Most businesses rely on 5-10 core technology vendors to keep business running smoothly. Any miscues in communication or coordination between vendors can result in downtime, wasted efforts and loss of productivity. This is a common occurrence among SMBs because the person managing vendors is usually juggling day-to-day operations and lacks the necessary time to proactively respond to changes and updates.
One of the greatest challenges associated with maintaining a smooth-running business network is organizing and managing the various vendors involved. The office manager, operations director or IT manager must have:
•A complex understanding regarding from the top-down of the business network to effectively manage this process
•Proper coordination of the inner-workings of your network as it pertains to your vendors
•Time to stay up-to-date with upcoming expirations and/or investigate cost-effective alternatives
Without these key elements in place, the results can prove to be problematic. The player in the process that truly stands to lose anything substantial in the short-term is your business. The ideal situation is to have a single point of contact or “one neck to choke.”
With one point of contact, the decision makers in your company can work more efficiently and not spend time putting out fires in areas they are not equipped to handle. Your point of contact must have specific knowledge pertaining to your business and how it leverages each vendor to make money. Whether the vendor is a website hosting company, Internet service provider (ISP), telecommunications supplier or software application vendor, the person managing your vendor relationships must fully understand how each of these pieces of the puzzle work together to create the proper working environment for your business.
The best candidate for this role is the IT Manager or your IT services provider. For the small to medium-sized businesses, having a full-time IT Manager is sometimes not a viable option. If you partner with an IT service provider for your day-to-day technology support, your service levels should include a true vendor management system as a core component. Rather than another vendor for you to manage, your service provider should take ownership of this responsibility and manage the vendors on your behalf.
Proper vendor management minimizes downtime, reduces accelerated costs and ensures proper service level agreements. Your employees can have more time to focus on the core business functions geared towards generating revenue. They will also avoid crises associated with attempting to support something they are underqualified to work on and that distracts them from their primary responsibilities within your business.
The bigger question: Can you really afford to not have vendor management in place?
JRoss, this is an excellent blog entry, and points out a challenge that all businesses face. Tell me more about how RSA has implemented a process to manage vendors.
Managing vendors is difficult. I find the best way to do it is to keep an inexpensive access database with all approved and unapproved for a reason vendors. Some vendors love and use constantly for what ever reason. Some vendors have poor standards, bad practices or some other issues that unless resolved, we simply cannot work with them. ( For example for my procurement management business, if a vendor can not ship to my different clients, I can not use him, we do not carry stock at all).
On my database I put alot of attributes, information on a company, what we have purchased, and any good or bad comments. It also helps me keep abreast of meetings and contact information which I move over to my outlook files. Having been on the vendor side of the transaction, I know to respect them, be honest, and be firm.
It makes for a more pleasant and profitable realtionship for them and me.
Those are excellent points Melissa. I can only assume that the role you play for your oganization (Business Owner?) allows you dedicate the necessary time needed to manage these nuances. That being said, you bring to light several of the intangible aspects of vendor management that often get overlooked. If you don’t consider these important aspects of this process you might find yourself in a jam.
Thank you for your contribution!