We need to realize the importance of a formal vendor management program as more of our IT is outsourced to more and more vendors. We need a tool which can alone help us to measure the performance and efficiency of various vendors effectively. Vendor Management program helps us to clearly define and understand the relationships we have with our vendors so that we know what to expect. The foundation of any new vendor management processes is accumulating precise vendor data.
A Legacy Vendor management system
Instead of a web-based vendor management system, many organizations use non-web based manual VMO systems. However as the number of relationships and vendors increase, handling data gets very tough as information regarding vendors was gets very fragmented. Its resided in file cabinets, Excel spreadsheets, Word documents, Access databases, etc. There is no consistency in the way the information is stored and it becomes a challenge to extract information about vendors when required. The process of managing a vendor relationship is not clear as role and responsibilities are not understood and the information required of vendors to effectively manage the relationship is not known.
What are the advantages/benefits in moving to the web-based app?
The web-based application completely redefines the way we view vendor management. With the system, we are able to combine all vendors, contracts, software, and services into one database and build logical relationships between them. Since vendor management is a distributed function in most organizations, it was critical that the system should be understood and used by individuals throughout various business lines. The web-based application’s ease of use simplifies the process of tracking vendor information and managing on-going vendor activities such as contract expirations, watch lists, and vendor reviews.
How does the application assist with presenting information to the auditors/regulators?
Regulators place high level of importance on an organization’s ability to display that vendors are being managed effectively. The web-based application is the tracking system for all vendor information. With the system, we can easily communicate to auditors and regulators the risk of each vendor and the due diligence activities performed. The reports we generate using the system allows the organizations to quickly respond to audits and examinations and provide comprehensive and current information in a usable format.
Who can use the application and how often?
The application can be used by a number of employees depending on the rights of usage given to each employee. It is originally employed as an organizational priority with senior level management support. The system provides the organization with a holistic view of the documentation and activities surrounding vendors, contracts, software, and services. Vendor management is an on-going process that requires a methodical and diligent approach. The organization can use the system as frequently as on a daily basis or depending on how the data is gathered from different vendors to manage and maintain successful vendor management relationships.