What is vendor relationship management?

Companies rely on outside vendors to help reach their goals. However, few are dedicating the time to ensure the success of those vendor partnerships. By implementing an effective vendor relationship management strategy, companies can achieve measurable success and see faster return on investment.?

What is vendor relationship management??

Vendor relationship management (VRM) is the process of developing and maintaining relationships with vendors. VRM takes place throughout the vendor lifecycle, from procuring, onboarding, governing, and evaluating, and is a critical step in delivering business value. Like any relationship, it takes work to keep your vendor relationships strong and ensure they are meeting the needs of the business. It is a cross-functional process that involves teams from procurement, finance, operations, and other departments. When done correctly, successful VRM can help companies control costs, reduce risks, and achieve mutual success.??

Why is it important??

We all know the struggle of watching friends mismanage a relationship. Even with good intentions, miscommunication around expectations can put a strain on any partnership and make a mundane conversation seem like a tense negotiation. At times you want to intervene, and at others you wouldn’t touch it with a ten-foot pole.

Why now??

Vendor relationship management has become especially critical in the last few years. Companies are becoming increasingly reliant on software to support business operations — application portfolios are now averaging 371 applications, and that is just in one vendor category!?

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