5 Key Essentials for Vendor Management Day-to-Day Tasks

Vendor management is a complex and multifaceted practice that involves a wide range of activities. For vendor managers, a “typical day” doesn’t exist. On any given day, a vendor manager may need to oversee contract negotiations, review vendor performance metrics, coordinate with internal stakeholders, and ensure compliance with regulatory requirements. Additionally, they may need to identify and onboard new vendors, evaluate vendor risk, and develop strategies to optimize vendor relationships.

Good vendor managers must possess strong communication and problem-solving skills and a deep understanding of their organization's objectives and priorities. They must also stay current on industry trends and best practices and balance competing demands and priorities to deliver value to their organization. Overall, vendor management is a challenging but critical function that plays a crucial role in ensuring the success of today's business organizations.

Key Essentials for Daily Vendor Management Tasks

To effectively accomplish day-to-day vendor management objectives, vendor managers must have these five vendor management fundamentals in place:

1. A centralized and current vendor inventory is a must-have for vendor managers. Identifying vendor relationships is the first step in managing them. Vendor inventories should include all the vendor's products and services, associated risk ratings if those engagements are critical to the organization, and information regarding who owns the relationships.
2. Clearly defined and transparent allocation of roles and responsibilities. These play a vital role in ensuring that all stakeholders are aware of their specific tasks and activities and are accountable for successful task accomplishment.
3. Governance documents, such as vendor risk management policies, program documents, and procedures, are crucial in defining the rules, requirements, and processes used to achieve those requirements. They also provide step-by-step instructions for stakeholders to effectively perform those processes. These documents help ensure everyone involved understands the organizational and regulatory requirements for vendor management and follows instructions to achieve the desired outcomes.
4. Well-designed vendor management processes that follow the vendor risk management lifecycle. The best vendor management programs follow the lifecycle and ensure the associated tasks and activities are completed and executed in the correct order. This approach ensures vendor risk is identified, assessed, managed, and monitored throughout the life of every vendor relationship.
5. Regular reporting to the board, senior management, and other stakeholders supports essential communications detailing if requirements are being met, issues are being managed, and vendors are meeting contractual service level agreements (SLAs). It also details if risk is increasing or decreasing at the organizational, business unit, product, service, or vendor level. Reporting ensures stakeholders have the appropriate level of information to take action or make informed decisions.

Best Practices for Daily Vendor Management Success

To achieve long-term success, it’s crucial to have a strong grasp of the basics. However, vendor managers may wonder what they can do to feel effective and productive daily. Here are some tips to vendor managers in handling the diverse range of tasks and situations they encounter:

• Get organized. Being prepared and organized for the inevitable audit or regulatory exam doesn't have to be a mad scramble if you prioritize documentation, follow established processes, manage issues as they come up, and limit exceptions. Get in the habit of acting with a sense of urgency and not waiting until later to ensure documents are in order or issues have been dealt with. Implementing these daily habits will ensure less chaos and uncertainty in your daily work.
• Prioritize your actions based on risk. When you have a lot of tasks to complete, it can be challenging to address everything at once. If you must choose between activities on any given day, make sure you’re putting your attention on the highest risk issues first. For instance, if you must delay several lower risk activities to deal with a critical vendor, it’s going to have the best outcome in the long run.
• Hold people accountable for their responsibilities. Many vendor managers fall into the trap of doing the work of others because they’re not doing it on time or not doing it at all. This can lead to an overwhelming workload for the vendor manager. Instead, it’s better to hold others accountable for their individual roles in vendor management. 
  
  For instance, if the vendor owner isn’t completing their work on time, it’s better to ask them if they need more training instead of doing the work for them. It’s also important to document all conversations and not wait until the delivery is severely past due before escalating the issue to management. 
• Establish routines to help manage tasks you do regularly. For instance, you can set aside the same time every week to review all outstanding invoices or create a weekly appointment to identify vendor due diligence questionnaires due the following week. This approach organizes your regular tasks and helps you complete them on time. Grouping similar tasks together can also help you stay focused on their completion and accurately track how many of the same tasks you complete in a week. This can be useful information when making a business case for more resources.
• Avoid or eliminate manual processes and the use of multiple spreadsheets to manage diverse tasks. This approach is not only inefficient but also prone to errors. Nowadays, there are many dedicated vendor management software platforms available that can automate various tasks, documentation, and reporting. These platforms can significantly improve the efficiency and accuracy of your work and can help vendor managers do so much more in less time.

Vendor managers may have different day-to-day tasks, but the basics of an efficient vendor risk management practice remain the same. To work more effectively, vendor managers should prioritize actions based on risk, establish routines, and eliminate manual processes. Moreover, holding stakeholders accountable for their individual vendor management responsibilities instead of doing all the work themselves can help vendor managers improve their bandwidth and focus on their duties.