CIOs should take advantage of the latest technologies to improve vendor relationships and save bandwidth while proactively managing contracts and vendors.
As per Gartner’s 2022 report, titled, “Global Market Databook, 4Q21, ” the global IT expenditure is expected to reach US $ 4.5 trillion by 2022, an increase of almost 8% from 2021. This is due to the fact that the pandemic has forced organizations to accelerate their digital transformation efforts and new ways of working. Such an expanding role of digital technologies requires organizations to reassess their vendor management practices. But, acting on it is as simple as one might think.
Often, organizations partner with a diverse range of vendors with varying pay rates, points of contact and contract terms. Today’s IT vendor management teams are stressed with managing more IT vendors than ever before. However, most of their tasks are occupied with strategic day-to-day management activities, making it difficult to focus on areas that matter the most. Therefore, it is essential that CIOs leverage the latest technologies that will help them to support the vendor management functions while simultaneously achieving their digital goals with greater efficiency and speed to the market. Here are a few strategies they can incorporate to achieve this objective:
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Capitalizing on process automation technologies can play a significant role in freeing up vendor management bandwidth and increasing capabilities. Today, the vendor management teams get bogged down in day-to-day tasks that prevent them from operating with total capacity to concentrate on forward-looking, strategic operations. They are overwhelmed with manual tasks such as onboarding vendors, reporting ongoing performance, analyzing the portfolio and much more.
With most organizations investing significant amounts of time in their vendor relationship management efforts, it makes it difficult for them to focus on improving their vendor management functions. Therefore, CIOs should have built systems that will enable them to get timely and accurate visibility into vendor performance and find out the areas they should direct their efforts. They should implement automation technologies and delegate tasks that will free-up capacity for higher-impact services while providing better services and provide accountability. This will also help them to achieve efficiencies via streamlined workflows, improve process controls and metrics for ongoing decision-making.
CIOs should come up with different approaches that will enable vendors to take on service reporting while lessening the burden of vendor relationship managers. Vendors creating and showing reports to the business executives can propel vendor buy-in, freeing up time for the vendor management team to drive insights and specific analysis such as performance, issue resolution and customer satisfaction dashboards.
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Today’s vendor management teams recommend vendors to the business stakeholders by taking price and cost reduction into account. But, these aspects obscure them from a longer-term, value-driven orientation. Thus, instead of thinking in terms of price and cost, CIOs should encourage them to reflect on how supplier relationships managers can reorient themselves to see service providers as their partners and how they can add value to larger strategic business objectives to the organization.
CIOs should encourage vendors to recommend more automation opportunities on gain-sharing principles to unlock significant value to both parties.
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Vishal Muktewar is a Senior Correspondent at On Dot Media. He reports news that focuses on the latest trends and innovations happening in the B2B industry. An IT engineer by profession, Vishal has worked at Insights Success before joining Ondot. His love for stories has driven him to take up a career in enterprise journalism. He effectively uses his knowledge of technology and flair for writing, for crafting features, articles and interactions for technology enterprise media platforms.
