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Contracts are the center of many processes

Top 6 Contract Lifecycle Management Benefits and Best Practices

Contracts are a critically important aspect of business that require accuracy and proper oversight. The entire process of monitoring contracts can be a tedious one. Fortunately, technology now allows organizations to automate this process, ensuring greater efficiency, improved compliance with legal requirements, and even cost savings.

With a proper Contract Lifecycle Management (CLM) software in place, you’re essentially able to manage a contract proactively from the beginning of its lifecycle to its completion. If you’re wondering how, here are some of the key contract lifecycle management benefits and best practices to note:

1. Proactively assess and manage risks

In business, your ability to anticipate contractual risks is critical. Issues such as missed renewals, overlooking important amendments, and tracking compliance obligations are common among companies. However, all these can be managed with a dedicated platform, which can keep you informed of these key milestones while providing ready access to key provisions.

A centralized platform that can regulate processes serves to optimize available resources and significantly lowers contractual errors.

2. Ensure compliance of reporting

Compliance is critical for effective contract management. When businesses fail to meet contractual obligations, the risk of contract termination or litigation is increased. Its effect can be felt across multiple departments in your organization. You can avoid this, or at least minimize it, by making sure you are able to properly record and document compliance as it pertains to legal requirements.

3. Access a centralized repository for important data

One of the biggest advantages that a CLM platform can provide is its ability to house all contracts and peripheral documentation relevant to it in a central repository. With a CLM platform, your company is given an unparalleled level of transparency that allows your team to be more productive and focused. 

According to a study, employees typically spend 2.5 hours of their day just searching, managing, or editing documents they need. With a CLM platform, you can eliminate the need for team members to sift through paperwork manually. 

4. Track compliance of agreed supplier terms

Ensuring compliance from suppliers can be difficult and time-consuming. However, it’s a very important part of managing supplier relationships. Given that, any company that is unable to enforce the negotiated terms due to poor contract management will likely suffer from cost inefficiencies.

This may also result in penalties due to your inability to comply with the agreed terms; missing cost-saving opportunities from special terms or rebates; or even incur fees from payment errors that could all have been managed with efficient contract administration. When combined with Scorecarding, Contracts Administration can be even more effective.

5. Boost contract cycle efficiencies

The traditional contract lifestyle starts when a company identifies a need for a particular product or service, and it ends once that product or service is delivered or fulfilled. The entire cycle traditionally takes a while to complete. Good procurement managers know that as they work towards completion, there are certain opportunities for improvement, including saving money, improving delivery, and reducing cycle times. A CLM platform can organize the many moving parts and help contract managers identify where these opportunities are so they can take advantage of it.

6. Enhance supplier as well as customer relationships

Your ability to manage your contracts reflects directly on your organization. After all, contracts are one of the more important documents that drive your supplier and customer relationships. To that end, you want to be able to communicate that your business is valuable, reliable, and credible.

CLM can help fulfill obligations and go above supplier and customer expectations.

Contract administration tends to be viewed as tedious and challenging. A CLM platform can improve this area by streamlining the process through automation and digitization. If you would like to know how Vendorful can assist you with this process, get in touch with us today.

Team: Hands In!

4 Ways to Maximize Engagement with the Procurement Team

Companies with an effective procurement department in place understand just how critical the process is to business.

However, an established system doesn’t guarantee engagement. In fact, according to a Deloitte study, “Internally, engagement across the business remains an area of focus but, for many, a development point.” 

To date, many internal employees try to avoid going through the proper procurement channels. Some key departments feel that going through a standardized procurement system slows down the vendor search and evaluation process. Others think that it adds more bureaucracy to the procurement process, which doesn’t lend value to their work processes.

These reasons underscore the need for procurement professionals to find a way to proactively engage their stakeholders and increase purchasing efficiencies. Here are 4 ways you can do that.

 1. Focus on relationship building

 According to Chief Procurement Officers (CPOs) in a Deloitte study, 74% of CPOs cite “cost savings as the primary driver for performance measurement.” However, while cost savings is a critical driving force for following a systematic procurement process, highlighting another important advantage may prove to be as effective; thereby, helping to build better professional relationships with internal stakeholders.

