Forming A Lasting and Lucrative Vendor Relationship

Forming A Lasting and Lucrative Vendor Relationship

Maintaining a good relationship with your vendors is important. The company will benefit by having someone that will provide an affordable delivery cost and enhanced service levels. The human resources department will benefit since the vendor’s solution won’t generate extra or distinct payroll work with regard to the delivery model. