What in the world is vendor management? In short, it’s a way of understanding and maximizing your vendor relationships and agreements. And who needs it? Your business does.
Vendor management services are essential because great IT is a team sport, often consisting of a complex mashup of different vendors— an internet service provider, a copy machine guy, a website host and developer, and maybe hundreds of others depending on your environment.
Business leaders don’t typically have the time or the understanding to evaluate what great vendor relationships look like. One way leadership can save time is through vendor management. This means contracting a vendor manager to go through all of a client’s agreements to make sure that they’re getting the best deals possible. If that means contacting the client’s internet service provider (ISP) every time a client’s bandwidth contract terms out, the vendor manager is going to negotiate that down and make sure the right internet solution is provided. They’re going to make sure the client gets more bandwidth and better service, with the leverage and ability to move to a different ISP if world-class value isn’t provided.
Imagine if you as a CEO or CFO have an agreement with a software vendor and they have a certain scope of work. Maybe they have to maintain a database for you including providing updates and monthly performance tuning. How do you know as the CEO that this is the best vendor for the job, and how do you know that they are truly being held accountable to their scope of work or the results promised?
That’s where effective vendor management comes in. It takes the scope of work, gets the client’s account manager on the phone, and it creates an environment of “trust but verify” – going through and making sure vendors are doing what they’re supposed to be doing. And if they’re not, they’re held accountable. If the vendor manager needs to be bad cop, then they’ll absolutely do that and hold the vendor’s feet to the fire to ensure deliverables are met.
In the end, effective vendor management saves time and applies an expertise (negotiation, understanding scope, and maintaining vendor accountability) to tap the most value out of each IT relationship, while serving as a single point of communication to eliminate “finger pointing” and put the focus back on end-results.