The businesses and individuals that provide goods and services to an organization are considered its vendors. A company could work with a few, dozens, or even hundreds of different vendors, all with different contract terms, pay rates, and points of contact that must be managed through a vendor manager. The term vendor management is used when describing the activities included in researching and sourcing vendors, obtaining quotes with pricing, capabilities, turnaround times, and quality of work, negotiating contracts, managing relationships, assigning jobs, evaluating performance, and ensuring payments are made. It requires a lot of skills, resources, and time.
Though many business owners believe that vendor management is simply about finding the supplier with the cheapest price for a product or service, it’s about more than that. It’s about streamlining the process for heightened efficiencies and managing vendor relationships to ensure that the agreements made are mutually beneficial for both parties.