An Actionable Roadmap to Stronger Vendor Relationships

1. An Actionable Roadmapto Stronger Vendor Relationships “Companies that fail to invest in vendor relationship management to analyze risks and prevent failures in the first place lose sales, revenue, and marketvalue.” J.M. Smuckers’ Brand failed to invest in vendor management, effective risk assessment, and proper vendor diligence. The result was a failed product and customers’ trust, which caused them a loss of$400millioninthemarketvalue. Why do you think it happened? Because of the failed vendor management process. We often think collaboration, knowing vendors, and strengthening relationships do not affect the business whatsoever. However, it helps to know more about vendors and ensuretheydeliverqualityproductsandmitigaterisks. sales@crmjetty.com

2. Vendor management is crucial, but all vendors are not the same. They may have different requirements and might follow diverse processes. Hence, traditional vendor relationship management practices won’t be effective. To strengthen vendor relationships, you needtoimplementamodernandtechnology-orientedapproach. • You need to devise a strategy for managing vendors by considering everythingbuyersandsellers,productsandservices,andmore. • This article takes you through the aspects you need to consider on the road to better vendor management. It explains the vendor management process, modern approaches, and tools to improve vendorrelationshipsandprovidebetterlong-termopportunities. • What is Multi-VendorManagement? • Why Vendor Management isEssential? • Stages of Vendor ManagementProcess • Implementing Strategies to StrengthenVendor Relationships • Vendor Relationship Management with Portal –How? • Role ofCRMJetty • What is Multi-VendorManagement? • Multi-vendor management is exactly what it sounds like, managing multiple vendors – from selecting the right vendors to outsourcing, gauging quality, evaluating performance, and ensuring on-time payments. When done effectively, it improves communication, streamlines processes, enhances collaboration, and strengthens relationshipswithvendorsonanindividuallevel. • Nowadays, it’s done using vendor management tools and technologies such as a vendor management portal, which automates processesandstreamlinesoperationswithacentralizedinterface. • Note:Often,businessesmisinterpretvendorsandsuppliers.Theyuse it interchangeably. But vendors are those who supply goods and services to customers, whereas suppliers supply tobusinesses. sales@crmjetty.com

3. Suppliers are the first link in the supply chain, while vendors are the last in the chain. So, while looking for a vendor management portal, makewhatyourequireclear. Learn More about the Supplier ManagementPortal Why Vendor Management isEssential? Businesses like yours can maximize their value from outsourcing capabilities by improving vendor relationships. Vendor management bolstersbusinessesthatworkonstrategicalliances. Traditionally, businesses didn’t have much knowledge about vendors. It was all business. Plus, they didn’t have the resources to manage multiple vendors simultaneously. They tracked the records through Excel and handled operations and transactions manually. There wasn’t a way to identify the risks and the challenges in the process, including suitable vendors. Take the example ofMorgan Stanley, whose poor vendor management exposed sensitive customer data, costing them $60million. sales@crmjetty.com

4. Vendor management provides a unified interface where businesses can manage all their vendors systematically. Here are the challenges thatbusinessesfaceandhowvendormanagementhelps. RiskAssessment Businesses fail to understand that selecting suitable vendors is crucial. This is because there’s a high risk involved with some vendors that have access to sensitive information or impact customers on the whole. Take Morgan Stanley and J.M. Smuckers from above. They missed evaluating the vendor and the risk involved with it. The cost is customers’ credibility, decreased market value, lawsuits, and millions ofdollars. Hence, assessing their profile and identifying if they are suitable for the business. Vendor management covers risk management that helps businesses evaluate and monitor vendors’ performance. It helps them set standards for vendors for easy filtration and sort thosewhoarenotperformingasperthemark. DueDiligence Not every vendor may deliver quality or compliance with the regulatory laws and policies. While some may perform well, others may use unethical practices. What does that condone for your businessiftheyemploychildrenforwork?Itimpactsyourreputation andmayresultinlosingcustomers’goodwillandcustomers. Itisessentialtoconductabackgroundcheckcoveringtheirprevious employment, financial status, market value, legal and regulations knowledge, operational methods, and risk involved. A vendor management system provides an automated filtering option that removes vendors who don’t match the defined parameters, freeing yourteamtofocusonprioritytasks. Outdated Information and DataStorage sales@crmjetty.com

