Each year, non-profits, corporations, and governments invest billions of dollars to purchase items they require for their daily operations. Much of the spending on procurement is wasted since it’s challenging to keep track of the whole process and determine what improvements could be made within the vendor or supplier relation.
The vendor management system is a change that is the basis for managing the entire contract between a business or its suppliers and vendors.
What exactly is vendor management software?
This platform lets businesses manage the various aspects associated with vendors starting with RFQ submissions and negotiation and onboarding to offboarding. While many other activities make managing vendors complicated, these are the main aspects that each process must be able to cover.
Vendor selection
In negotiations with the prospective vendor
The reduction of expenses leads to more favorable deals
Analysis of operational processes and tracking
Risk minimization for vendors
Service delivery is seamless.
The most effective vendor management software is created to handle all the requirements mentioned earlier and much even more.
What should you look for in a Vendor Management System (VMS)
There are some essential functions you should consider when deciding on the ideal vendor management system to suit your firm:
Data management: A good VMS lets users create and monitor vendor data and manage documents, including contract documents, financial statements, or insurance documents.
Performance and risk management Evaluation of new suppliers should be automated, and assessing risks should be assigned an automated score. Your system must be able to track suppliers based on risk and performance.
Communication and collaboration between Vendors The vendors should be able to provide secure documentation and data to your company. Through the appropriate VMS portal, both you and your vendors will be able to be in contact and collaborate before or after contracts.
Reporting: A good VMS will allow users to track vendor-specific procedures, making it simple to provide valuable data to managers.
Management of compliance: Many businesses have vendor management software for easy compliance with strict regulations and rules.
Onboarding and recruiting The likely scenario is that you will require a system to allow effective hiring and integration of the right vendors in a way compatible with your company’s processes.
Integrations: Your selected vendor management software must be able to connect with a variety of business software applications like the payroll system and 3rd vendor risk intelligence tools.
Best Free: Vendor Management Systems
There’s an array of different vendor management solutions that are available today. Yet, not all these are the same. Some particular ones are superior to others. You could use These three top vendor management tools for free to manage your company.
vendor
eVendor is an excellent choice for companies requiring easy and comprehensive vendor management software. It comes with a range of options, such as the tracking of performance by vendors as well as contract management and the assessment of risk for vendors. eVendor is one of the cheapest vendor management platforms available and is a good choice for companies on the tightest budget.
Contract Negotiation:
In the negotiation process, negotiating price and payment conditions with the vendor is a vital aspect of managing vendors. Vendor contracts must be simplified to make both the vendor and buyer profitable. The negotiations with vendors should focus on critical points such as the dates of commencement and expiration of the contract, any goods or services comprised in the agreement, the price per line item, and specific terms and conditions that must be adhered to by each party.
Gatekeeper
Gatekeeper claims to be “an all-in-one management system” built on the automation of vendor management, as well as artificial intelligence and vendor-facing functions. Gatekeeper has an employee Portal which allows employees to inquire about new vendors and audits for compliance. It also has an online vendor portal to manage non-disclosure agreements (NDAs) and information security audits.
Expensing
Expensing provides software and services that assist organizations with the digital revolution to ensure cost reduction. We provide a complete set of procurement, strategic sourcing, and accounts payable solutions to help with accounting and financial control. We provide solutions for any size of business in various industries, helping their clients reduce spending, operate costs and reduce risks.
Vendor Risk Management:
Risks that could arise from vendors, such as security concerns for data intellectual property and security breaches, can directly impact the buyers’ business. The vendor management system has to monitor potential risks in transferring new vendors to their system and the existing ones.
Vendor Management System developed by Freshworks
Freshworks’ Vendor Management System is an ideal choice for companies that require the convenience of a cloud-based system. It comes with all the functions that one would expect from a management solution, like the management of contracts, performance tracking, and risk assessments. Freshworks’ Vendor Management System is also cost-effective, which makes it a perfect choice for companies on a tight budget.
A Vendor Management System by Zoho
Zoho’s Vendor Management System is another ideal option for businesses that need a cloud-based system. It includes all the capabilities you’d expect from a management solution, like the management of contracts, performance tracking, and risk analysis. Zoho’s Vendor Management System is also highly affordable, which makes it a fantastic choice for companies on a tight budget.
SAP Fieldglass
SAP Fieldglass is a cloud-based VMS that assists organizations in identifying ways to engage, monitor the external workforce, and make payments. SAP was ranked as a Leader by Gartner’s Magic Quadrant for Procure-to-Pay Suites in 2021.
Beeline
According to a review of the business technology website, Trustradius, Beeline is an employment platform with data that includes over 30 million employees and over 700 billion dollars in spending on talent.
Torii
Torii is one of the more powerful SaaS management systems available. Explore, optimize, and manage your company’s SaaS consumption and expenses using an integrated central hub. Due to the rapid growth of SaaS options available daily and accessibility to these SaaS becoming available at the press of a button, Modern IT work is more complex than ever.
Future of Vendor Management Future of Vendor Management
The strategic management of vendors will allow a business to find compliance issues and areas for consolidation swiftly. The idea of a gig economy may look appealing, but it cannot be easy to start. There are many moving pieces, and the administrative procedures become complicated.
Automation of recruitment can mean that a business gets the best value from its vendors. It lowers the risk of hiring and leads to more strategic business choices. Additionally, it strengthens relationships with suppliers and helps to save money.
The best vendor management software is compatible with the existing system you are already using and will add benefits to your business operations. It will simplify the AP processes, offer the possibility of self-service for vendors, and facilitate communications.
The most effective VMS choice for your company
Each business is unique, so the most suitable VMS for you and your business depends on your requirements. It’s easier to determine in absolute certainty what aspects of suppliers you need to bring in control with understanding the specifics of your company.
Many service providers and SaaS platforms are backed by vendors, primarily processors, and subprocessors (not all suppliers, manufacturers, etc. ).
Therefore, data privacy and security ought to be the highest priority. Companies growing fast could find themselves in a position where they have control over vast amounts of data but need security. Being aware of compliant vendors is crucial in these situations.
What are the risks facing suppliers and third parties?
As you face, third parties, suppliers, and others are at risk. These include malware threats, trojans, and ransomware. In 2021 one of Apple’s suppliers was targeted with a ransomware attack, using suppliers as a means to pressure Apple. To learn more about this incident, check out our report:
There are other practical threats facing companies. It could be a DDoS attack that causes servers to fail. If this happens, the system may be unable to contact your supplier since their systems have gone down.
Risk management for suppliers and third-party solutions can standardize guidelines and playbooks for all organizations to ensure that every party has sufficient infrastructure for describing attack responses.
Conclusion
Teams in procurement can utilize tools such as Kissflow Procurement Cloud to collaborate effectively with their suppliers and better track their performance. As cloud technology continues to evolve, technology procurement in digital form has made significant strides.
Though some of these products for managing vendors only seem like a viable option, it’s the reality that a complete procurement tool can be either simple to use and has no features or stuffed with features yet requires several months of instruction.
Before jumping on an item, examine every tool to determine whether it fits your particular processes for managing vendors. Do you want vendor-management software that can streamline your process of managing supplier relations in a breeze? Check out the Kissflow trial for no cost now, and determine whether it’s the perfect solution for your business.