Vendor management is a skill that can be applied to nearly any kind of business in any kind of industry. Since it is so ubiquitous, there are a number of best practices that have emerged for you to use to manage the partners who sell you items that are key to your business. Following these best practices also ensures that an ongoing, positive relationship is maintained with the vendor, which can help you save money in the long run.
Vendor Management Panel
Ensure that your company maintains a vested interest in the vendor by creating a panel of the stakeholders who will be affected by the vendor selection. You can use the panel to obtain opinions and information about the vendor's current operating state, what's needed in the future and if there are any pain points that need to be addressed. Create the panel before the vendor is selected and maintain the panel for the length of the vendor's contract. Hold periodic meetings with the panel to make sure their feedback is constantly known.
Requirements and Service
The expectations that are set at the beginning of the vendor relationship will determine how you are treated as the relationship progresses. The Request for Proposal, or RFP, and the Service Level Agreement, or SLA, will respectively set the bare minimum requirements that the vendor must meet as well as support expectations for the life of the contractual relationship. These agreements and documents are never one-sided and should keep the interests of both parties in mind.
As the partnership with your vendor continues, perform periodic and regular performance appraisals for internal use. Use the panel of stakeholders that you put together to help come up with the performance appraisal's criteria and its score. These performance scores can be used in the future when the time arrives to begin the vendor selection process again for the same requirements or any new ones that might have been emerged.
Before entering into a contract with the vendor, review it thoroughly and obtain the help of a lawyer if you need to. Look at the granular pieces of the contract to ensure that it meets all of the requirements and expectations set in the RFP and SLA. It's also important to examine the contract's duration. While obtaining resources from the same vendor can be convenient, becoming too dependent on them for too many things can become dangerous, especially if the length of the contract is for a long period of time.