5. Another challenge organizations face with legacy systems is having inaccurateoroutdateddata.Theprocessthatvendorsrefertomight not be up-to-date. Besides, as businesses expand, data storage is crucial. Storing vendors’ information in Excel may result in data loss ortampering. A vendor management portal provides data storage where you and other organizations like yours can store their vendors’ information – profile, inventory, transactions. It can access that information easily withoutswitchingbetweenplatforms. Thevendorscanmanagetheir profiles themselves, which auto-syncs with the CRM, helping organizations stayupdated. Updated information entitles organizations to manage their procurement and vendorseffectively. iv. Lack ofVisibility Without a proper management system in place, businesses don’t have proper visibility of the vendors and their performance. They don’thave any measurestotracktheirwork,whichultimatelyaffects theirbusinessintermsofpoordecision-making. A vendor management system provides a centralized system that helps track vendors’ performance and analyze the end results. It improves visibility, offers transparency, and aids in better allocation ofresources. I need a Vendor Management Portal. Let’sDiscuss Stages of Vendor ManagementProcess sales@crmjetty.com

6. A smooth vendor management process is driven by company goals, KPIs, collaboration, and continuous improvement. To accomplish this, you have to describe the process you would follow, which must beeffective. Every business has its way of managing vendors and getting results. Here’s the standard process that you can follow to align with your vendors. i. Set Goals andPriorities Set your goal based on the challenges you’re facing. Start by defining your KPIs and organizational requirements. It can be related to data storage or performance review. Define your priorities, whether it’s enhancingcustomerexperienceatpresentorincreasingsales. With all the KPIs and requirements in hand, send out proposals with your requirements and decide whether the set indicators and the received requests align with your business requirements. This will help you understand vendors’ involvement and measure their performance in laterstages. sales@crmjetty.com

7. Create a Vendor ManagementTeam • Assign the tasks of managing vendors to a selected few within the organization. Employ them to define KPIs, select relevant vendors, negotiate the contracts, assess risks and vendors’ performance, managetransactions,andtracktheactivities. • Ensure that they are skilled enough to manage vendor relationships because they serve as liaisons between vendors and other business departments like human resources. They channel the needs and demands of thevendor. • Identify, Choose and Organize theVendors • On receiving proposals, evaluate the applications and filter them as perthenatureofserviceandthedesiredgoals.Forexample,youmay need experienced vendors from a specific area or someone who has a better offering. Define criteria and classify the vendors based on criticality, essentiality, and nature of services. Classification helps you evaluate their profile and negotiations individually and decide if they are the right fit for your business. It gives a sense of their importance tooverall company goals. • With classification, also assess the risk because critical and high-risk vendors can impact your business in case of vendor relationships or business failure. Ask these questions while selecting and organizing vendors: • Are the business offerings and contract expiry as per my requirements? • Does the vendor have to make any financial transactions on behalf of theorganization? • Does the vendor require access to sensitive data toaccomplish specifictasks? • Doesthevendorcomplywiththelegalrequirements? sales@crmjetty.com

8. Is the vendor’s offering unique and challenging to find an alternativefor? • If the answer is yes to most questions, that’s a high-risk vendor. Choosewisely! • Tip:Setindicatorsforhigh,moderate,andlow-riskvendors. • Conduct DueDiligence • Once you have identified vendors, you know the documents and information required to assess their potential and proceed further with the negotiation. Make sure you, i.e., the vendor management team, ask for all the information, such as financial statements, previous work history, security measures, work methodology, compliances, rules and regulations they follow, etc., especially from the high-risk vendors. It will clarify whether the vendor is trustworthyandcapableenoughforyourbusiness. • NegotiateContracts • After selectingthevendors,it’stimetositwiththemanddiscussthe contract. Know about their offerings and see what you can offer them. Discuss the terms and conditions of the contract. Follow standard policies and procedures for negotiation and outline the roles and responsibilities of vendors. Address confidentiality, disruptions, compliance, rules and regulations, financial aspects, business continuity, security, frequency of reports, contract updates, etc. • Clearly state the consequences of breach of confidentiality. Establish asecuremailaddressforbothparties. • Manage and MonitorKPIs • Constantmonitoringisessentialtogetclarityofvendors’operations, vulnerabilities, and other risks that could affect the business. Hence, after partnering with vendors, start monitoring theirperformance. sales@crmjetty.com

