The key to better vendor relationships is a vendor management system. This article explains how you can get the most out of it.

1. An Actionable Roadmap to
Stronger Vendor
Relationships
“Companies that fail to invest in vendor relationship management to
analyze risks and prevent failures in the first place lose sales,
revenue, and market value.”
J.M. Smuckers’ Brand failed to invest in vendor management,
effective risk assessment, and proper vendor diligence. The result
was a failed product and customers’ trust, which caused them a loss
of $400 million in the market value.
Why do you think it happened? Because of the failed vendor
management process. We often think collaboration, knowing
vendors, and strengthening relationships do not affect the business
whatsoever. However, it helps to know more about vendors and
ensure they deliver quality products and mitigate risks.
sales@crmjetty.com

2. Vendor management is crucial, but all vendors are not the same.
They may have different requirements and might follow diverse
processes. Hence, traditional vendor relationship management
practices won’t be effective. To strengthen vendor relationships, you
need to implement a modern and technology-oriented approach.
You need to devise a strategy for managing vendors by considering
everything buyers and sellers, products and services, and more.
This article takes you through the aspects you need to consider on
the road to better vendor management. It explains the vendor
management process, modern approaches, and tools to improve
vendor relationships and provide better long-term opportunities.
● What is Multi-Vendor Management?
● Why Vendor Management is Essential?
● Stages of Vendor Management Process
● Implementing Strategies to Strengthen Vendor Relationships
● Vendor Relationship Management with Portal – How?
● Role of CRMJetty
What is Multi-Vendor Management?
Multi-vendor management is exactly what it sounds like, managing
multiple vendors – from selecting the right vendors to outsourcing,
gauging quality, evaluating performance, and ensuring on-time
payments. When done effectively, it improves communication,
streamlines processes, enhances collaboration, and strengthens
relationships with vendors on an individual level.
Nowadays, it’s done using vendor management tools and
technologies such as a vendor management portal, which automates
processes and streamlines operations with a centralized interface.
Note: Often, businesses misinterpret vendors and suppliers. They use
it interchangeably. But vendors are those who supply goods and
services to customers, whereas suppliers supply to businesses.
sales@crmjetty.com

3. Suppliers are the first link in the supply chain, while vendors are the
last in the chain. So, while looking for a vendor management portal,
make what you require clear.
Learn More about the Supplier Management Portal
Why Vendor Management is Essential?
Businesses like yours can maximize their value from outsourcing
capabilities by improving vendor relationships. Vendor management
bolsters businesses that work on strategic alliances.
Traditionally, businesses didn’t have much knowledge about vendors.
It was all business. Plus, they didn’t have the resources to manage
multiple vendors simultaneously. They tracked the records through
Excel and handled operations and transactions manually. There
wasn’t a way to identify the risks and the challenges in the process,
including suitable vendors. Take the example of Morgan Stanley,
whose poor vendor management exposed sensitive customer data,
costing them $60 million.
sales@crmjetty.com

4. Vendor management provides a unified interface where businesses
can manage all their vendors systematically. Here are the challenges
that businesses face and how vendor management helps.
i. Risk Assessment
Businesses fail to understand that selecting suitable vendors is
crucial. This is because there’s a high risk involved with some
vendors that have access to sensitive information or impact
customers on the whole. Take Morgan Stanley and J.M. Smuckers
from above. They missed evaluating the vendor and the risk involved
with it. The cost is customers’ credibility, decreased market value,
lawsuits, and millions of dollars.
Hence, assessing their profile and identifying if they are suitable for
the business. Vendor management covers risk management that
helps businesses evaluate and monitor vendors’ performance. It
helps them set standards for vendors for easy filtration and sort
those who are not performing as per the mark.
ii. Due Diligence
Not every vendor may deliver quality or compliance with the
regulatory laws and policies. While some may perform well, others
may use unethical practices. What does that condone for your
business if they employ children for work? It impacts your reputation
and may result in losing customers’ goodwill and customers.
It is essential to conduct a background check covering their previous
employment, financial status, market value, legal and regulations
knowledge, operational methods, and risk involved. A vendor
management system provides an automated filtering option that
removes vendors who don’t match the defined parameters, freeing
your team to focus on priority tasks.
iii. Outdated Information and Data Storage
sales@crmjetty.com

