How do you manage vendors as your organization grows?

1 Assess your vendor needs

Before you start looking for new vendors or renegotiating existing contracts, you need to have a clear understanding of what your organization needs from its vendors. This includes defining your objectives, expectations, requirements, and budget for each vendor category. You also need to identify any gaps, risks, or opportunities in your current vendor portfolio, and prioritize them accordingly. A vendor needs assessment can help you align your vendor strategy with your organizational strategy, and avoid wasting time and money on unnecessary or unsuitable vendors.

2 Evaluate and select vendors

Once you have a clear picture of your vendor needs, you can start evaluating and selecting potential vendors that can meet them. This involves conducting market research, requesting proposals, comparing offers, and verifying credentials and references. You also need to consider the vendor's reputation, reliability, compatibility, and innovation potential. A vendor evaluation and selection process can help you find the best fit for your organization, and establish a solid foundation for a successful vendor relationship.

3 Negotiate and manage contracts

After you have chosen your preferred vendors, you need to negotiate and manage the contracts that will govern your vendor relationship. This involves defining the scope, deliverables, terms, conditions, and payment methods of each contract, and ensuring that they are fair, transparent, and compliant with your policies and regulations. You also need to monitor and review the contract performance, and address any issues or changes that may arise. A contract negotiation and management process can help you protect your interests, reduce risks, and optimize outcomes.

4 Communicate and collaborate

Communication and collaboration are essential for maintaining a healthy and productive vendor relationship. You need to establish regular and effective communication channels with your vendors, and share relevant information, feedback, and expectations. You also need to foster a collaborative culture, and encourage mutual trust, respect, and understanding. You can use various tools and methods to facilitate communication and collaboration, such as meetings, reports, surveys, dashboards, and online platforms. A communication and collaboration process can help you build rapport, resolve conflicts, and improve performance.

5 Measure and improve vendor performance

Measuring and improving vendor performance is a key aspect of vendor management. You need to set clear and measurable goals and metrics for each vendor, and track and evaluate their progress and results. You also need to provide constructive and timely feedback, and recognize and reward good performance. You can use various tools and techniques to measure and improve vendor performance, such as scorecards, benchmarks, audits, reviews, and improvement plans. A performance measurement and improvement process can help you ensure quality, efficiency, and value.

6 Review and optimize vendor portfolio

As your organization grows, your vendor portfolio may also change. You need to review and optimize your vendor portfolio periodically, and adjust it to your changing needs and goals. This involves analyzing your vendor performance, satisfaction, and impact, and identifying any strengths, weaknesses, opportunities, or threats. You also need to decide whether to renew, renegotiate, or terminate any vendor contracts, and look for new or alternative vendors if needed. A portfolio review and optimization process can help you maximize your vendor benefits, minimize your vendor costs, and enhance your vendor competitiveness.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?