Does your company view vendor management as just another back-office function administered by procurement and accounts payable? Is your company putting your organization’s supply chains at risk with unstable suppliers? Are you missing out on opportunities for more efficient supply chains by not taking a strategic view of vendor management? For many organizations, vendors are truly the building blocks of their business. A weak or deficient vendor base poses a significant risk to your supply chain, business continuity, and bottom line. If this is the case, there are many vendor management tools that you should begin implementing to improve all areas of your business.
These tools help your company identify, recruit, onboard, and manage vendors from a strategic viewpoint to ensure there are no disruptions in your supply chains that could threaten your business continuity or hurt financial performance.
Vendor Management Tools
The first tool to consider is the vendor onboarding portal. This cloud-hosted vendor portal tool helps you identify, recruit, onboard, and manage vendors in a secure, efficient, vendor self-service environment. A comprehensive vendor onboarding tool will allow you to collect and validate critical data, verify and enforce compliance for potential and existing vendors, and collect business and industry-specific information to assist you in making informed decisions about vendors you might onboard to be a part of your vendor community.
Once vendors are onboarded, these same tools help you to track and validate licenses, insurance, diversity certifications, and any other information that requires validation and compliance. These tools automatically track expirations and notify all identified stakeholders from the vendor and buying companies. These powerful business tools come with built-in document management capabilities as well as a workflow to route data and documents to other constituents, such as legal, risk management, AP, finance, merchandising, logistics, and others who may have a stake in the onboarding and ongoing vendor management process.
Transacting with Vendor Management Tools
Once you have a robust vendor onboarding tool in place and you can ensure compliance from your vendors and validate their critical data, you can now approach vendor management from a transaction perspective. Cloud-hosted vendor portals allow vendors 24/7 access to check on the status of payments, submit and track payment disputes, as well as submit requests for payment via web-based invoice submission. A vendor portal also provides a platform to build a supply chain finance initiative, like dynamic discounting or other strategic tools, to keep your vendor base healthy while providing a significant return on your company’s cash flow.
Another important tool is AP Automation. Through the use of workflow, data capture, document management, and other processing functions, a strong accounts payable automation solution is a key component of any comprehensive vendor management solution. Delays in vendor payments can damage your supply chains. This can also negatively impact financial performance via lost discounts and inefficient cash management.
Analysis with Vendor Management Tools
Now that you have onboarded your vendors, a very useful management tool to deploy is spend analysis. These tools provide insights into spending habits and allocation. This analysis allows you to identify trends and target rogue spending.
While there are many tools and solutions on the market that address the issues discussed above, beware of the “one size fits all” solution. These multi-tenant SaaS solutions often don’t have the functionality critical to your specific business process. Either that or they may require extensive, costly changes.
A single-tenant, highly configurable toolkit-based solution may offer you the most flexibility. Additionally, in a single-tenant, cloud-hosted model, you not only own the data, but you also have access to it 24/7, so you have the critical information you need when you need it to make informed business decisions!
Get Started
If you are interested in evaluating your vendor management to change your company’s perspective from a back-office function into a strategic part of your business, contact ICG to see how we can help. You can also request a free evaluation to see if there are areas to improve your enterprise vendor management.