When companies focus on cost efficiencies alone, it makes the process seem very transactional. Fusing this benefit with other long-term business advantages could provide stakeholders a valued overview of what the procurement department does. 

2. Empower efficiency without forcing policy

Often, established procurement processes are accompanied by new policies that demand employees to comply with the new system.

Instead of pushing for compliance by enforcing the need to comply with set policies, highlight the potential for improved efficiencies. Start by asking employees what they need, understand their challenges, and then present solutions your procurement team can help provide.  

For example, you could highlight how much time automating the procurement process can save for their department, and how your procurement team can assist with writing engaging RFP bids.

3. Make an effort to understand individual department needs

Even with standard processes, there is really no one-size-fits-all approach to efficient procurement. Procurement professionals should understand individual department needs to give them a tailored approach that will be supported by procurement systems your team has put in place.

For example, if you want to engage sales, be sure to reach out to the sales team and gather information about company products and their competition. If you want to learn more about marketing needs, inquire regarding how their department approaches branding and company positioning. For operations, find out what internal processes need additional support.

Knowing more about how your company’s individual departments operate means your procurement team can offer better solutions to their sourcing needs. Ultimately, it helps align your own procurement goals with each department’s objectives.

4. Explore other areas of value

Again, cost reduction may be at the top of every department’s priority list. However, there are other ways that procurement teams can provide value.

For instance, procurement teams are very knowledgeable about market trends. Data gathered from your research could very well be used for more insightful decision making for marketing and sales departments.

Bottom line…

Successful procurement teams with great engagement rates not only use the knowledge of having the necessary processes in place, but they also make sure their stakeholders are using it.

To find out how automating key procurement processes can help boost engagement, schedule a demo of our vendor management services.

Are your sourcing methods as effective as you think?

Quiz: Are Your Sourcing Methods as Effective as You Think?

If your procurement team is like the ones we usually encounter, then it’s a given that you would like to accomplish your work in the most efficient way possible. So, when traditional sourcing methods deliver the results you need, it’s natural that you stick with them.

However, staying competitive and keeping up with the rapid changes in the business world requires you to take a more forward-thinking approach. Technology means you now have the option do things faster and better. For example, eSourcing platforms help expand your reach as you search for new suppliers or product sources, and can do so at a more competitive cost. With a solutions landscape that has evolved considerably in recent years, there’s no better time than now to reevaluate whether your current sourcing methods are as effective as you think. (And if you are part of the aforementioned procurement teams that we encounter, you’re undoubtedly in the midst of this reevaluation process.)

To assess what you can do to improve your processes, take this brief quiz below. Read through the questions and give yourself a point for each YES answer.

  1. My team and I use a lot of documents, emails, and spreadsheets to manage our sourcing and procurement methods efficiently.
  2. The lack of visibility and transparency in traditional procurement methods means I have to spend more time managing and monitoring bids and proposals than doing productive work.
  3. I tend to spend a lot of time coordinating between suppliers and internal stakeholders to ensure everyone is in the loop.
  4. The prospect of sourcing new products or suppliers feels tedious and daunting, and usually costs a lot of money.
  5. It takes us a lot of time to prepare a proposal to send out to prospective bidders.
  6. It regularly takes our team weeks, or even months, to find the right supplier that meets our stakeholders’ requirements.
  7. Our suppliers tend to feel that we’re pitting them against each other, which creates tension in the relationship.
  8. Our relationships with our network of suppliers can be strained, especially when we are trying to get the best price for our requirements.
  9. Our team finds it difficult to find new suppliers to participate in the sourcing process.
  10. Objectively speaking, our team finds that our current processes can definitely be improved to be faster, more transparent, and cost efficient.

Now, add up the number of times you answered YES to the above questions.

