Are you in charge of managing vendors for your organization? A study by The Hackett Group found that best-in-class companies that have implemented effective vendor management practices have achieved an average of 14% savings on vendor spend.
Here are a few trends in vendor management that you should definitely keep in mind to stay ahead of the curve.
A report by Deloitte (2020) found that 86% of procurement leaders believe that digital technologies will fundamentally change the way their services are delivered over the next three to five years.
Many organizations are using technology to streamline the vendor management process. For example, they may use software to manage vendor contracts, track vendor performance, and automate vendor payments.
Implementing new technology to streamline vendor management processes can be challenging, especially if it requires significant changes to existing systems and processes. Organizations may need to invest in training and support to ensure that staff can use new technology effectively.
A survey by Deloitte found that 71% of procurement leaders believe that increasing supplier risk is a major challenge facing their organization.
As organizations become more reliant on vendors, they are also becoming more aware of the risks that come with working with external partners. Vendor risk management is becoming a more important aspect of vendor management, with organizations putting more emphasis on identifying, assessing, and mitigating risks associated with their vendors.
Vendor risk management is a complex process that requires organizations to identify and assess a range of risks associated with their vendors. This can be challenging, as organizations may need to develop new risk management processes and tools to effectively manage these risks.
A report by HBR found that companies with diverse suppliers tend to be more innovative and have higher revenue growth.
Many organizations are looking to work with diverse vendors in terms of race, gender, ethnicity, company size, and other factors. This is driven by a desire to promote social responsibility and to reduce the risk of relying too heavily on any one vendor.
While organizations may want to work with vendors that are diverse, finding diverse vendors that can meet their requirements for quality, price, and other factors can be challenging. This can require additional effort to identify and develop relationships with diverse vendors.
A survey by Deloitte found that 55% of procurement leaders believe that collaboration with suppliers is essential for driving innovation.
Rather than simply treating vendors as suppliers, many organizations are working more closely with them to build stronger partnerships. This can involve sharing information and resources to drive mutual success.
Building strong partnerships with vendors requires a significant investment of time and resources. Organizations may need to develop new communication and technologies to effectively work with their vendors.
According to a report by Deloitte, 78% of businesses believe that outsourcing is a strategic tool for driving innovation and growth.
As organizations look to focus on their core competencies, they are increasingly outsourcing non-core functions to vendors. This means that vendor management is becoming more important than ever, as organizations rely on their vendors to deliver key services and products.
Outsourcing non-core functions can be challenging, as organizations may lose control over these functions and may face issues such as data quality control and data security. Organizations may need to develop new processes and strategies to effectively manage these risks.
In conclusion, keeping up with the latest vendor management trends is essential for organizations that want to stay competitive and succeed. By understanding the challenges that come with these trends, organizations can be better prepared to face them and achieve success.
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