Vendor Management Solution to Gain Transparency and Control Costs
05 Aug 2021
In an increasingly complex world, the need for flexibility continues to drive the demand for effective vendor management. It helps save time, money and additionally reduces the churn rate. Today progressive organizations are adopting efficient programs to take appropriate measures for cost control, potential risk reduction to improve service delivery and derive value in the long run.
To remain competitive, businesses need to invest in technology solutions such as a Vendor Management System (VMS) to achieve better management. While there is no one-size-fits-all approach, there is always a scope for developing custom software & solutions to manage vendors and contracts.
If you’re keen to first understand the concept and are then willing to invest and get a grip on your supplier & vendor-related initiatives, then this article is for you.
What is a Vendor Management System?
A web-based software application which helps businesses across industries to manage processes involved in the end-to-end vendor management, right from initial contact to final closure of a deal or even establishing strong business relationships.
Types of Vendor Management System
A cost-effective investment enables seamless management of vendor operations. Listed below are some of the capabilities served by vendor management solutions that organizations consider to direct and control the association with third-party suppliers.
Procurement
Helps manage due diligence processes while selecting vendors and purchasing services.
Performance Management
Regular evaluation of vendor performance to monitor and analyze the quality, performance, and reliability with dedicated scorecard parameters.
Vendor Onboarding
Supports enrolment, registration to get new vendors on board and managing access & permissions for them within the system.
Financial Controls & Compliance
Enables setting up spending limits and budgets for the vendor management team to reduce compliance and conformance risks related to vendors.
Vendor Risk Management
Identification and control of potential risks for vendors including intellectual property, information security and financial stability.
SLA Management
Outlines the level of service to expect from the vendor. It comprises penalties or remedies if the agreed-upon services aren’t met or delivered along with metrics to measure service performance.
Relationship Management
Deals with ensuring effective buyer-supplier relationships to enable a mutually beneficial goal and establish trust.
Contract Management
Managing the lifecycle of a contract, renewal period, amendment, obligations management and termination.
We at Rishabh Software utilize Microsoft’s powerful .NET framework, to help develop custom solutions to manage vendors more effectively across procurement, purchase, and risk modules. Further with cloud-based data management and automation of routine processes, the teams can focus on critical tasks, while giving business the flexibility and agility it needs to thrive in an ever-competitive economy.
Need Complete Efficiency Into Vendor Operations?
We can have the required proficiency to help you optimally manage vendor operations and streamline your processes.
Benefits of Vendor Management System
It is important to understand the benefits of a full-fledged system as you assess the needs of your organization to define and derive the right outcomes.
Here, we explore the five ways you can leverage this web-based system to reap maximum benefits.
Boost Efficiency and Reduce Process Lifecycles
With vendor management solutions, the organizations track and measure performance against relevant KPIs & SLAs. It helps check if vendors comply with specific requirements to ensure optimal performance.
Control Operational Costs
Helps identify areas to reduce operational costs. For instance, it can help effectively manage the vendor payment system and track discrepancies related to exaggerated pay rates and overtime.
Derive Measurable Outcomes with Advanced Reporting & Analytics
For the data collected and stored in a single repository, a VMS can help you derive the right insights. With advanced reporting capabilities, the businesses can pinpoint future contract management opportunities, identify potential inefficiencies and insufficiencies to source key goods and services. It even helps identify new markets, products, and other potential projects to further pursue the existing suppliers and newer approaches.
Uphold Corporate Compliance
A VMS system helps maintain information in a single system to seamlessly manage audit trails. Further, it notifies you with reminders like visa expirations, tenure notices and licensing course requirements.
Now that you are clear on the benefits of the vendor management system, it’s time to look at the features you may want to consider:
Vendor Management System Features
Wondering which system would be best for your organization? Based on your industry-specific requirements, you should look to create a custom solution. However, the below list highlights the top features that you must consider while designing a robust VMS:
- Requisition management
- Payroll and invoice management
- Reporting analytics and dashboards
- Time tracking and management
- Vendor information management
- Payment processing integration
Industry-focused Modules of Vendor Management System
Businesses have the tough task of managing multiple vendors, which is why you need a comprehensive solution that ensures end-to-end vendor management. One that is cost-effective and customized to your unique business needs.
Here are the core modules that make up an all-inclusive vendor management system:
Security Risk Evaluation
Enterprises are responsible to manage a vast network of vendors, right from administrative services to mission-critical operations. Since they have access to sensitive data, you must apply the same standards of regulations that you would for employees within your organization. For instance, manufacturing companies deal with various contingent workers which require business owners to manage & monitor vendors.
Essentials:
- Centralized control across every function & region
- End-to-end visibility through user-friendly dashboards & reports
- Automated workflows to ensure immediate action is taken
- Replicated tasks to reduce manual labor & document activity
Third-party Staffing Automation
Organizations across the board grapple with staffing issues like vacant positions and incomplete shifts. The managers would usually try to rectify these issues using inefficient & manual scheduling systems. In the healthcare industry, with the right vendor management software development, businesses can have end-to-end portal to automate everything from staff scheduling operations to billing reports.
Essentials:
- Centralized database for contact information
- Access to a large pool of supplemental healthcare professionals
- Consolidated timesheets
- Automated staff schedules
Purchase Order Management
The companies tend to waste way too much money and time to ensure get purchase orders processed. And often conventional paper-based purchase orders complicate the overall procurement process. Further, extraction of meaningful insights is practically impossible because of the paper-driven process that offers disparate data blocks. For an industry like retail, a purchase order management with well-established policies ensures that the business gets insights to reduce surplus inventory, purchase smarter and automate vendor interactions and make data-driven decisions, faster.
Essentials:
- Purchase order search & create
- Vendor Manager
- Contract Manager
- New product staging
Final Word
A vendor management system can help various industry leaders better connect with suppliers and business partners over a unified platform. It helps collaborate, shares information and openly communicate. This creates an ecosystem of trust where your external workforce is encouraged to deliver better results.
Why Choose Rishabh?
We offer professional support in custom developing and implementing a vendor management system for your business. Our specialists support you to achieve your management objectives of planning, selecting, configuring and installing the right technology.
For two decades, we are engaged in helping organizations with tech solutions to achieve better outcomes at an optimized cost. By partnering with a proficient custom enterprise software development company like us, you can ensure the smooth integration of vendor management capabilities that supports your organization’s objectives. It also allows them to streamline your business processes, transactions & relationships with a user-friendly solution.
Want to Implement Effective Vendor Management System?
We offer a tailored approach to create a custom system that helps your business get an edge.
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