If you totaled 3-5:

Reevaluate your current processes. Your methods may be effective at the moment, but there could be room for improvement. At the rate businesses are evolving, you might find it harder to keep up with the demands of clients and suppliers down the line. At this point, it would be very helpful to find new ways to keep your procurement team focused and motivated—whether through additional coaching, training or by introducing new tools to help them improve current practices.

If you added up 5 or more:

You clearly need to find a new approach to ensure that your company maintains efficiency and efficacy in spite of apparent sourcing challenges. You might consider leveraging sourcing tools that can offer transparency, streamline communication, improve sourcing practices, and manage supplier relationships all in a single eSourcing platform.

Take advantage of Vendorful’s eSourcing and vendor management platform and find out how you can use it to improve your sourcing methods. Contact us today.

Improve your procurement process

4 Ways to Improve Procurement Processes and Boost Organizational Value

Procurement teams…those are the people who find an organization’s suppliers, right? If you’ve adopted this sort of limited view about procurement (or are surrounded by people who have), you’re (or they’re) gravely underestimating the impact of these teams. The procurement planning processes themselves and the people who are responsible for implementing them can affect almost all organizational departments directly or indirectly — which is why its role in any business is critical.

So how can you ensure that your procurement processes boost organizational value for your company? Consider some of the following tips:

1. Review your current procurement process

“But we’ve always done it this way.” It’s a familiar refrain, particularly when an organization has reached a certain level of success. Complacency is not an attribute that should be nurtured, however. Indeed, reviewing processes is a critical first step in streamlining the workflow of your procurement team. Doing so will drive new efficiencies, which will ultimately have a positive impact across your entire organization. But first, you have to be willing to conduct an honest assessment of current processes and protocols.

Not motivated to dive in? Remember: beyond obtaining goods and services, procurement teams are responsible for sifting through — and engaging with — suppliers that could potentially become long-term partners of your business. These partners have to align with the big picture goals of the entire organization and should share the complementary priorities and values. Given the strategic importance of this alignment, you can hopefully use the high-stakes nature of this undertaking to motivate yourself to see if the existing processes support this vision and then amending them if they don’t.

2. Focus on increasing employee skills through training

Continuing the training and development of employees is one of the leading factors that contribute to an organization’s success. Yet, in a survey conducted by Middlesex University Institute, 74% of the research subjects felt that they weren’t able to achieve their full potential in the workplace due to limited development opportunities.

This statistic presents a huge opportunity — one that we’ve empirically witnessed in procurement — in that new technology has been adopted to help employees learn new methods to improve their job performance. So much of our attention is devoted to procurement tools. (And this makes sense because we’re in the business of developing procurement tools!) However, to optimize the value of the tools, procurement professionals should be well equipped to use them. Distance learning, on-demand training, and more have created unprecedented access training.

3. Leverage an eSourcing platform

Leveraging a strategic sourcing template for RFPs, RFIs, and RFQs can give your procurement team more transparency and visibility regarding potential suppliers. It should make it easier for procurement teams to acquire a better understanding of what each supplier can bring to the table; as well as identify specific qualities that will allow them to see if they are a great fit for the organization.

Procurement teams are lauded for their ability to provide cost savings for companies as they source the goods and/or services required by their organizations. However, the goal isn’t necessarily to find the lowest price but to optimize for the highest value, a calculation that undoubtedly includes price. A robust eSourcing platform will help disentangle the qualitative and quantitative data, enabling procurement to select the suppliers that provide the best overall value in light of the selection criteria. The result? Strategic sourcing replaces tactical purchasing.

4. Cultivate good supplier relationships

If your organization is large enough to have a procurement team, then the success of the organization will be significantly impacted by the quality of its suppliers. In addition to maintaining active relationships, procurement teams are expected to have a network of qualified suppliers to which they send out bid requests when the need arises. Granted, you can simply seek out new suppliers when a new project or requirement comes along, but that can take a lot of time and effort. Essentially, doing so will require you to start over from scratch each time. Such delays from the procurement team’s side could cause a domino effect across the whole organization.

