A guide to vendor management

May 23, 20194 minute read

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Now that you understand how to select the right IT service provider for you, how can you make the most of that relationship and ensure that it stays on track?

Vendor management, particularly in a complex and dynamic IT environment, requires moving beyond traditional vendor relationships and establishing bonds that are personal, productive, cost-efficient, responsive, and measurable. This may take some upfront work, but it can pay dividends over time.

Communicate effectively

As in any relationship, open and consistent communication is the key to success. For a vendor to deliver the greatest value, they have to know exactly what you need. In a 2017 report on enterprise analytics conducted by Dun & Bradstreet and Forbes Insights, researchers determined that “Finding a key external partner that understands your business and technology ecosystems shortens response times and accelerates decision-making.”

Make sure that when you discuss a particular issue, expectation, or need, you are expressing it clearly and without jargon specific to your organization or team. An IT service provider won’t be able to understand all the nuances and quirks of your particular business from the outset, so try to remain patient and thorough during the introductory phase of your partnership. Vendors, like new employees, require an onboarding process. If something changes within your organization, don’t forget to let the vendor know if it will impact their service.

Try to stay well-informed and remember that you shouldn’t be afraid to ask questions. You’ll certainly want to educate yourself about what the vendor can provide, but if you need more information or are confused about something, ask.

It’s important to set reasonable goals and standards. If the vendor isn’t living up to your expectations, raise the issue with them politely yet firmly—avoid asking for the impossible. Be sure to take time to debrief and provide feedback where appropriate so the partnership can grow stronger over time.

Build trust; ensure security

Research from the Ponemon Institute found that 37 percent of IT pros believe their third-party vendors would not notify them if a data breach involving sensitive, confidential information occurred. Such a lack of trust is a major issue in vendor management, especially considering that massive hacks into the systems of Target, Home Depot, and Wendy’s, among others, have been linked to third-party service providers.

Trust is critical to building a lasting relationship and getting the most out of IT service providers. Part of effective vendor management is understanding that network security also involves third parties. With that in mind, your organization should look to include security requirements, protocols, and policies into its contracts. Determine from the outset who will control access, how often audits will occur, and what happens in the event of a breach. Regular security audits of vendors can be a great way to reduce risk through cooperation.

Managed services

With the rise of SaaS and the on-demand economy, there’s an expectation among businesses and customers that they will be able to utilize the services they need when they need them while saving on time and money by outsourcing certain tasks. This model tends to offer the advantage of cost efficiency and can lead to more fruitful relationships between vendors and clients.

Managed services are a valuable part of vendor management. For example, HP offers managed print and document services and Device as a Service, or DaaS, offerings. With managed print services, clients receive assessment, setup, reporting, and optimization assistance to improve decision-making and relieve IT’s workload so they can focus their energy on other responsibilities. With DaaS, HP helps clients optimize their IT assets by proactively identifying and mitigating issues, running analytics, and tailoring solutions to each client’s needs. Managed services of this kind can help organizations unlock the full potential of their vendors while sparing staff time that can be put toward business-critical tasks.

Measure your progress with vendors

Setting metrics, collecting data, and analyzing are key steps for IT pros looking to understand whether their vendor relationships are delivering the intended results. To that end, make sure your business and the vendor agree on what should be tracked and how. The Institute for Supply Management (ISM) has outlined five categories that should be measured and managed:

  • Spending visibility

  • Vendor segmentation

  • Collaboration

  • Vendor performance management

  • Risk management

For KPIs to be effective, make sure they are realistic and attainable, qualitative and quantitative, and reviewed regularly.

Without proper vendor management solutions, your third-party IT service providers can end up bogging down the IT staff that they should be assisting. But with the right partners and the right solutions to manage them, you can create relationships with vendors that will be successful in the long term.

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