What do you look for in a vendor management system solution?

A Vendor Management System should be a strategic support tool to your underlying business processes. It should not be a heavyweight, cumbersome, or overly complicated system that drives the wrong behaviors and actions within your organization.

Key features that you should look for are:

1) Vendor Master Data Management - A good VMS will enable you to load vendor master data and match it with other systems such as financial (GL, accounts payable, etc.), human resources (HR), and sales force automation (SFA) systems. The information in the vendor portal software should be consistent across these disparate systems, to give a holistic view of the vendor risk from all of these different perspectives.

2) Vendor Collaboration - A good vendor management system will enable you to collaborate with vendors in the following ways:

• Manage existing vendors: change contact details, add/remove employees, add/remove bank details, add/remove tax details and so on.
• Manage existing contracts: add/remove specific contract line items; manage contract expiry dates; manage renewals; manage contract extensions and so on.
• Request information from vendors: request information from vendors via standard forms delivered as part of the solution.
• Request action from vendors: request items such as credit limit increases or contract changes via standard forms delivered as part of the solution.

3) Data quality: Data quality is critical for any type of business intelligence tool. A vendor risk management solution should be designed to collect data from multiple sources, including human input and automated feeds, and match it with existing data sources. The vendor risk management solution should offer built-in validation rules to ensure that all data received is accurate and consistent.

Unexpected expenses, poor performance or an unreliable vendor can cause a huge disruption to your business.

Vendor management systems are needed by any organization dealing with third parties that are important for the company, involve high risks and generate significant amounts of money.

The challenge is to find the right solution for your needs. Also, many organizations have multiple vendors that need to integrate in one vendor management system which makes it hard to find the best software that serves everyone.

Find out how TYASuite cloud-based vendor management system can help you define and scope your vendor risks, understand their likelihood and impact as well as assign them to the right people who are able to take action.