Similarly, once the people on a procurement team are engaged with a supplier, it’s incumbent on them to be an active participant in the relationship. Be sure to treat your suppliers fairly and conduct business with the utmost professionalism.

Keep these tips in mind if you want to improve your procurement team’s effectiveness. Remember, it’s not just about saving money or about putting out the current fire. Effective sourcing practices can have a positive chain reaction to your entire organization. So take a long view, tighten your processes, and get set up for success.

Take advantage of Vendorful’s eSourcing platform and find out how we can help improve your business operations. Get in touch with us today.

Improve procurement team performance

5 Ways to Increase Your Procurement Team’s Performance

The role of traditional procurement teams is changing.

By definition, procurement experts are typically responsible for obtaining goods and services based on a company’s needs. However, these days, their role is expanding and they’re also in charge of staying on top of supply market trends and understanding how these can affect the business. Companies rely on them to use their expertise and insight to create new growth strategies and help them remain competitive. Procurement teams are also key players in business expansions with significant supply chain impact.

Given the importance of their role, it’s crucial that companies set their procurement team up to succeed. Here are five ways you can do just that:

  1. Be transparent

Be very clear about what you expect from your employees. This goes a long way towards getting the job done; especially for team members who juggle as many functions in the company as procurement professionals.

Procurement teams should know exactly what the company needs from them to ensure that they are focused on the right priorities. It helps to involve them in major company decisions as early in the process as is feasible so that their daily priorities don’t inadvertently drift too far from the company’s long-term strategic direction –.

  1. Provide constructive feedback

Employees rarely do well working in silos — this is especially true of procurement teams. They’re tasked to coordinate both with internal teams and clients, which means it’s especially critical for them to receive regular feedback from people they interact with.

Providing the team with constructive performance feedback lets them know exactly where they’re at and how well they are doing. It’s also a great way to let them know what areas of the job they can improve on.

  1. Give them incentives

Positive reinforcement is great. Giving your procurement team that extra push through incentive programs is essential to acknowledge that they’ve done a stellar job.

Proactively reward your team for a job well done. Try setting smaller annual goals that procurement teams can work on. Provide incentives when they successfully complete each objective. This will help them feel more accomplished and motivate them towards achieving the bigger, long-term company goals.

  1. Recognize individual expertise

Procurement teams succeed as a group. And within that group, there will be individual team members who will stand out for their specific areas of expertise. For example, one person may enjoy haggling directly with suppliers, while another may loathe it. Identify their particular areas of strength or what specific part of procurement interests them and leverage that as much as possible.

  1. Give them the tools to help get the job done faster

As the job of procurement continues to evolve your team now finds itself intricately involved in multiple aspects of business operations. Think of ways to ensure that they are able to efficiently do their jobs.

One way might be to streamline key aspects of the procurement process, such as writing effective marketing RFPs. eSourcing makes that process more transparent, promotes better adherence to best practices, and saves time for both your team members and your suppliers. Providing the tools to get the job done more efficiently shows your team that you are invested in their success.

If you want to enable eSourcing as a way to increase your procurement team’s performance, find out how Vendorful can help. Contact us today!

Reverse Auctions drive better business value

Reverse Auction Benefits: 3 Ways They Can Drive Better Business Value

We’ve dedicated quite a bit of time speaking to the virtues of the RFP process. Indeed, if you’re sourcing any complex good or service, running a Request for Proposal, is a great way to gather and evaluate the data the will ultimately support the decision you make. While running a comprehensive sourcing event makes sense in many scenarios, there are other situations where price is the overriding criterion. If that is the case, and the product/service being sourced is steeped in commodity rather than complexity, you might have a good candidate for a reverse auction.

When executed properly, reverse auction software can significantly reduce a company’s purchasing cost, while maintaining quality and service levels. By leveraging the right tools, you can enjoy a process that is efficient and expedient. And we’re not the only ones who think so. In fact, reverse auction usage saw a huge spike in 2017.

Evidently, more and more organizations are recognizing how reverse auctions can drive better business value. If you’re not using reverse auctions yet, you may be wondering, “What are they seeing that I’m not?” Here are some benefits that will support your efforts to drive adoption of this reverse auction technique.

