“Vendor management consulting is the provision of services that help an organisation define their approach to managing third party relationships and contracts to ensure they are receiving the services they entered into the contract for, and that these services are being delivered to the correct standards and timeframes.”
Generally, vendor management consulting guides customers through four key focus areas:
- Supplier Data: Ensuring all key contractual milestones, obligations, critical dates and contacts are fully understood, calendarised and appropriately documented
- Supplier Classification: Assessment of the impact and operational reliance of the customers business to services from their suppliers which will classify the supply landscape into a tiered structure against which the governance framework and control measures will be defined.
- Governance Framework: A framework is constructed against the tiered classification structure defining the governance protocols, control measures and actions to be applied against each supplier in each tier. This ranges from an individual supplier management strategy, on-boarding processes, due diligence findings and updates, review councils, performance attainment, financial management, compliance to customer policies, standards and relevant legislation, any associated security risks, renewal strategy and preparation, and exit strategies.
- Vendor Management Library: A central repository where copies of all contracts, performance reports, obligation trackers, contract calendars, review meeting agenda, supporting pack and minutes, risk registers, contact details and supplier annual results are stored not only for reference, but to serve as an audit trail to track attainment to the defined governance framework.
Successful vendor management, and the associated contract management disciplines, will see the supplier relationship mature and become more of partner with shared risk across both parties and innovation driving improvement to services and operating practises.
Vendor Relationship Management
The core underlying foundation of successful vendor management is attributed to the way the relationship with a supplier, whether part of wider supply chain, an outsource vendor, managed service provider, is governed and managed. The vendor management function is often seen as the conduit, or even mediator, between suppliers and internal resources with regards to extracting the best value from the contracts in place for both parties, ensuring the customer’s requirements are reasonable and inline with the contract whilst also ensuring the supplier discharges the obligations they signed up to as part of the agreement.
The relationship should be run on the basis of no surprises. If for example, performance is not optimum the vendor management team should open discussions with the vendor and internal resource to understand the issues and find a way to address them rather than the supplier be ambushed in an executive review meeting or served with unexpected penalty notices.
The most mature vendor relationships will see both the customer and supplier jointly working on joint innovation programs to improve and optimise services.
Expert vendor Management Consultants
Peru consultants are vendor management experts. They bring a wealth of knowledge and operational experience as to how to get the best from your commercial arrangements and build strong relationships with your third-party partners. Leveraging this market knowledge and approach through our vendor management consulting services will not only ensure you secure maximum return on your investment, but also allow you and your team to focus on your core business activities.
What are the benefits of a vendor management outsourcing?
Our expert consultants have shown that organisations with a successful vendor management function can leverage the following benefits
- Reduced 3rd party spend
- Increased efficiency
- Consolidated efficient supplier portfolio
- Risk assessed supply chain
- Assured delivery from partners
- Continual improvement of operations
- A mature risk management process
- A collaborative working partnership with 3rd party parties
- Assess the benefits of software tools to support the vendor management processes. For Example, Enterprise Vendor Management | Brooklyn Vendor Assurance (brooklynva.com)
Core to Vendor Management is ensuring you understand and have a robust risk management process surrounding the services provided by, or reliant upon third parties. A supplier is engaged to deliver specific outcomes and it is the role of vendor management to help the business understand the risks to the organisation, how to mitigate these risks and address them should they arise.
Gone are the days of banging the boardroom table for customers to get what they want from suppliers. This does not mean customers have any less influence, but today this is led through pro-active, collaborative relationships where there are clear benefits for all involved. There might be disputes and performance issues to resolve but pro-actively managing these through early identification of issues as they arise, rather than when they are escalated, and openly discussing the cause and impact with your supplier will lead to an earlier resolution (and better relationships). Peru’s expertise in this field is proven and demonstrable with clients in banking, retail, logistics and manufacturing. Our vendor relationship management is core to our supplier management service offering.
Limited internal resources
Vendor management is often de-prioritised against other core business activities and with this de-prioritisation of internal resource activities comes value leakage. Using Peru’s services to govern and leverage best from your third-party agreements puts you on the front foot in managing these relationships and being fully prepared to manage your suppliers rather than you being managed.
Why Peru Consulting for Vendor Management Consulting?
Peru practitioners are vendor management experts and specialise in helping our clients from all sectors and industries successfully manage, leverage value and pro-actively govern their third-party arrangements. Our people reflect our values, and we guarantee a collaborative, quality, agile and trusted service. We only hire experts in their fields; sector focused, customer led and technology agnostic. As Peruvians we differentiate ourselves through our “Triple A” consulting principles: Accelerate – Identify and deliver value early, Assure – the right things and provide certainty and Augment – be a part of the team and hit the ground running. The value we bring is through our market insight, our accelerator tools, our commercial focus and our flexibility.