Why You Should Outsource Vendor Management Specialists to Avoid Costly Oversights
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.
Outsourcing certain jobs frees up everyone else in your business to focus on the areas they add the most value. An outsourced job usually requires a particular skill set unique to that industry, so having your existing employees pick up jobs they aren’t particularly trained for will take time away from their own specialized work, and will result in less-than-desirable results. You can’t expect your director of sales to also be an expert at marketing, just like you can’t expect anyone else in your company to quickly pick up the skills required of your own job.
When one individual is responsible for developing and managing an internal vendor management system, that information is often held by just that single person. When that person goes on vacation, takes time off for life events, or quits, the work is shuffled off to a backup who doesn’t necessarily know what to do. This can result in two problems:
- The backup does it wrong. Tasked with vendor management, the backup will give it his best shot, but if he doesn’t know what he’s doing, he can easily make costly mistakes. This can create problems down the road.
- The backup wastes a lot of people’s time asking questions. The backup wastes time reinventing the wheel and asking a bunch of questions that the vendor manager already asked.
Outsourcing creates stability. Losing an employee won’t mean losing systems, policies, and procedures. They are already developed and stored in an easily accessible place.
While there are many reasons why your organization would benefit from outsourcing your Vendor Management … Here are 6 of them.
6 Ways Outsourcing to a Fully Managed Vendor Software Solution Adds Visibility and Efficiencies to your Organization?
1. Cloud Based Repository. Increased Efficiency and Productivity.
Contract management is the management of contracts made with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes or amendments that may arise during its implementation or execution. It can be summarized as the process of efficiently managing contracts and analysis for the purpose of maximizing financial and operational performance and minimizing risk.
Contract management is a powerful tool because of the contract insights that can be understood through reporting. A good contract management solution brings tremendous insights on tangible metrics and provides insight that can help you make educated decisions and take beneficial actions. For companies with extensive equipment, hardware and machinery, contract management through a centralized software is gaining tremendous awareness because it can save businesses as much as 20 percent annually. These savings can be found in the reduction of both contract costs and time efficiencies allowing employees to focus on more strategic projects and responsibilities. The key advantage of a strong contract management strategy is consolidation.
For Corporate teams, this means consolidating all of your machines, equipment, assets and warranties into one primary location, where you quickly gain a comprehensive view of your inventory; easily find terms, conditions and rates, manage warranty exit dates, additions and removals; and monitor service levels.
2. Reduce Administrative Overhead
With the average new employee cost in any role estimated to be at a factor of 4 times base salary, outsourcing a process or function when and as you need it will save you money. Often in vendor management we focus on “What will this cost me?” What we are seeing more and more is the reoccurring question, “What will this service SAVE my organization?” With a centralized log of your hardware assets and contracts, time spent sifting through contracts by internal teams and management is heavily reduced, in turn giving management the opportunity to allocate resources elsewhere.
3. Long-Term Discounts
Companies in good standing with vendors can earn additional discounts.
4. Immediate Cost Savings
By taking unused services, systems, machines and any other equipment that is no longer being used off of outdated contracts and warranties and placing only active ones on contracts, businesses see an immediate savings on monthly and annual fees, as well as service fees and productivity losses associated with “unused” hardware.
5. Central Visibility
Know exactly what is happening with your contracts at all times, monitor timely equipment and contractual data and gain an accurate picture of your assets, all via a centralized dashboard.
6. Direct Vendor Communication
Fully managed software means you have an expert between your company and the vendor, saving time internally and ensuring that communication is efficient and accurate.
The six benefits above clearly show how important proper management of your service contracts will increase efficiencies, improve your relationships with the service provider and drive cost savings throughout your organization. An added benefit is that you now have a greater vision into spending trends which allows you to budget and forecast more accurately for future investments. Run a more cost-effective and efficient way to manage your service contracts with LIMITLESS Vendor Management Solutions.
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.
Our software will not only house every contract, service agreement, warranty or renewal agreement, but we also manage negotiations for better rates and terms saving your business from unnecessary fees and costs while maintaining quality standards. If you have questions regarding how to manage vendor contracts/agreements or would like more information regarding our fully managed vendor management solution contact LIMITLESS at (866) 504-4050.