1. Significant cost savings

Most people have only witnessed auctions on TV or in movies. The formula is almost always the same though…. A person in the front of the room points to bidders as the price for some item goes up, up, up. It makes sense then that the opposite dynamic is in play in a reverse auction. Vendors compete to provide a product or service, pushing the price down, down, down.

Smart sourcers will make sure that any specifications are clearly communicated the vendors. (Ideally, this should happen well in advance of the reverse auction itself!) Done right, reverse auctions can be one of the fastest ways to reduce cost without sacrificing the supplier’s quality of service. The data bears this out too, with buyers regularly reporting cost reductions around 10-20 percent.

2. Gets you to the finish line faster

Some sourcing processes are bound to be time consuming. If you’re buying a complex, mission-critical system, there’s no way around it. Using an eSourcing suite like Vendorful can automate much of the cumbersome pieces, but ultimately, you will be relying on human evaluation across a range of criteria. But in the event that you’re purchasing commodity goods, it does not necessarily make sense to use the same process. If your primary focus is on finding the provider with the lowest price, an RFQ might make sense in lieu of an RFP. And beyond that, a reverse auction software might make sense in lieu of an RF Anything.

Reverse auctions give buyers the opportunity to level the playing field, fairly and efficiently. They foster a transparent bidding environment where both buyers and vendors have a clear understanding of the specifications and the importance of cost. Weeks or months of verbal and written negotiation with potential vendors can be reduced to a few hours or less.

3. Helps build and maintain supplier relationships

If you work in sourcing, you might have raised your eyebrows when you read the heading. We, too, were surprised when we heard rave reviews about the reverse auctions from some vendors. Given the nature of the process, we, like many sourcing professionals, assumed that the tradeoff for better pricing could be a strained buyer-vendor relationship. So we were certainly heartened to hear such effusive praise from vendors. What did they like?

  • Transparency. Vendors might not like feeling like they are in “a race to the bottom.” However, when the buyer acknowledges from the beginning that price is the primary factor in the decision-making process and runs a high-integrity process, it’s much easier for vendors to get on board.
  • Speed. Like buyers, vendors have a fixed amount of time in their day. While getting top dollar for a product or service sounds ideal to a vendor, that needs to be balanced against the amount of time that is invested to win the deal. For commodity goods, the cost borne by the vendor in a protracted sales process can easily offset the somewhat higher price achieved by having done so. Put differently — the buyer is not the only one who benefits by quickly getting to the finish line.

Organizations that have not used an eSourcing tools probably haven’t even contemplated running a reverse auction. And even among those organizations who have embraced sourcing software, there may well be apprehension when considering running a sourcing event other than an RFX. But if your organization buys any sort of commodity product or service, reverse auctions can be powerful weapon in your sourcing arsenal.

If you have more questions on how reverse auctions can drive better business value for your organization, we’ve created an ebook for you: The Essential Guide to Reverse Auctions.

And if you want to learn more about Vendorful’s Reverse Auction capabilities — or even take reverse auctions for a test drive — please don’t hesitate to get in touch with us today.

eSourcing benefits buyers and suppliers

5 Benefits of eSourcing for Both Purchasers and Suppliers

The benefits of eSourcing may be clear for buyers, but streamlining the procurement process tends to be met warily by vendors. The apprehension stems from the impression that any level of process automation commoditizes their products and services, and that eSourcing platforms are largely one-sided in favor of the purchaser.

The fact is, however, that eSourcing platforms can facilitate real-time dynamic feedback and foster strategic communication so that it becomes a valuable tool for both purchasers and suppliers.

Here are some of the top advantages of eSourcing:

1. Unparalleled transparency through technology

Most eSourcing platforms are capable of providing real-time feedback via analytics tools and itemized ranking. This means that not only do buyers enjoy a big picture view of where all their suppliers stand and what they have to offer, but suppliers also get unprecedented competitive intelligence. Insight into what competitors are e.g. bidding in reverse auctions puts a supplier’s own pricing strategy into a clearer perspective.

