How you communicated with vendors and suppliers plays a huge role on the overall success of your business. As such, this process needs to be smooth, uninterrupted and able to lead to a good relationship between the two of you.
Unfortunately, miscommunication happens every day and it’s no different when it comes to your vendors. However, you can make this process better for both you and the vendor by using vendor management solutions.
What are Vendor Management Solutions and How to Choose the Best for Your Business?
Vendor management solutions (VMS) is a service or software that allows companies to better manage projects and communicate with their contractors. It serves three functions:
- Project management – helps with work coordination, tracking and assigning tasks.
- Payroll management – you’ll need to pay your vendors and contractors, naturally.
- Vendor communication – think of VMS as a hotline for communicating with vendors.
What VMS you are going to use depends on your needs, size and type of your business, type of vendors, contractors and a number of other things.
So how do you choose the right VMS? A simple Google search won’t be of much help here, unless you want to end up even more confused. Here are a few things you need to consider when choosing vendor management solutions:
- Is it easy to deploy and use?
Why have something that no one knows or can’t use? Having a VMS and not using it is pretty much the same as not having one. It just sits there.If you are going to use a VMS, be sure that your team leaders are not ignoring it and are really working with it.
Of course, it could be that the VMS in question simply requires too much training and additional equipment and is not really worth the effort as such. There’s a fine line to walk between making a few adjustments and completely having to overhaul your entire system for the sake of one vendor management solution.
- Are your vendors equipped to use it?
Communication is a two-way street, so ask yourself, can my vendors use this? If they can’t, that VMS will be useless and you will need to look elsewhere.
- Are your other systems compatible with it?
Vendor management solutions don’t work isolated from the rest of your business systems. There are plenty of things that you’ll need to integrate your VMS with, so be sure that you will be able to before you implement the VMS.
- Vendor qualification and onboarding
You probably already have an established vendor qualification and onboarding process. Consider how the new VMS will work with it. Will you have to make any significant changes to this or can you basically “plug-and-play” it?
- Does it comply with local regulations?
You also need to consider if the VMS adheres to the local regulations and industry standards. Specific industries will have their own requirements when it comes to vendor management solutions, so be sure you can step up.
- How secure is it?
Hackers can get access, steal or destroy your vendor data just because you were careless and were using an unsecure VMS. Don’t be the fool that thinks this won’t happen to him. Play it safe and look for the VMS with the best possible security for the sake of your business, vendors and your mental health.
Communication with vendors is what leads to a good and long business partnership and you can ensure this with the help of a good VMS.
Let me know if you have any questions about vendor management solutions in the comments below and don’t forget to sign up for a free Purchase Order Plus trial.