You’re tasked with building a vendor management program. How do you start?

1 Define your objectives

Before you select and engage with any vendors, you need to have a clear vision of what you want to accomplish with them. What are your business needs, expectations, and priorities? How do you measure success and value? How do you align your vendor strategy with your organizational strategy? These are some of the questions you should answer to define your objectives and scope for your vendor management program.

2 Assess your current state

Next, you need to evaluate your current situation and identify any gaps or issues that need to be addressed. How many vendors do you have and what are their roles and responsibilities? How do you communicate and collaborate with them? How do you monitor and evaluate their performance and compliance? How do you manage your contracts and agreements? How do you handle any disputes or problems? These are some of the aspects you should assess to understand your current state and identify any areas for improvement.

3 Develop your processes and policies

Once you have a clear picture of your objectives and current state, you need to develop your processes and policies for your vendor management program. These should cover the entire vendor lifecycle, from sourcing and selection, to negotiation and contracting, to onboarding and integration, to management and oversight, to termination and exit. Your processes and policies should be consistent, transparent, and documented, and they should reflect your best practices, standards, and requirements.

4 Implement your tools and systems

To support your processes and policies, you need to implement your tools and systems for your vendor management program. These may include software, platforms, databases, dashboards, reports, or other solutions that can help you manage your vendor data, documents, contracts, performance, risks, issues, and communication. Your tools and systems should be user-friendly, secure, and scalable, and they should integrate well with your existing infrastructure and workflows.

5 Train your staff and stakeholders

Another key step to building your vendor management program is to train your staff and stakeholders on how to use it effectively. This includes your internal teams who are involved in vendor selection, negotiation, management, or evaluation, as well as your vendors who need to understand your expectations, processes, and policies. You should provide regular training sessions, workshops, manuals, or other resources that can help your staff and stakeholders learn and apply your vendor management program.

6 Review and improve your program

Finally, you need to review and improve your vendor management program on an ongoing basis. You should collect and analyze feedback, data, and metrics from your vendors, staff, and stakeholders, and use them to measure your progress, performance, and value. You should also identify any challenges, risks, or opportunities that may arise, and adjust your objectives, processes, policies, tools, or systems accordingly. You should aim to continuously improve your vendor management program and ensure it meets your changing needs and goals.

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?