What are the best practices for configuring your vendor management platform?

1 Define your vendor criteria

Before you start using your VMP, you need to define your vendor criteria and categorize your vendors accordingly. Vendor criteria are the standards and expectations that you have for your vendors, such as quality, performance, compliance, security, and service level agreements. By defining your vendor criteria, you can align your vendor selection and evaluation processes with your business goals and needs. You can also use your VMP to assign scores and ratings to your vendors based on your criteria, and identify the best performers and the areas for improvement.

2 Integrate your data sources

One of the benefits of using a VMP is that it can consolidate and centralize your vendor data from various sources, such as contracts, invoices, surveys, reports, and feedback. However, to ensure that your data is accurate, complete, and up-to-date, you need to integrate your data sources with your VMP. This means that you need to establish a data governance framework that defines the roles, responsibilities, and rules for managing and sharing your data across your organization and with your vendors. You also need to use data validation and verification tools to check the quality and consistency of your data.

3 Automate your workflows

Another advantage of using a VMP is that it can automate your workflows and tasks related to vendor management, such as onboarding, contract management, invoicing, payment, performance monitoring, and reporting. By automating your workflows, you can save time, reduce errors, and enhance efficiency and productivity. However, to automate your workflows effectively, you need to map out your current processes and identify the steps, inputs, outputs, and dependencies involved. You also need to customize your VMP to match your workflows and set up triggers, alerts, and notifications to keep track of your progress and status.

4 Communicate with your vendors

A key aspect of vendor management is communication. You need to communicate with your vendors regularly and clearly to establish trust, transparency, and collaboration. A VMP can help you communicate with your vendors by providing a centralized platform where you can exchange information, feedback, and documents. However, to communicate with your vendors effectively, you need to use the appropriate channels, formats, and frequencies for different types of communication, such as formal, informal, strategic, operational, or transactional. You also need to define the roles and responsibilities of your communication team and ensure that they have the skills and tools to communicate with your vendors.

5 Monitor and measure your vendor performance

The ultimate goal of vendor management is to optimize your vendor performance and value. To achieve this goal, you need to monitor and measure your vendor performance regularly and systematically. A VMP can help you monitor and measure your vendor performance by providing dashboards, reports, and analytics that show your vendor performance indicators, such as quality, cost, delivery, innovation, and satisfaction. However, to monitor and measure your vendor performance effectively, you need to define your key performance indicators (KPIs) and targets, and align them with your vendor criteria and business objectives. You also need to use feedback and reviews to evaluate your vendor performance and identify gaps and opportunities for improvement.

6 Review and update your vendor management strategy

Finally, vendor management is not a one-time activity, but a continuous process that requires constant review and update. A VMP can help you review and update your vendor management strategy by providing insights and recommendations based on your vendor data and performance. However, to review and update your vendor management strategy effectively, you need to conduct regular audits and assessments of your vendor management processes and practices, and compare them with the best practices and benchmarks in your industry. You also need to solicit feedback and suggestions from your stakeholders and vendors, and implement changes and improvements accordingly.

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?