The document provides an overview of vendor management (VM), detailing its purpose in controlling costs, mitigating vendor-related risks, and ensuring service quality. It discusses various aspects of VM including the types of vendors, objectives, benefits, challenges, and the vendor management process, culminating in strategies for effective communication with vendors. The document emphasizes the importance of establishing a structured relationship that benefits both the supplier and the buyer, and outlines the necessary skills for managing vendor relationships.

1. VENDOR MANAGEMENT –
AN OVERVIEW
NAME: JYOTI KUMARI
ADMISSION NO.: HPGD/OC17/2752
SPECIALIZATION: IT PROJECT MANAGEMENT
PRIN. L. N. WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT &
RESEARCH
YEAR OF SUBMISSION: SEPTEMBER 2019

2. AGENDA
• Introduction to Vendor Management (VM)
• LPG of Outsourcing
• Types of Vendors
• Objectives of VM
• Benefits of VM
• Challenges in VM
• Vendor Management Process
• VMO
• Skills and Competencies needed in VMO
• Formal Level of communication Between Customer and vendor
• Conclusion
• Bibliography

3. INTRODUCTION
TO VENDOR
MANAGEMENT
A Vendor (from French word vendre, meaning to sell)
is any person or company that sells goods or services
to someone else in the economic production chain.
Vendor management is the process that empowers an
organization to take appropriate measures for
controlling cost, reducing potential risks related to
vendors, ensuring excellent service deliverability and
deriving value from vendors in the long-run.
A Vendor Management System is an online web-
based tool that acts as a single node to manage all
vendor related activities in any organization or
business while ensuring improved efficiency and long-
term growth in a cost-effective manner.

4. LPG OF
OUTSOURCING
Outsourcing is the contracting
out of a business process to a
third-party or as we often call
it, to a Vendor.
The Logic, Perils and Gains
(LPG) of OUTSOURCING will
enable us to understand the
Need for Vendor Management
along with the points to
consider in the management
of vendors for the
Organizations
•Cost Reduction
•Focus on Core Competency
•Rather than try and make, buy what someone else
specializes in
•Optimum Utilization of Internal Resources
L
(Logic)
•Lack of Business Know-how
•Loss of control
•Subdued Employee morale
•Difficult to Exit
P
(Perils)
•Access to the latest and greatest in technology
•Cost savings
•High quality of staff
•Job security and burnout reduction for regular
employees
•Flexibility
G
(Gains)

5. TYPES OF VENDORS

6. OBJECTIVES OF VM
Avoid deal and
delivery failure
Ensure
sustainable
multisourcing
Driving the most
value from their
vendors
To meet business
objectives
Minimize potential
business disruption

7. BENEFITS OF VM
COST
OPTIMIZATION
• Financial
management
• TCO perspective
approach
QUALITY AND
PERFORMANCE
IMPROVEMENT
• Agility by setting
up KPIs
• Communication
flows
RISK
REDUCTION
•Meet compliance
requirements
•Business
continuity

8. CHALLENGES IN VM
Compliance and
Security
Reduce Cost
without Quality
Degradation
Vendor Reputation
Risk
Vendor Data
Storage
Vendor Payment
Risk

9. VENDOR MANAGEMENT PROCESS
Establishment of a
Vendor Management
Team
Evaluation and
Selection of Vendors
Developing Contracts
and Finalizing
Vendors
Implementation of
service or product
purchasing procedure
Ongoing operation
and problem
resolution
Performance
Monitoring and
reporting
End of Contract or
Renewal

10. VMO – VENDOR MANAGEMENT OFFICE
VENDOR MANAGEMENT OFFICE REMAINS A SPECIALIZED FUNCTION WHOSE PURPOSE IS TO
BRING MATURITY AND PROCESS DISCIPLINE TO THE MANY ASPECTS OF GOVERNING AND
MANAGING THE PERFORMANCE OF SERVICE PROVIDERS.
VMO Program
VMO Mission and Charter
Sourcing Strategy and Planning
VMO Processes and Governance Models
Relationship Initiation and
Establishment
Vendor Classification
Vendor Evaluation, Selection and On-boarding
Negotiation Guidelines and Processes
Contract Management
Standardized Commercial, Legal Terms and Conditions
Access and Manage Contract Risk
Dispute and Conflict Management
Continuous Improvement
Program
Performance Management
Vendor Development
Stakeholder Satisfaction Management

11. SKILLS AND COMPETENCIES NEEDED IN VMO
Technical IT
Knowledge
Skills in
Demand and
Supply
Management
General
Commercial Skills
with a sharp
perspective on
Legal and
Financial aspects
Project
Management

12. FORMAL LEVEL OF COMMUNICATION BETWEEN
CUSTOMER AND VENDOR

13. CONCLUSION
The process of vendor management entails the back and forth of a successful relationship so that both the
supplier and the buyer can benefit. The process should be structured so that it is a win-win for both sides.
• Convey your expectations clearly
• Ensure you set deadlines that are
achievable and realistic
• Collaborate with your vendors to
maintain long-term relationships
• Establish KPIs to measure Vendor
Performance
• Assess Vendor Risks to enable its
Minimization

14. BIBLIOGRAPHY
• Wikipedia
• https://www.slideshare.net/raminder90/outsourcing-and-vendor-management
• https://www.in.gov/idoa/2930.htm
• https://www.cisco.com/c/dam/en_us/about/ciscoitatwork/downloads/ciscoitatwork/pdf/
Cisco_IT_Case_Study_Vendor_Management_print.pdf
• www.gartner.com

15. THANK YOU