2. Levels the playing field for all suppliers

eSourcing platforms ensure that all suppliers have equal access to the same information from the buyer. This promotes fair play among all participants and guarantees that everyone is able to see the same questions and answers. On the flip side, removing bias from the procurement process ensures that purchasers get the best possible bids and options from suppliers.

3. Improves trust between suppliers and develops relationships

Here’s how the typical procurement process works when done manually. Purchasers will start by briefing multiple suppliers on the details of their inquiry. From there, a supplier will come back to the purchaser with an offer. In order to negotiate the bids from all suppliers, purchasers will typically present the pricing offered by supplier A to supplier B (or vice versa).

The whole process is quite tedious and tends to foster an adversarial relationship between purchasers and suppliers. While purchasers may end up with their desired bids, suppliers may end up feeling shortchanged. This isn’t a great way to start a working relationship.

This is something that eSourcing handles easily. It’s the market that drives the price and because it’s out in the open, it can’t be pinned on a specific supplier or the purchaser’s negotiation skills.

4. Saves time for all parties involved

There’s a lot of back and forth when it comes to the procurement process. Briefings alone can take up hours — if not days — out of already busy schedules. And that’s excluding any negotiations.

Allowing both purchasers and suppliers to access standard templates and collaborate via a central system accessible to all relevant stakeholders can drastically streamline the process for everyone.

5. Offers more business opportunities

eSourcing platforms not only ensure that purchasers achieve operational efficiency, but also offer ease of use to suppliers as well. Once they familiarize themselves with how the platform works, it’s now easier for them to join bids for your company and win potential business.

One last note…

While software-enabled procurement is anchored in the same basic concepts of more manual processes, shifting to a digital platform will require some process changes for everyone involved. Both purchasers and suppliers will undoubtedly reap benefits from a high-quality strategic sourcing platform, but it will require a commitment to changing old habits and processes for eSourcing to truly shine in your organization.

Educate yourself and your suppliers so that key stakeholders in your organization can develop a positive view of eSourcing, understand what it can do for you, and start leveraging its benefits. If you have any experience with using eSourcing platforms, we’d love to hear all about it. Leave a comment below.

Talk to us to find out how Vendorful can help ensure you and your suppliers take advantage of the benefits of eSourcing. Get in touch with us today.

Vendor feedback helps!

3 Ways Feedback Can Improve Vendor Relationships

For any organization, ensuring that your vendors are able to meet your requirements and expectations is critical. However, this is not just a matter of choosing partners and then passively waiting for them to delight or disappoint: how you manage your vendor relationships can have a major influence on whether they succeed or fail.

One action customers can take to improve vendor performance is to consistently collect feedback from internal stakeholders. This proactive approach increases visibility into your vendor’s performance throughout the contract lifecycle, and ultimately enhances the business relationship.

Let’s delve into the nitty-gritty details of how feedback can improve vendor relationships with the explore the top 3 reasons to keep your lines of communication open.

  1. It helps clarify expectations between yourself and vendors

A study published in the Washington Post states that frequent feedback can help boost employee performance by as much as 12 percent. Why? A manager who is able to clarify his/her expectations to employees reduces the risk of miscommunication.

The same can be applied to vendors. Although you have a contract that may cover the basic service terms, it can leave a lot of room for confusion given the fast-paced nature of conducting business. Regularly scheduled performance evaluations can help to align expectations and ensure that operational and performance issues are addressed.

  1. It facilitates proactive performance management

According to a study conducted by the Harvard Business Review, “negative (redirecting) feedback, if delivered appropriately, is effective at improving performance.”

In the context of procurement, it’s typical for companies to provide performance surveys at the end of a contract. However, while useful for future reference, the retrospective nature of such an inquiry means that vendors are unable to address and possibly correct deficiencies as they arise, particularly if they are not specifically articulated. With regular periodic feedback, vendors can proactively address performance failures, thereby improving their operations in real time.