5. Another challenge organizations face with legacy systems is having
inaccurate or outdated data. The process that vendors refer to might
not be up-to-date. Besides, as businesses expand, data storage is
crucial. Storing vendors’ information in Excel may result in data loss
or tampering.
A vendor management portal provides data storage where you and
other organizations like yours can store their vendors’ information –
profile, inventory, transactions. It can access that information easily
without switching between platforms. The vendors can manage their
profiles themselves, which auto-syncs with the CRM, helping
organizations stay updated.
Updated information entitles organizations to manage their
procurement and vendors effectively.
iv. Lack of Visibility
Without a proper management system in place, businesses don’t
have proper visibility of the vendors and their performance. They
don’t have any measures to track their work, which ultimately affects
their business in terms of poor decision-making.
A vendor management system provides a centralized system that
helps track vendors’ performance and analyze the end results. It
improves visibility, offers transparency, and aids in better allocation
of resources.
I need a Vendor Management Portal. Let’s Discuss
Stages of Vendor Management Process
sales@crmjetty.com

6. A smooth vendor management process is driven by company goals,
KPIs, collaboration, and continuous improvement. To accomplish
this, you have to describe the process you would follow, which must
be effective.
Every business has its way of managing vendors and getting results.
Here’s the standard process that you can follow to align with your
vendors.
i. Set Goals and Priorities
Set your goal based on the challenges you’re facing. Start by defining
your KPIs and organizational requirements. It can be related to data
storage or performance review. Define your priorities, whether it’s
enhancing customer experience at present or increasing sales.
With all the KPIs and requirements in hand, send out proposals with
your requirements and decide whether the set indicators and the
received requests align with your business requirements. This will
help you understand vendors’ involvement and measure their
performance in later stages.
sales@crmjetty.com

7. ii. Create a Vendor Management Team
Assign the tasks of managing vendors to a selected few within the
organization. Employ them to define KPIs, select relevant vendors,
negotiate the contracts, assess risks and vendors’ performance,
manage transactions, and track the activities.
Ensure that they are skilled enough to manage vendor relationships
because they serve as liaisons between vendors and other business
departments like human resources. They channel the needs and
demands of the vendor.
iii. Identify, Choose and Organize the Vendors
On receiving proposals, evaluate the applications and filter them as
per the nature of service and the desired goals. For example, you may
need experienced vendors from a specific area or someone who has
a better offering. Define criteria and classify the vendors based on
criticality, essentiality, and nature of services. Classification helps
you evaluate their profile and negotiations individually and decide if
they are the right fit for your business. It gives a sense of their
importance to overall company goals.
With classification, also assess the risk because critical and high-risk
vendors can impact your business in case of vendor relationships or
business failure. Ask these questions while selecting and organizing
vendors:
● Are the business offerings and contract expiry as per my
requirements?
● Does the vendor have to make any financial transactions on
behalf of the organization?
● Does the vendor require access to sensitive data to accomplish
specific tasks?
● Does the vendor comply with the legal requirements?
sales@crmjetty.com

8. ● Is the vendor’s offering unique and challenging to find an
alternative for?
If the answer is yes to most questions, that’s a high-risk vendor.
Choose wisely!
Tip: Set indicators for high, moderate, and low-risk vendors.
iv. Conduct Due Diligence
Once you have identified vendors, you know the documents and
information required to assess their potential and proceed further
with the negotiation. Make sure you, i.e., the vendor management
team, ask for all the information, such as financial statements,
previous work history, security measures, work methodology,
compliances, rules and regulations they follow, etc., especially from
the high-risk vendors. It will clarify whether the vendor is
trustworthy and capable enough for your business.
v. Negotiate Contracts
After selecting the vendors, it’s time to sit with them and discuss the
contract. Know about their offerings and see what you can offer
them. Discuss the terms and conditions of the contract. Follow
standard policies and procedures for negotiation and outline the
roles and responsibilities of vendors. Address confidentiality,
disruptions, compliance, rules and regulations, financial aspects,
business continuity, security, frequency of reports, contract updates,
etc.
Clearly state the consequences of breach of confidentiality. Establish
a secure mail address for both parties.
vi. Manage and Monitor KPIs
Constant monitoring is essential to get clarity of vendors’ operations,
vulnerabilities, and other risks that could affect the business. Hence,
after partnering with vendors, start monitoring their performance.
sales@crmjetty.com

