No business should have to feel they are “on the watch” for changes in their contracts and agreements.  This includes those special “1-year promos” that are deigned to take advantage of companies who get complacent and don’t audit their billing. So instead, the price rolls to the current market retail prices which is usually DOUBLE the promo rate!  Now the service provider should INFORM their customer more clearly of any changes going into effect, clearly state them and offer cost saving OPTIONS?Well, I think we can agree that this is is NEVER going to happen!

Example from frustrated Corporation Manager:

“They didn’t put us on any plan after the expiration, but after I contacted them they supposedly put us back on it and told me to only pay what we were paying prior. It was a big fiasco and has been. I was not under the impression it was only a year thing, but I will contact them and my director to see how they want to proceed if we want to stay or go with another company.”

“I did speak with them and it has taken 5 phone calls over the course of 6 months several disconnection notices that they claimed to me they were going to adjust our account. Again just the other day we received another disconnect notice and I called them on Friday and apparently they only issued us an adjustment from December forward for some reason not November when it had started, and they are saying whatever the promotion was parts are not available.” – P.C. Orinda, CA

Let’s be very clear about this:  This treatment is “vendor abuse”. Service providers have had the ability for MANY YEARS to take advantage of their Clients, and most often do. Unfortunately, that means the business has only 2 options:

1. They can have an internal staff spend hours trying to keep up with the renewals, inventory, billing changes, audits, inspections, expired warranties, agreement promos, 3rd party charges and all the other aspects of contracting with vendors.
2. They can entrust these services to a company that provides a fully managed vendor and supplier service which includes; proprietary software, monthly bill auditing, proactive contract management, document management, compliance notifications, increased efficiency, and maximized profits.

 The choice seems pretty darn simple, doesn’t it?

Imagine all the hours FREED up from resources not having to deal with the frustration of vendor management. Having an EXPERT auditor, contract negotiator and accounts manager creating your unique profile including analytics and visibility into all spend. Having the ability to access all documents, contracts, bills, renewals, compliances, and warranties from ONE CENTRAL LOCATION – 24/7.  That is right, even while key vendor management resources are on vacation or away from the office for any reason,  when an important contact, bill or document is needed it is easily accessible by anyone with credentials.

We understand and respect the services the efforts that internal vendor management resources provide.  But sometimes, they simply cannot dive deep into every bill or invoice and provide the most optimized approach to improving your bottom line.  Sometimes, the only way to do that is by working with cost reduction specialists who do it every single day.

But not every vendor relationship is created equal. A true, risk-based approach requires organizations to first segment their vendors based on pre-determined criteria, and then establish an appropriate level of ongoing due diligence and oversight activities based on the assigned level of risk. And while the specific activities may vary across organizations, there are three types of risk you want to be sure to address.

• Operational Risks
• Financial Risks
• Regulatory Compliance Risk

OPERATIONAL RISKS

Operational risk is the risk that your organization will experience a major failure, shutdown, or unexpected disruption of some segment of your business if a vendor’s processes, people, or systems fail. The operational risk goes hand in hand with your reliance on a vendor and is typically higher with vendors that provide services such as outsourcing, IT systems, and data.

There are two good ways to take a proactive approach and mitigate operational risk: perform periodic on-site and/or due diligence reviews and create a contingency plan should you experience a failure with a risky vendor. These two risk-mitigation activities go hand-in-hand, especially for mission-critical vendors. Monitoring daily performances that don’t meet the standards required is also a good indication that in a time of risk there is a higher risk of disruption or failure.

FINANCIAL RISK

Financial risk is the risk that your organization is negatively impacted financially due to a vendor relationship. This can come in two forms: excessive costs and lost revenue.

Poor Vendor Service due to Finances

Many supplier performance issues are related to finances.

Deliveries were late, and shortages were piling up with no relief in sight. The primary supplier was actively blaming the secondary supplier for the bottleneck, claiming that their supplier was behind in their coating process. They began casting aspersions on the supplier’s lack of process control, communication and even hinted at ethical issues.

While the protocol was for the primary supplier to manage all downstream relationships, this problem had escalated high enough that it was time to call the supplier directly to get to the bottom of the issue and develop a get-well plan.

