Poor Vendor Management May Be Impacting Your Bottom Line
No matter what industry you’re in, your company likely works with more vendors than you’re even aware of. Each department in your organization has its own needs and its own set of suppliers to fulfill those needs. Even if you’re a medium-sized company, the number of SaaS tools you license is likely in the many hundreds. And as your company grows, your vendor network does as well. It’s simply the nature of business.
Forgotten Outcomes and Unearned Loyalty
The problem is that many companies spend a great deal of money on vendors without tracking the value they’re realizing from these tools. If you look at any one of the suppliers your company shells out money to on a recurring basis, you’ll find that there was at one point a reason for the partnership. Maybe you started using a SaaS solution to drive more leads or a manufacturer to create a component product. Whatever the vendor type, there were specific outcomes you were looking to achieve when the relationship first formed.
Without a system in place to manage vendor relationships and to track value realization, however, these desired outcomes are often forgotten. As a result, many businesses simply go with the flow and keep spending money on vendors that are not delivering on the value they promised. Loyalty becomes the unintended side-effect of inefficient vendor management rather than the result of outcome achievement.
Creating Accountability
In order to better manage your vendor network and protect your bottom line, you need to create mutual accountability for the achievement of desired outcomes and keep them at the center of each supplier relationship. The following steps can help you ensure your budget is being spent wisely and determine when you need to reallocate funds.
Step 1: Work together with vendors to define and document your team’s desired outcomes to set expectations for each partnership.
Step 2: Create a plan of action to ensure everyone is on the same page and working towards common goals.
Step 3: Gain access to your own data related to the use, adoption, and effectiveness of vendor products and services.
Step 4: Track the achievement of desired outcomes over time so that you know whether to prolong or terminate the vendor partnership.
Step 5: Establish a consistent process for proof of performance across your entire vendor network.
It’s a win/win strategy because following these steps is beneficial to vendors as well, allowing them to ensure the success of their customers. By adopting an outcomes-based approach, they can align sales, success, and delivery teams around real business impact that their customers can see. The result is an increase in customer satisfaction, a more efficient use of resources, and higher retention rates.
MetaCX for Vendor Management
Now you may be thinking, “This all sounds great, but how am I supposed to follow all five steps across my company’s entire vendor network?”
That’s where MetaCX fits in. For the first time ever, buyers can use a single platform to manage all of their vendor relationships and ensure ROI. MetaCX provides a shared space where suppliers and buyers can define and measure outcomes together, giving buyers visibility into real business impact across their entire supplier network.
It’s time for you to close the loop by establishing a true correlation between your investments and the achievement of your desired outcomes. Start using MetaCX today.