9. Track their activities, assess the risk, identify the loopholes, and
whether they comply with the rules and regulations.
Implementing Strategies to Strengthen Vendor Relationships
Most businesses think that selecting vendors is enough to get value
in their industry. The end result of vendor management is to build
vendor relationships that strengthen businesses and provide a
competitive edge, which requires proper strategy with tools and
techniques to build long-lasting relationships.
You can build value, reduce risk, and improve vendors’ performance
with a few best practices. Let’s see what those are:
i. Share Information and Priorities
The key to better vendor performance is to share crucial information
with them. That doesn’t mean sharing the entire database with them.
Vendor management practices share only the correct information
with vendors at the right time to serve your needs better. It may
sales@crmjetty.com

10. include forecast information, product launches, design, expansion, or
relocation changes.
ii. Involve Key Vendors in Strategizing
If vendors supply key services to your business, involve them in
strategy meetings on the products/services they are working on.
Know that you involve them because they are experts in their field
and could help make products and services better.
iii. Prioritize Proactivity, Communication, and Collaboration
One of the important characteristics of vendor relationships
management is to rehabilitate rather than replace vendors who help
businesses reach their goal of sustainable procurement. A
collaborative approach with streamlined communication and
proactive support not only bridges the gap between vendors and
businesses but also streamlines and optimizes the processes. It helps
brainstorm ideas and identify how businesses can create maximum
value from their partnerships.
iv. Set the Stage for Digital Technologies
Eliminating waste, minimizing risks, and cutting costs are the initial
stages of vendor management. By investing in digital tools like a
vendor portal, you can turn your vendors into partners who share
your goals and success.
A vendor portal provides central management of vendors’ profiles,
invoices, activities, sales figures, performance, etc. You can capture,
analyze, and review vendors’ performance in real-time. Besides, you
can automate several aspects of your vendor management process
like vendor onboarding, automated proposals, notifications,
document sharing like certificates, affidavits, compliance policies,
and more.
sales@crmjetty.com

11. Investing in tools like vendor portal gives you access to automation
and data management that helps you track your vendors’
performance and aligns vendors’ and internal stakeholders’ activities
with your business goals.
Vendor Relationship Management with Portal – How?
A vendor portal provides features that help you reduce your staff’s
workload while empowering your vendors to manage their activities
themselves.
It drives efficiency with features like:
i. Online Registrations
Invite vendors and suppliers to be a part of your global network
without hassle.
ii. Auto-filtering of Applications
Get rid of the manual filtration by providing functionality that
automatically filters applicants based on the set criteria.
iii. Quotes and Proposals Management
Allow different vendors to share their proposals and requests via a
secure login without you having to ask for it.
iv. Vendor Comparison
Evaluate the vendors automatically based on their previous
experience, contracts, and overall work history.
v. Automated Ranking
Rate vendors’ profiles by defining certain indexes based on history,
compliance, delivery time, performance, risk, etc.
vi. Invoicing and Payments
sales@crmjetty.com

12. Generate and share invoices and purchase orders directly from and
through the portal.
vii. Role-based CRM Access
Let vendors view relevant information in the CRM based on
role-specific access.
viii. Mobile Responsiveness
Allow vendors and other stakeholders to work from anywhere via a
mobile phone.
Role of CRMJetty in Vendors Management
We can help you develop a vendor management portal to ensure
your vendors deliver maximum value to your organization. From
self-service to automated workflow and additional features, we can
develop a custom solution that consistently delivers efficiency,
visibility, and vendor satisfaction.
Vendor relationship management is about balancing the human side
of the business with the convenience that technology offers. We
understand this and ensure that the portal provides the best of both.
Tell Me, How You Can Help Me?
Source:
https:/
/www.crmjetty.com/blog/an-actionable-roadmap-to-stron
ger-vendor-relationships/
sales@crmjetty.com