Negotiating and Enforcing Contract Compliance

Organizations understand the importance of managing competitive solicitations and negotiating good pricing. But negotiating a good price has little to do with managing costs, which comes from enforcing contract compliance, effectively managing the procure-to-pay cycle, and performing periodic cost and contractual audits. It’s the work done after the vendor contract is negotiated that mitigates the risk of excessive costs.

The other financial risk relates to the reliance on vendors who support your revenue-producing activities. Examples include fundraising companies, outsourced service providers, and fulfillment centers, to name a few.

It may also include vendors whose technologies you use to process financial transactions. Problems with these vendors may delay access to revenue or, in the worst cases, result in lost revenue for your organization.

It’s important to identify and segment these types of vendors to design the most appropriate diligence and oversight activities and to also integrate with your vendor management operational risk planning as it relates to contingencies.

Regulatory Compliance Risk 

This has become a HOT TOPIC in many industries. Nonprofit organizations like health plans, healthcare systems, and credit unions, along with those that receive Federal grants, are heavily regulated by Federal agencies. And in many cases, certain regulations pass through to third-party vendors.

Regulatory compliance risk is the risk that a third-party vendor will violate a law or regulation that your organization has placed on them as a requirement for doing business with you.

Ensure your risk management activities enable you to evaluate how well your vendors are complying with the appropriate laws and regulations.

Even though a supplier may be remarkably reliable, the fact that their component or ingredient is essential to your finished product makes them high-risk. Partnering with a company that oversees these risks to proactively avoid business disruption is key to avoiding potential problems.

Audits aren’t just necessary for validating new suppliers––they’re an important tool for maintaining quality and compliance over time. The recent rise in outsourcing only further underscores the importance of having a plan in place to conduct regular evaluations led by skilled quality professionals.

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.

For Additional Information Contact us at 407.330.4466

Vendor management is a core competence in successful business. In a competitive marketplace, businesses must look at creative ways to extract more value from providers, while reducing risk and upholding quality.

Simply beating suppliers down on price year after year is not a sustainable strategy!

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.

For Additional Information Contact us at 407.330.4466

Your company starts to grow, and you need more technology to keep up with additional staff, customers and to help improve process. You are aware of the efficiencies and cost savings made possible by new technologies and are upgrading their infrastructures as a result.

But are you aware of How Purchasing more Technology can lead to Cost Creep?

Every CFO knows about “cost creep”; the slow build up over time in the cost/revenue ratio.   In today’s marketplace, there are an increasing number of service providers who can deliver more efficient solutions, giving end users more options than ever.

In the beginning new suppliers are on their very best behavior, cutting deals and slashing cost. The client will enjoy some pretty large cost savings during the first couple of years.

However, as the contract matures and becomes less visible to the client, costs begin to slowly creep up until, if unchecked, they can accelerate way beyond the initially agreed upon amount.

When you purchase more services, your plans may mutate, creating new contracts that incur additional charges. Over time, small ancillary charges can appear but are not questioned, increasing your bills slowly. This “creep” may leave you paying for services you do not need and may not even understand.

Because data is at the heart of every business and it plays a crucial role in businesses staying connected, technology bills are perceived as a necessary fixed expense and are often overlooked even when the initial cost has increased yet services have not changed.

Companies, Organizations and Businesses can easily incur monthly expenses ranging from thousands to tens of thousands of dollars each month.  Managing the financial component of vendors can be a nightmare! Looking at just telecom you have: Multiple carriers, multiple contracts, introductory offers, equipment, and different locations. Just these factors can lead to poor financial management and procurement processes.

LEARN MORE ABOUT COST CREEP from Todd Larsen, CEO

Are you overlooking the financial costs of managing suppliers? What are the risks of doing that?

Here are findings from top research names in the industry. While cost creep can occur with any supplier these statistics share the findings in just telecom alone…

• – Telecom costs rank in the top 5 expenses for most companies (Gartner)
• – 80% of carrier bills contain errors (Gartner)
• – Telecom analysts spend on average 20% of their time identifying errors (Gartner)
• – Enterprises forfeit 12%-17% of telecom expenses without a proactive approach to telecom cost management (Aberdeen Group)

With a Vendor Management Solution contract experts can negotiate a fixed rate for a particular service. The contract terms must be met ensuring that both parties are aware of what is expected and any variances will be flagged and the vendor will be held accountable for any charges and changes outside of the agreed terms.

