Vendor management helps organizations take third-party vendor relationships from a passive business transaction to a proactive collaborative partnership. While working with IT vendors can help ease the burden on IT, it also raises concerns, especially around data, risk and security. A sound IT vendor management strategy can help organizations determine which vendor best fits the company’s needs while keeping in mind relevant features, price, availability, risk and security, and compliance regulations.
As most organizations rely on multiple third-party vendors, complexities compound and juggling a large number of vendor relationships can quickly overwhelm an already-busy IT department. Plus, to ensure the best service, businesses should avoid falling into a trap where they stick with current vendors out of ease and convenience, even if the service, price, or features aren’t exactly what the company is looking for.
Instead, establishing a dedicated vendor management practice can help keep your organization and your vendors on task after the initial contract is signed, and help establish processes for continually evaluating vendor performance to ensure the relationship remains beneficial.
Left unmanaged, vendor partnerships can quickly fall behind. However, by establishing a point-person who is focused on managing that vendor relationship a strong dynamic partnership can be formed, and this is one of the main goals and benefits of vendor management.
Other benefits of an effective vendor management process include the following:
Successful IT vendor management requires a solid base of technical knowledge in addition to soft skills. IT vendor managers need to be able to understand the intricacies of each technology, process, software or tool that is being outsourced to a third party. However, it’s also a role that requires strong soft skills in order to communicate with vendors and to maintain that relationship.
The responsibilities of an IT vendor manager include anything involved in the process of researching, communicating with and deciding on a specific vendor to meet organizational needs. You may have to renegotiate contracts, find the best deals, deliver comparisons between products to executive leadership, manage long-term relationships with vendor contacts and keep an eye on how relationships evolve.
According to Job Hero, the most important skills and qualifications for an IT vendor manager include:
Companies that work with a wide array of vendors might go as far as to create an IT vendor management office (VMO), which is a department that specifically oversees vendor relationships. This department helps guide the organization through RFP creation to final implementation of the service, and helps IT leaders stay on top of the relationship with regular performance evaluations.
Vendor management tools and software are available to help organizations manage a large number of vendor relationships. These tools can help IT leaders and vendor managers keep notes on different products, costs, services and contract details.
IT vendor management tools and software can be useful for something as simple as keeping track of vendor contact information, phone numbers and email addresses. Other tools may go as far as to deliver detailed reports on the cost-benefit analysis of certain contracts. They’re also useful for the research phase, as many also offer reviews and ratings on vendors or even offer lists of preferred vendors.
According to Capterra, here are some of the most popular and well-known vendor management software tools:
The average salary for an IT vendor manager is $125,714 per year, according to data collected by PayScale. Reported salaries range from $51,000 to $146,000 per year, with an average yearly bonus of $15,484.
There are certifications you can earn to validate your knowledge with vendor management, including certifications specifically focused on risk assessment, contract management and relationship management.
Available certifications include:
There is a wide range of courses available, both online and in person, that you can take to develop or brush up on IT vendor management skills, including:
This story, “What is vendor management? The key to productive vendor partnerships” was originally published by