Doing otherwise could be a missed opportunity to strengthen your vendor relationships.

  1. It gives companies a chance to recognize good performance

Feedback need not be negative: buyers can certainly provide positive reinforcement as well. In general, people are more willing to go the extra mile if their efforts are recognized. It’s a great motivational tool.

However, it’s difficult to acknowledge a job well done if you are unable to pinpoint the reasons a particular operational flow is successful or showing marked improvement. If you wait to long to analyze and recognize successful outcomes, the key stakeholders might forget important context. Collecting feedback in the midst of an engagement allows buyers to accurately document strong performance and recognize it.

Good vendor relationships – with a strong focus on vendor performance – foster smooth operations, and promote relationship growth and longevity. Consistent feedback is one of the best ways you can facilitate such relationships. Intermittent feedback is better than no feedback, but a frequent, open, constructive dialogue – supported by stakeholder data – is best of all.

Technology has proven itself to be a game changer for many industries. Therefore, it’s no surprise that it has made a significant impact even in the very niche aspects of business operations, like vendor management. Platforms like Vendorful can make this process easy, painless and automatic. (And if you can think of ways to gather insightful feedback from your vendors, tell us about it below!)

For a comprehensive explanation on how to improve vendor relationships, get in touch with us today.

For any organization, ensuring that your vendors are able to meet your requirements and expectations is critical. However, this is not just a matter of choosing partners and then passively waiting for them to delight or disappoint: how you manage your vendor relationships can have a major influence on whether they succeed or fail.

Vendor feedback helps!

One action customers can take to improve vendor performance is to consistently collect feedback from internal stakeholders. This proactive approach increases visibility into your vendor’s performance throughout the contract lifecycle, and ultimately enhances the business relationship.

Let’s delve into the nitty-gritty details of how feedback can improve vendor relationships with the explore the top 3 reasons to keep your lines of communication open.

  1. It helps clarify expectations between yourself and vendors

A study published in the Washington Post states that frequent feedback can help boost employee performance by as much as 12 percent. Why? A manager who is able to clarify his/her expectations to employees reduces the risk of miscommunication.

The same can be applied to vendors. Although you have a contract that may cover the basic service terms, it can leave a lot of room for confusion given the fast-paced nature of conducting business. Regularly scheduled performance evaluations can help to align expectations and ensure that operational and performance issues are addressed.

  1. It facilitates proactive performance management

According to a study conducted by the Harvard Business Review, “negative (redirecting) feedback, if delivered appropriately, is effective at improving performance.”

In the context of procurement, it’s typical for companies to provide performance surveys at the end of a contract. However, while useful for future reference, the retrospective nature of such an inquiry means that vendors are unable to address and possibly correct deficiencies as they arise, particularly if they are not specifically articulated. With regular periodic feedback, vendors can proactively address performance failures, thereby improving their operations in real time.

Doing otherwise could be a missed opportunity to strengthen your vendor relationships.

  1. It gives companies a chance to recognize good performance

Feedback need not be negative: buyers can certainly provide positive reinforcement as well. In general, people are more willing to go the extra mile if their efforts are recognized. It’s a great motivational tool.

However, it’s difficult to acknowledge a job well done if you are unable to pinpoint the reasons a particular operational flow is successful or showing marked improvement. If you wait to long to analyze and recognize successful outcomes, the key stakeholders might forget important context. Collecting feedback in the midst of an engagement allows buyers to accurately document strong performance and recognize it.

Good vendor relationships – with a strong focus on vendor performance – foster smooth operations, and promote relationship growth and longevity. Consistent feedback is one of the best ways you can facilitate such relationships. Intermittent feedback is better than no feedback, but a frequent, open, constructive dialogue – supported by stakeholder data – is best of all.

Technology has proven itself to be a game changer for many industries. Therefore, it’s no surprise that it has made a significant impact even in the very niche aspects of business operations, like vendor management. Platforms like Vendorful can make this process easy, painless and automatic. (And if you can think of ways to gather insightful feedback from your vendors, tell us about it below!)

