2020 flew by as fast as it arrived. However, unlike years past, 2020 left a mark. Not just an indent either; 2020 certainly secured itself at least a few pages in the history books to come. One of the major results of the year was a massive acceleration into a more virtual economy. The digital economy is better suited to more industries than others, but either way; it’s likely here to stay. This, in turn, has led many companies to begin investing in remote operations – including in procurement. This then begs the question, how to effectively manage vendor information, both in general and in a more virtual procurement environment. 

Without vendors, there would be no need for procurement. Although, without vendors, there would be no economy either. Instead, however, creating a strong library of vendors for your company to return to will benefit your organization in the long run. Building long-lasting relationships with quality vendors will yield in a myriad of benefits for your business as a whole. 

Building Vendor Relationships

Building a vendor relationship really begins before your company’s first interaction with that vendor. Rather, the true first step in building a relationship with vendors is in the research that your organization conducts. 

This is also where the first step in effectively managing vendor information comes in: investing in a high-quality and comprehensive procurement software. Implementing procurement software is quickly becoming recognized as an industry best-practice in a large range of market segments, and rightfully so. Procurement software will bring a whole toolbox of tactics and strategies into your organization in order to maximize cost-savings, boost efficiency, and streamline the entire procurement system. 

Delving into a more microscopic viewpoint of the power that procurement software will bring your company starts with the beginning of the contract lifecycle: vendor short-listing. Procurement software can actually automate this process through a much larger database of applicable and available vendors than a man-powered team ever could. Additionally, your staff can set custom and unique parameters in order to compile a short-list of vendors specifically suited for any type of contract your team may be looking to fulfill. 

After short-listing these vendors, your procurement software is capable of retaining vendor-profiles, and creating saved short-lists for your team to streamline the process even further down the line, when new contracts of the same variety are up for auction. Going even further, a strong procurement software will allow your staff to pull individual vendors from these saved short-lists in order to create unique and custom short-lists even further fine tuned. 

This can also benefit your organization in listing contracts for reverse auction, as having vendor information readily stored will inform your procurement staff on the vendors and sourcing companies that are most reputable and adhere to the most elevated set of business practices available. 

Managing Vendor Information For Procurement

Taking careful record of vendor information is one of the vendor management best practices that are widely adopted today. A few vendor management best practices that specifically apply to vendor information, however, include tracking supplier performance, verifying vendor qualifications, and even adopting vendor risk management protocols. 

Verifying vendor qualifications is part of the pre short-listing and short-listing process. In fact, there’s also an element of vendor qualification verification in the invitation to the reverse-auction. As many companies will only select a handful of vendors from their shortlist to attend the reverse-auction; a request for proposal is sent out to the considered parties. 

In other words, there are three layers of vendor verification that your procurement staff and procurement software should be going through before even reaching the reverse auction stage of awarding a procurement contract. 

The information tracking doesn’t end there, though. Supplier performance tracking is another vital indicator of a solid business partner in procurement. This, again, is a hybrid task that can be achieved through the combination of manual oversight and automated programming through the procurement software your team employs. 

Having a clearly documented history of supplier performance will benefit your procurement team greatly in being able to make informed decisions about ongoing contracts that are late in their lifecycle. 

Benefits of Strong Vendor Management

Vendor management goes hand-in-hand with contract management. However, rather than reviewing the logistics and details of the contracts themselves; the subject under the microscope are the actual vendors that your team is contracting with. 

As such, your team will be able to accomplish two things decisively. The first: vetting and sifting through subpar vendors with available information. In the same vein, your organization will have the insight to recognize poorly structured contracts and remove them from your pool of ongoing contracts. 

Secondly, the ability to create, build, and maintain strong relationships with vendors that your team is able to confidently, responsibly, and cordially partner. Another current benefit that strong vendor management practices bring to your business is an elevated customer perception. By partnering with socially responsible vendors your company will be seen and recognized for conducting responsible sourcing practices, a huge component of company image in today’s economy. 

Final Thoughts

There are many intertwined aspects of procurement. Vendor management is one of those core ingredients, alongside contract management, and source-to-contract practices. 

Developing a strong sense of vendor management will benefit your company, not only in the immediate, but also in the long run by building long-standing relationships with vendors that reflect positively for both sides of the contract. 

For more information on vendor management, or how to effectively manage vendor information, visit ProcurePort today. ProcurePort is the internet’s premier place for everything procurement: from software and technology to knowledge and information, and everything in between.