Vendor Management Best Practices

Vendor management practices play a critical role in the success of any organization. The most successful vendor management practices will preserve and uphold vendor relationships while protecting the company from any potential harm. Michelle Price, Business Operations Manager for Cisco Systems, weighed in on what is driving her current vendor management practices. She said, “We have a 360 degree relationship with our preferred vendors. They are more partners than vendors. We do our best to maintain it to the best of our ability.”

Vendor management can be a delicate process. Maintaining the balance between having positive partnerships with your vendors and making sure your business’ best interest is being put first sometimes necessitates that concessions be made. Price said, “Since our relationship with preferred vendors is 360 degrees, sometimes we have to walk a fine line with negotiating or responding to competitive quotes. Sometimes, it may not be in the best interest of the bottom line, but it is to maintain the relationship.” In the long run, maintaining the best relationship with a preferred vendor can be more important than saving a few dollars because, as Price said, an unexpected positive outcome from her vendor management practice was the relationship she has with her vendors. “It truly does become a partnership and about how we can help each other.”

Even with the best relationships, vendor management is not without its challenges. “In years past,” Price said, “customer service seemed much easier to get. But as years go on and vendors try to automate more of their functions and remove the human support, it affects how we do business with them. It seems like more pressure on the customer in some ways.” However, Price said it can be helpful to have a good understanding of how vendors work because “sometimes you don’t understand the internal struggles they go through to get things done.”

During the pandemic, some of those struggles became more apparent. “You got to see how discombobulated some were with all the ‘red tape’ they needed to go through to get anything done,” said Price. The trials of the pandemic also brought out some of the best in vendors. “There was so much change happening so quickly,” Price said. “We really relied on our vendors move as fast as they could in order to enable our business to keep functioning as normal. Most of the time we really got to see how fast they can do things in situations like this.”

Vendor management best practices can vary depending on the relationships you have with your vendors, but the most important aspects to focus on are keeping your company’s best interest in mind while nurturing the partnerships you have with your vendors. If these best practices are followed, your vendor relationship journey should be a smooth one.