If you have questions about any of our VMS benefits contact us today at 866-504-4050 to learn more about our Vendor Management Solutions

Typical spend data is not useful to provide business insight and drive informed decision making.

In many large global operations, spend data originates from different people, in different organizations, in different locations, even using different vernacular or languages, and all with different requirements. Further, it is typically coded from a financial perspective.

While General Ledger (GL) and cost center are helpful for the finance organization, they do not provide the views needed to drive procurement decisions. For example, in an accounting system, an item might be classified as a three-year depreciable asset, but not as a laptop computer. This is not the most useful view for purchasing professionals. They need information that is organized—by commodity, by vendor, by business unit, by geography—to show spending patterns. They need to understand how the company purchases, not how the accounting department records expenses.

Once organizations achieve spend visibility by vendor “family” and commodity, the data is sometimes not granular enough to provide business insight and drive informed decision-making. Detailed product information and attributes are trapped inside cryptic line item descriptions and need to be structured and mapped against a more granular commodity structure.

In pursuit of company-wide spend visibility, enterprises are confronted with three key problems

• The data available is poor and ill-suited to driving procurement decisions
• Enriching the quality of the available data has been challenging and costly
• Business dynamics are constantly changing

Why is information quality typically poor?

The first barrier to good information quality is that spend data is dispersed. It is scattered across multiple, disconnected accounting systems (example, Accounts Payable (AP), Enterprise Resource Planning (ERP), corporate purchasing cards, eProcurement systems, and electronic funds transfers) and detailed product information exists across a variety of formats (example, XML, HTML, PDF, Microsoft®Word, text files, spreadsheets, databases). However, even once the data is aggregated, the second barrier is that the data is often of poor quality: unstructured, incomplete, inaccurate, or not at the right level of detail.

There are multiple drivers:

• Data entry errors.
Spending data is often recorded inconsistently with errors, duplicates, and misspellings, leaving a large amount of unclassified, “other” spend.

• Nomenclature variability.
The usage of language, nomenclature, and terminology varies by different organizations and groups responsible for the data, making it difficult to achieve a consistent view.

• Duplicate vendor codes.
Typically, vendor names are spelled various ways and there is no link between parent corporations and subsidiaries making it difficult to get a picture of total spend with any one vendor. Even in a single AP system, for example, individual suppliers might have more than one unique code assigned to them, making it difficult to compile total spending by supplier.

All of this leads to poor vendor management.

If you have questions about any of our VMS benefits contact us today at 866-504-4050 to learn more about our Vendor Management Solutions.

Vendor Risk Management (VRM) is the process of ensuring that the use of service providers and vendors including IT suppliers do not create an unacceptable potential for business disruption or a negative impact on business performance.

A solid vendor risk management strategy should include:

• – A contract outlining the business relationship between the organization and the business.
• – Consistent monitoring of vendor performance to ensure that contract stipulations are being met.
• – Guidelines regarding who will have access to what information as part of the vendor agreement.
• – Stipulations to ensure that vendors meet regulatory compliance guidelines for your industry, and a method to monitor this compliance.

An effective vendor risk management program will make your business safer and more secure. You’ll be able to identify and monitor current and future vendor risks while improving transparency in controls and related activities.

When you outsource, risk and compliance remain managements responsibility. Don’t be blindsided by a third party’s inadequacies. Start the discussion today on how to protect your company from potential vendor risks.

The most important success factor of vendor management is to share information and priorities with your vendors. Vendor management tools can also be found to enhance items such as requisitions, approvals, expense management, payment and reporting. Overall, processes run smoothly when managed by a VMS team that is dedicated to ensuring both parties (business and vendors) meet all requirements of a contract.

Contact LIMITLESS today for a FREE CONSULTATION to discover how to get control of your unmanaged spend, reduce expenses and implement a vendor management solution in your business.

Nationwide: 866-504-4050