IT Management: Vendor Management

Vendor management is one of the key skills in IT management. Vendor management comes into the picture because the time, money and energy used to nurture a positive vendor relationship cannot be measured directly against the company's bottom line.  However, a well-managed vendor relationship will result in increased customer satisfaction, reduced costs, better quality, and better service from the vendor.  When and if problems arise, rest assured that a well-managed vendor will be quick to remedy the situation.

Summary:

1.  Business benefits of good vendor management:

• Lower costs
• Increased flexibility and simplicity
• Better vendor communications
• More productive partnerships
• Reduced storage requirements
• Easier renegotiations

2.  Process of vendor management:

          a.       Engage

          b.      Investigate

          c.       Evaluate

          d.      Negotiate

          e.      Contract

          f.        Compliance

          g.       Renew

3.  Strategies to strengthen vendor relations:

• Share information and priorities
• Balance commitment and competition
• Allow key vendors to help you strategize
• Build partnerships for the long term
• Seek to understand your vendor's business too
• Negotiate to a Win-Win agreement
• Come together on value

4.  Vendor management best practices:

• Vendor selection
• Scrutinize the prospects
• Remain flexible monitor performance
• Communicate constantly

References:

1.  Business Management Case Study: How Cisco IT Improved Strategic Vendor Management
http://www.cisco.com/web/about/ciscoitatwork/business_of_it/vendor_management.html

2.  Vendor Management Success Tips
http://operationstech.about.com/od/vendormanagement/tp/VendMgtTips.htm

3.  Vendor Management Best Practices
http://operationstech.about.com/od/vendormanagement/tp/Vendor-Management-Best-Practic.htm