of taking a digital approach to vendor management
Vendor management applications incorporate supplier management best practices and offer organizations the ability to efficiently manage their vendors and effectively track product/service quality.
An ideal vendor management application:
- Gives a holistic view of suppliers
- Improves supplier collaboration and communication
- Provides visibility into potential risks
- Offers a centralized platform to manage suppliers
- Makes internal and external audits smooth
A comprehensive procurement solution is the answer
Whatever their industry vertical, the procurement teams in various businesses have moved on from a broad purchasing-focused way of doing things to a more vendor-relationship focused approach. It’s been happening for a long time. For over 25 years, companies have been placing an emphasis on business relationships with vendors.
There are a number of choices–and noises made by marketing teams about these choices–when it comes to choosing your approach to vendor management. You can choose to pick from a number of vendor management solutions out there today, as well as comprehensive procurement solutions.
Function-focused procurement apps and software, while effective at single tasks like vendor onboarding, have a problem: disparate, unconnected data silos. For instance, vendor details from a vendor onboarding app need to be sent to the vendor rating app, while a connected system like Kissflow Procurement Cloud can do so many things like this automatically.
Key vendor management-specific features
Easy vendor onboarding
Register vendors quickly and easily, use multilingual catalogs, and access vendor information instantly.
Comprehensive vendor rating
Rate vendors using key performance metrics like policy compliance, delivery quality, timeliness, and more.
Give vendors the ability to easily update their information, and get alerts on order and payment details.
Quick vendor screening
Retrieve and verify supplier data like business reports, financial and credit risk data.
Instantly confirm goods receipt notices (GRNs), goods return ship notices, and more.
All data in one place
Access all POs, PRs, contracts, and confidential vendor payment information, all in one place.
Easy vendor enrolment
Collect key vendor information to screen them based on reputation, past performance, and more.
With sub-par supplier performance, initiate corrective action plans (SCAR) or offboard them.
Incorporate rate contracts; enforce contract pricing when catalog prices are raised.
Vendor management applications can change and enhance the way your suppliers interact with your organization. These vendor management apps help you build a better vendor relationship by establishing accountability in the process, ensuring transparency in every step, accelerating the process, and improving the quality of supplier interactions.
Comprehensive procurement software like Kissflow Procurement Cloud take things up a notch, bridging 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 Cloud and see how well it can suit your procurement team’s vendor management needs, and more!