Aug 04, 2021
By Kate Camerlin

The Importance of Better Vendor Management

Companies that manage all their third-party vendors using robust tools and processes have a competitive advantage over those that don’t. They have clearer insights into SLAs, performance data, and more.

If you’re using separate spreadsheets or point systems that don’t connect to other business applications, these processes can be difficult to establish. This becomes especially true as studies have shown the number of vendors that organizations are working with is only increasing. In a poll of just IT staff alone, 47% said their company works with more than 10 vendors, and 57% say their departments spend more time managing vendor relationships than they did two years ago.

It’s worth investing in the right tools to manage these vendor relationships. In fact, internal case studies run by Nuvolo have found a 2-5% reduction in vendor spend based on improved performance monitoring. Integrated vendor management tools give teams clearer insight into both day-to-day performance and long-term trends, so they can make more informed decisions about the contractors they’re working with.

So, what should you look for in a vendor management system? The bottom line is to find a cloud-based solution that integrates with your other business processes and enables you to have full visibility into contracts and performance. The following article dives into some of the details behind this—with a focus on field service and technician vendor management. It outlines several key benefits and describes the features to keep in mind.

3 Key Benefits of Improving Your Vendor Management System

1. Easily Monitor SLAs and Create Dashboards and Reports

One important facet of vendor management software is the ability to track contracts and SLAs. This gives you better insight into how teams are performing against expectations. When all contract information is included in one platform, you can easily find and reference the details, making it easier to evaluate vendor work in real time.

Having a clearer view into how contractors and vendors are performing against established metrics helps manage expectations and keeps everyone on the same page. Plus, when all contracts are tracked and managed in one place, you can set renewal timelines and have relevant data at your fingertips.

This is especially important when working with multiple vendors. One Deloitte study highlights this challenge, noting that companies are often limited by an inadequate view of vendor performance due to lack of monitoring mechanisms. The report notes that it is important to be able to identify and communicate vendor-related issues early in the relationship.

Software solutions that track performance and SLA-related data in one place enable you to create reports and visualizations that provide key insights much more easily. Dashboards provide real-time information on which vendors are performing well, or which continually breach service agreements.

This saves you time and gives you much clearer ROI insights when pulling data for contract discussions and justification analyses—making future vendor negotiations simpler. You’ll have performance reports on hand and can negotiate from a more informed position.

2. User-Friendly Portal

Another aspect of vendor management software is the user experience—the more streamlined you can make the process or tool, the more it’ll be used by your teams. Some tools offer a self-service portal or role-based access so vendors see only information relevant to their work.

For technicians and field service management, it is vital that the platform be mobile-friendly, so teams can update details on the assets or equipment they’re working on in real time. That gives you a more accurate record of work history on your equipment, and it eliminates manual or duplicated data entry. Plus, this means vendors can complete assigned work orders, submit invoices, and track their performance within the same platform on their mobile devices.

It’s also fairly common for vendors to work with other parties; in these scenarios, vendor management software can help streamline this process. For example, vendors could enable subcontractor access to the portal, consolidating all work into a single location, whether it’s accomplished by the vendor or the vendor’s vendor.

3. Preventative and Corrective Maintenance

When your vendor management tools connect to the same solution that you use to track all information about your assets, your contractors can instantly access the complete work order history of those assets. Plus, they have access to any other informational materials associated with that equipment in the platform, including service manuals, knowledge bases, spare parts inventory, and training videos. This makes it much easier to perform corrective and preventative maintenance.

Software solutions can also enable smart dispatching by creating rules that automate work orders. For example, work orders can be auto routed based on details such as location, certifications, vendor preference.

In addition, your vendors can be assigned checklists when inspecting assets—such as during safety equipment evaluations.  And if your vendor management tool is integrated with your asset management processes, your vendors can submit corrective work orders in real time.

In this way, using software solutions to create an organized corrective and preventive program with your vendors keeps your operations streamlined and efficient. It can reduce and prevent downtime on your critical assets and equipment and lead to significant return on investment.

The Importance of Integrating with Other Business Applications

Ultimately, it is critical that your vendor management system is not just a separate point solution, but that it connects to other business processes and applications. That way, your vendors have access to critical information and workflows that enable them to complete their work more efficiently (such as accessing the work history of the assets they’re maintaining). You have a better picture into the performance of all of your vendors alongside other key business data. This enables you to make more informed data-driven decisions.

Plus, when you have a more collaborative, transparent, and integrated vendor management solution in place, your vendors become trusted partners and collaborators.

The Nuvolo Connected Workplace offers this integration. It is built natively on ServiceNow, meaning it integrates with enterprise-level applications across IT, HR, and more.

 The Connected Workplace vendor management functionality offers:

  • Executive-level reporting and analytics that you can create and edit yourself
  • Easily configurable workflows so our solution adapts to your process
  • Integration with Connected Workplace solutions for Maintenance, Space, Projects, Real Estate, and Sustainability

Interested in learning more? Read about vendor management in the Connected Workplace.