Why You Should Outsource Your Vendor Management
Many people ask us about the IT outsourcing industry; we all know that it is undergoing a fundamental change. As more and more IT service companies are looking to their industry partners for direction, it is important to note that business users are bypassing IT to procure their own technology services and products.
While vendor management is nothing new in our industry, outsourcing it is a fairly new concept. Today, vendor management is being asked to do more than ever before, including oversee new IT services, deal with troublesome supplies and meet ever-increasing performance goals—all of this with little or no increase in funding. Overseeing a number of providers can present a significant challenge, especially when it comes to cybersecurity risks and compliance requirements.
Because of all this, many companies are looking to outsource.
We all understand the importance of overseeing our vendor ecosystem, but today we’re paying it a bit more attention as we realize the critical governance oversight it provides us. Our systems are uniquely positioned to act as a bridge that connects all of our stakeholders.
We have traditionally managed our vendors ourselves, as we feel this gives us better control over our vendors—allowing us to keep a hand in what is going on. However, more established enterprises are seeing the benefits of third-party management, bringing these specialists in to manage the day-to-day oversight of their vendors. Vendor management specialists can help manage transactional activity, collect operational data and even come up with suggestions for improvement.
By outsourcing management of our vendors, we can reduce our costs, improve service delivery, and place our focus on internal resources to help us develop richer relationships and higher strategic value.
Benefits of Outsourcing
Bringing in a third-party is a viable and practical option for businesses. A successful partnership can help businesses elevate their vendor governance performance. Companies can expect both subjective and objective benefits.
The third party can help with transitioning, too. They will help provide vendor governance experience, vendor management techniques, lead practices that can be deployed, and even offer specific suggestions on how best to work with specific vendors.
By outsourcing, companies may find that they can increase their number of vendors or even spend comparatively fewer dollars per vendor. There may be an increase in the number of vendor performance metrics that align with desired business outcomes, due to the fact the third-party offers an increased level of managed services.
Often businesses see increased stakeholder satisfaction, which is often good for the bottom line.
Perhaps the most important benefit of outsourcing is the savings. With an outsourced service, vendor management activities are generally delivered by offshore resources, and staffing requirements, as they relate to vendors, are limited to relationship management; this can help decrease staffing costs. Over five years, this could save a business as much as 30 percent.
Outsourcing vendor management to a third party will also help standardize processes; and consistency helps enable the transparency essential to effective governance. This helps to alleviate flawed data, and costly mistakes.
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