Why Vendor Alignment Is So Important For Data Management

Non-profit organisations need to be incredibly savvy today in order to maximise their available resources. One of the best ways to lay a solid and strong foundation for exceptional work is through sound data management. Having complete control over your most precious resource is an essential element for success.

Vendor management is a large component of your data management scope of work. It involves sourcing the appropriate vendors for your business’ needs, going through the quoting process, defining turnaround times and scope and making payments timely etc. As a non-profit organisation, you want to ensure that every vendor you work with is a quality provider, which brings the process of vendor alignment into sharp focus.

While traditional procurement approaches used to be key to successful development and deployment initiatives, organisations today experience even greater pressure to achieve streamlined vendor alignment. This is because vendor management has become even more complex due to pressure from improved operational performance and the need to drive down costs.

The traditional vendor management model splintered into various cloud-services, outsourced and traditional fragments, which were scattered throughout the organisation in an unorderly fashion. With technology on our side, each of these splinters is representative of a chance to deliver new efficiencies, while also transforming business processes and cutting costs.

Why Greater Vendor Agreement and Alignment Matters

Greater vendor and data management can translate into more competitive pricing and improved service delivery. It also presents an opportunity to procure the exact combination of services and resources your organisation needs without any room for wastage. In many instances, accessing specific resources by tapping into outsourcing isn’t just a value-add to an organisation, but a necessity. It’s also an economical and reliable way to gain a competitive advantage in a volatile economy.

However, managing this eclectic mix of vendors has become more complex for IT. As outsourcing becomes a more popular option for organisations, a greater number of vendor agreements need to be negotiated. This usually happens outside the IT department, however, it’s up to your IT department to consolidate these agreements and relationships across the business’s various units so as to take advantage of economies of scale. With proper vendor alignment and synchronisation, this becomes far easier to do, but it’s still tough to achieve when there isn’t any vendor management program in place.

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Tools Needed To Develop A Strong Vendor Management Strategy

Decisions regarding vendor spending, performance, contract terms and renewals all demand information that your IT department probably doesn’t have. There are many reasons for this. First of all, your IT department lacks a centralised view of the project, as performance data, vendor contracts and financials are often housed with different departments throughout the organisation. This makes it particularly trying for the department to reconcile all of this.

Secondly, vendor management tools are often developed specifically for accounting, finance and procurement teams. This provides a corporate focus on a macro-level, which is difficult for IT to map back to a vendor management strategy.

Lack of vendor alignment across different departments can easily introduce greater risk to the vendor management process. This can result in unexpected overruns in terms of spending and overlapping or redundant vendors. You may also end up having to deal with surprise contract renewals and other problems along the way.

How Can These Vendor Management Problems Be Addressed?

In order to effectively address shortfalls in your vendor management processes, you need end-to-end visibility of your entire vendor portfolio. With this, your IT department has the overview and information needed to develop a sound vendor management strategy, with far greater synchronisation.

  1. Start by aligning your vendor management processes by gathering the information your IT department needs to develop an informed overview of your entire vendor portfolio
  2. Aggregate your organisation’s vendor spend as it ties in with purchase order and contract details. Analyse the spend you attribute to it, and search for opportunities to consolidate any redundant contracts
  3. In order to enable better decision-making regarding when to acquire, divest or renew any contracts, try and migrate away from burdensome ad-hoc and spreadsheet contract reviews. Instead, actively manage and analyse your agreement terms and details to help you answer questions including:
    1. Are there any contracts about to expire, or will the automatically renew?
    2. Who are the top vendors, in terms of the amount of spend you attribute to them?
    3. Which applications will soon be retired, or tied to any critical business initiatives?

These are only a few of the questions you need answers to if you are to inform a comprehensive data management and vendor agreement strategy.

If you want technology to work for you we run a Technology Enablement Workshop that will give you the insight and information you need to run these effective strategies in-house.

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Posted by Lachie Dixon

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