According to Gartner, Vendor management is a “discipline that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal lifecycle.” Vendor management should enable organizations to select vendors suited for their business requirements, develop vendor contracts, manage and control vendor performance, and build a sustainable relationship for the long-term efficient business operations.
With new technologies, business expansion and cost focus, the importance of vendor has increased dramatically in the past few years.
GRC helps in each progression of the vendor management lifecycle in an alternate manner. The assistance ranges from better visualization of information and reminders to complete automation.
Enterprise Risk Management has been gaining relevance in today’s time due to the dynamic nature of regulations and a competitive market environment. Risk management internal to the company is where the majority of companies are focusing on which special emphasis on optimizing internal controls and processes. However, the major party of enterprise risk management is vendor risk. Managing multiple vendors, suppliers and partners are now difficult. With shrinking margins always the concern for corporates, companies can only focus on optimizing its costs in which effective vendor management plays an important role.
Vendor management involves selecting suitable vendors, sourcing pricing information, collecting quality details, evaluating amongst different vendors and maintaining relationships with them. Vendor management is the process of minimizing the costs in procuring supplies, maintaining effectiveness and quality and avoiding possible vendor risks. A robust vendor management system can help in increasing productivity, add value to operations and drive long term growth of organizations.