Vendor Management and Finance teams in nearly every industry are wrestling with many challenges because of the COVID-19 pandemic. They face health and safety concerns, significant threats to cash and liquidity, vendor and supply chain disruption, and the large-scale shift to remote working. So, what are some of the biggest challenges CFO’s and Vendor Management Teams face?
COVID-19 has presented a major financial and operational shock to organizations. Large, well-capitalized businesses with extensive resources and robust business recovery plans appear to be holding up well. Life is more challenging for small to mid-sized businesses (SMB), however, especially if they are undercapitalized and under-resourced.
The shift to remote working has tested the operational resilience of many businesses, especially those that historically had a face-to-face culture. While some organizations had already enabled remote working before COVID-19 struck, others have had to embark on a major scramble for laptops and mobile phones, often ignoring the contractual relationships that already existed.
In some instances, the lack of an online document management platform required staff to visit the office — at least some of the time — to access critical information and systems.
Health and safety is a top priority in factories, laboratories, and other workplaces where people work alongside one another. Deep cleaning practices have been adopted, and shift patterns have been altered. Nevertheless, it can be difficult for organizations to secure the personal protective equipment needed for staff to work safely. Existing contracts may be able to leverage their position, to prioritize their needs.
A further challenge to operational excellence has been posed by disrupted supply chains, with some companies struggling to secure key components from overseas suppliers. Organizations that have maintained a comprehensive VMS document database of alternative vendors as part of their vendor management lifecycle management process are benefiting from the insights they gained when building out the system.
Organizations are planning for recovery by undertaking cash modelling and scenario planning around what different versions of the future might look like, especially when it comes to vendor management. Companies will look to balance cost with resilience when choosing vendors. Manufacturing companies that struggled to source the parts they needed in the crisis are likely to source from nearer home where possible. Strategic vendor relationships, with preferential terms will become critically important to building for the future.
COVID-19will continue to present a wide range of challenges to organizations. These challenges differ significantly between industries, business models, income streams, and levels of cash reserves. Some organizations will find that they have proved their resilience in this crisis while others are still struggling to adapt. The one thing that all organizations have in common is the desire to take advantage of the recovery when it comes. A fully managed VMS can help navigate the current challenges, and position a company to be ready from both a process and financial point of view, as that recovery becomes apparent.
About Limitless Technology
Limitless Technology, LLC has been managing complex indirect spend and vendor documentation since 2006 for some of the largest companies in the USA saving them millions in costs.
Through our Billing Optimization and Vendor Management Solutions proprietary platforms we utilize technology, processes, expertise, time, and resources to improve our client’s bottom-line.
Limitless Technology manages your vendors, so you can manage and grow your business.
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