9. Track their activities, assess the risk, identify the loopholes, and whethertheycomplywiththerulesandregulations. ImplementingStrategiestoStrengthenVendorRelationships Most businesses think that selecting vendors is enough to get value in their industry. The end result of vendor management is to build vendor relationships that strengthen businesses and provide a competitive edge, which requires proper strategy with tools and techniques tobuild long-lasting relationships. You can build value, reduce risk, and improve vendors’ performance withafewbestpractices.Let’sseewhatthoseare: i. Share Information andPriorities Thekeytobettervendorperformanceistosharecrucialinformation withthem.Thatdoesn’tmeansharingtheentiredatabasewiththem. Vendor management practices share only the correct information with vendors at the right time to serve your needs better. Itmay sales@crmjetty.com

10. includeforecastinformation,productlaunches,design,expansion,or relocationchanges. Involve Key Vendors inStrategizing If vendors supply key services to your business, involve them in strategy meetings on the products/services they are working on. Know that you involve them because they are experts in their field andcouldhelpmakeproductsandservicesbetter. Prioritize Proactivity, Communication, andCollaboration One of the important characteristics of vendor relationships management is to rehabilitate rather than replace vendors who help businesses reach their goal of sustainable procurement. A collaborative approach with streamlined communication and proactive support not only bridges the gap between vendors and businesses but also streamlines and optimizes theprocesses. It helps brainstorm ideas and identify how businesses can create maximum value from theirpartnerships. Set theStage for Digital Technologies Eliminating waste, minimizing risks, and cutting costs are the initial stages of vendor management. By investing in digital tools like a vendor portal, you can turn your vendors into partners who share your goals andsuccess. A vendor portal provides central management of vendors’ profiles, invoices, activities, sales figures, performance, etc. You can capture, analyze, and review vendors’ performance in real-time. Besides, you can automate several aspects of your vendor management process like vendor onboarding, automated proposals, notifications, document sharing like certificates, affidavits, compliance policies, andmore. sales@crmjetty.com

11. Investing in tools like vendor portal gives you access to automation and data management that helps you track your vendors’ performance and aligns vendors’ and internal stakeholders’ activities with your businessgoals. Vendor Relationship Management withPortal – How? A vendor portal provides features that help you reduce your staff’s workload while empowering your vendors to manage their activities themselves. Itdrivesefficiencywithfeatureslike: OnlineRegistrations Invite vendors and suppliers to be a part of your global network withouthassle. Auto-filtering ofApplications Get rid of the manual filtration by providing functionality that automaticallyfiltersapplicantsbasedonthesetcriteria. Quotes and ProposalsManagement Allow different vendors to share their proposals and requests via a secureloginwithoutyouhavingtoaskforit. iv. Vendor Comparison Evaluatethevendorsautomaticallybased experience, contracts, andoverall work history. on their previous AutomatedRanking Rate vendors’ profiles by defining certain indexes based on history, compliance, delivery time, performance,risk, etc. Invoicing andPayments sales@crmjetty.com

12. Generate and share invoices and purchase orders directly from and through theportal. Role-based CRMAccess Let vendors view relevant information in the CRM based on role-specificaccess. MobileResponsiveness Allow vendors and other stakeholders to work from anywhere via a mobilephone. Role of CRMJetty in VendorsManagement We can help you develop a vendor management portalto ensure your vendors deliver maximum value to your organization. From self-service to automated workflow and additional features, we can develop a custom solution that consistently delivers efficiency, visibility, and vendorsatisfaction. Vendor relationship management is about balancing the human side of the business with the convenience that technology offers. We understandthisandensurethattheportalprovidesthebestofboth. Tell Me, How You Can HelpMe? Source: https:/ www.crmjetty.com/blog/an-actionable-roadmap-to-stron ger-vendor-relationships/ sales@crmjetty.com