MANAGED IT SERVICES | 4.5 MIN READ
Vendor management prevents business stagnation by ensuring the best contracts and offerings. As a Managed IT Services Provider (MSP), we employ vendor management best practices to best assist our clients in meeting and exceeding business goals. In this article, our goal is to educate your business on what vendor management is and how you can use it to improve business operations. Keep reading to learn more!
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Why is Vendor Management Important?
How a Managed IT Services Provider Can Help
What is Vendor Management?
Vendor management is a process that occurs before and after a contract is signed with a vendor to ensure the best pricing, offering, and customer service. Before a contract is signed, companies may scour the market to determine the best vendors by comparing factors such as pricing and offerings.
Once a contract is signed, businesses will manage the relationship with their vendors to ensure that they obtain the best pricing, performance standards are met or exceeded, and a roadmap for the future of the contract is planned, for instance any necessary upgrades down the road.
Vendors can be anyone from a business' furniture supplier to their Internet provider. The management of the relationships with these vendors is crucial for businesses who wish to experience the above benefits and more.
However, managing the relationships with all of these vendors can become time-consuming, which is why some businesses prefer to outsource this business-critical task to a third-party company.
Why is Vendor Management Important?
Businesses employing effective vendor management processes can experience the following benefits:
Better Initial Offerings
Effective vendor management typically results in the selection of the best products and services for your business.
By conducting thorough market research, your business can find the best offering from the start instead of potentially suffering through an inadequate contract before finding a suitable alternative.
Contract Cost Savings
By diligently comparing pricing within a vendor's market, you can potentially find cost savings by starting a bidding war between vendors in the same industry.
Additionally, if you use a competitor's cheaper offering to signal to your current vendor that you may not renew your contract, they may offer you a cheaper deal.
Improved Vendor Service and Performance
By vetting vendors before contracts are signed to ensure that they have high-quality customer service, and then analyzing their performance during the contract period, one can ensure that their vendors deliver on what they initially promised.
Effectively analyzing a vendor's performance is crucial in holding them to their promises, as any issues or problems will be identified and addressed. Without periodically evaluating your contracts to ensure that your vendors are delivering on their promises, you may be settling for a subpar offering.
If your vendor is severely underperforming, consistent documentation of their shortcomings can also give you a better case if you decide to break your contract to move to another vendor.
When the end of your contract with a vendor is approaching, even if you are satisfied with their performance, it is a good business practice to periodically compare your current vendor's offering to other options.
This prevents your business from becoming stagnant, and can potentially get you a better offering from your current vendor during your next contract period if you express interest in moving on to another vendor.
Centralized Contract Storage and Management
Besides ensuring the best pricing and offering on the market, another pillar of effective vendor management is proper centralized contract documentation and management.
Businesses can have so many vendors that it can become overwhelming to manage all the paperwork and relationships with them. Store all vendor contracts and contact information in one centralized location online to streamline business operations. The last thing you want to do is shuffle through piles of paper trying to find a contract when you need it.
Additionally, evaluate your business processes for tasks such as vendor contacts and contract renewal to ensure efficiency. For instance, if your business works with 10 vendors that all have different contract end dates, does your business have a calendar with these dates mapped out as well as automatic reminders to renew or break the contract?
If not, you could be creating future communication problems from the start of your contracts. Additionally, does your business have employees who are tasked with periodically managing the relationship with each of your vendors?
While you don't need to be best friends with your vendor, periodically starting a dialogue with them about performance and building a little camaraderie can go a long way in improving communication and future contract negotiations.
How a Managed IT Services Provider Can Help
Business does not exist in a vacuum. Companies manage relationships with many vendors on a day-to-day basis to keep business operations running smoothly.
Organizations have enough business-critical tasks to complete that they don't need to be burdened with managing the contracts and relationships with all of their vendors. A Managed IT Services Provider can oversee your business' relationships with a variety of technology vendors.
Since MSP's have in-depth knowledge about cyber security and technology in general, they can help your business aptly identify its needs and wants in a technology vendor and then find suitable candidates for the job.
An MSP can take the burden off their clients by personally working with these vendors. Since MSP's manage your network functionality and security, naturally it makes sense for them to work with the vendors that ensure these points.
Additionally, since Managed Service Providers already have established relationships and partnerships with some of the best vendors in the industry, they can typically get your business better pricing on products and services than your business could get by yourself.
The following list comprises the main types of technology vendors that MSP's typically work with:
- Business Phone Providers
- Copier Manufacturers
- Website Hosting Platforms
- Cable or Internet Providers
- Cloud Storage Providers
- Line of Business Applications (SalesForce, QuickBooks, etc.)
- Cyber Security Software Providers (firewall, antivirus, anti-ransomware, etc.)
How Else a Managed IT Service Provider Can Help
Project Management
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Office Expansions and Moves− If you're adding new employees or opening a new office, an MSP can ensure that all technology, from business phones to workstations, is properly set up by planning the technical installation.
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Remote Transitions− Whether your office is going remote temporarily or permanently, an MSP can set it up and secure it by installing VPN's, remote conferencing platforms, ensuring data encryption, and more.
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Network Upgrades− Periodic network maintenance, for instance hardware and software patches and upgrades, ensures optimal performance and minimal downtime.
RELATED: Project Management [How MSP's Can Help]
Data Privacy Regulatory Compliance
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Protection from Cyber Attacks− An MSP can install a host of security hardware and software, from firewalls and anti-ransomware to email-based phishing filters and more.
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vCIO Consultations− Virtual Chief Information Officers can be used to plan to future of your cyber security plan as well as build a technology roadmap to ensure compliance.
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Centralized Security Management− By centralizing where data is stored and accessed, you minimize the amount of data accessible by third parties.
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Implementation of Real-Time Alerts− In the event of a cyber attack, an MSP can ensure that it's quickly resolved and that necessary parties are notified.
RELATED: Data Privacy Compliance: How MSP's Can Help
We hope that this article answered your questions regarding vendor management.
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