For a comprehensive explanation on how Vendorful can help a company improve their vendor and customer relations, get in touch with us today.

Essential RFP Checklist

Essential Tips for Every Stage of Your RFP Process

It’s easy to get lost in a sourcing event. In addition to making sure you nail each step of the RFP process flow itself, you’re also trying to wrangle data, vendors, and internal teams across a variety of communication and management platforms — none of which seem to speak to each other. There is an understandable temptation, and sometimes even pressure, to cut corners for expediency’s sake, but you’re fully aware that cutting corners will lead to a less-than-ideal outcome. While for some organizations, the RFP has devolved into a box to be checked, top sourcing professionals understand the value of running a high-integrity, rigorous process. Below, we’ve put together a list of RFP process steps and tips to keep your team on track, and maybe even show you some things you didn’t know were missing. Read more

vendor giving you a vendor-written rfp

A vendor wrote your RFP. You won’t believe what happened next.

Corporate purchasing is hard. People who don’t make purchasing decisions probably don’t realize what a challenge it is. How hard can it be to shop for things? We all shop for things, don’t we?

But buying (say) cloud hosting is a lot harder than buying a pair of shoes. For one thing, when you buy shoes you don’t have to worry about how those shoes will affect dozens of other stakeholders; you just have to worry about how they affect you. For another, you know all the right questions to ask about your shoes: are they comfortable, do they look good, and are they the right color?

Odds are unless you are a hardcore IT expert you have no idea what questions to ask a cloud hosting provider. If you’re an executive of a mid-sized e-commerce business, you just want to make a decision and get back to your day job. If you’re a purchasing manager at a large enterprise, you have dozens of other outstanding purchasing requests demanding your attention and don’t have the time to focus on becoming a cloud technology expert in a matter of weeks.

You want to run an RFP to compare multiple options, but you don’t know where to begin. So what do you do? You call up a salesperson and start asking them questions to educate yourself. Before you know it, they’re offering to give you their own vendor-written RFP! Problem solved, right?

Wrong.

scoobie doo smh at vendor-written rfp

It’s tempting. Oh boy, is it tempting! After all, they are domain experts. And if they include anything that biases the results towards their own solution you’ll surely catch it, right?

Actually, you probably won’t. Not because you’re not smart and capable, but because a subtly biased question can sound so reasonable if you aren’t deeply educated in the domain.

Let’s consider a specific example in cloud hosting. Suppose that their vendor-written RFP includes a question about supporting virtualized instances of Linux and Windows servers. Sounds fair, right? I mean, shouldn’t your hosting provider support Linux and Windows servers?

Well, if you really want a virtualized server running one of those operating systems so you can install a bunch of software yourself, then yes they should! But what if what you really want is just for someone to host your website without forcing you to get into those details? The truth is you probably shouldn’t care about the underlying technology. But as it turns out, the company that “helped” with your RFP just so happens to provide virtualized servers running the OS of your choice. By including that question from their RFP template, you’ve guaranteed that you’ll get a “no” from (for example) Google, Microsoft, and many other excellent hosts. And you’ll get a “yes” from the company that gave you the RFP!

Or perhaps they suggest a question on whether classroom training is available. Training is important, isn’t it? Of course! Sounds reasonable! But does training need to be delivered in person, as a lecture, in a group setting? Is that an efficient use of time for your company? There are many ways of efficiently delivering product training these days, and the best hosting solution for your company’s needs might offer training in a better way than this vendor-written RFP leads you towards.

These subtle introductions of bias towards a single vendor add up over the course of a long RFP and are a major contributor to the first touch problem. (For more on that and other problems relating to corporate purchasing, check out Corporate Purchasing Is Broken and the RFP Is a Horrible Thing.) You want to find the best solution, not just the first solution. That’s why it’s much better to lean on community expertise – rather than vendor expertise – when looking for help with an RFP. Rely on the wisdom of other buyers who have been in your position! And use the aggregate expertise of the vendor community, not the single opinion of a biased salesperson.

To get started with an unbiased RFP template, join Vendorful today!