Implementing a systematic vendor management program "helps address imbalances in power between a company and it's vendors", according to Gartner analyst William Synder. Snyder was speaking at a Gartner Symposim in which he stated that vendor management provides organizations the ability to not only manage their information flow, but also to hold an upper hand in negotiations.
We know that vendor management helps organization optimize their spend and create a consistent process in which to communicate with vendors. This is achieved through centralizing information through a Vendor Management Office or VMO. From experience, we've found that VMO's provide timely information which can be used to negotiate better agreements with vendors because information is now easily accessible. Not only that, a Vendor Management Office can analyze, communicate, and help mitigate risks for vendors who are at a higher risk for failure due to various reasons. And last but not the least, VMO's help create better relationships with vendors because again, centralized management of vendors results in better communication and information dissemination. When this happens, vendors no longer remain vendors, but become partners who work towards the success of an organization. According to Gartner's Synder, “Systemic vendor management is about paying attention to vendor relationships" because in the event of a failure, vendors will be more responsive when there is an existing relationship between them and the organization.
When we've set up Vendor Management Offices for our clients, we've found that customers actually start like their vendors and vice-versa. That's because the clients and their vendors have both bought into the common goal of creating efficiency from the perspectives of reduced costs and improved processes.
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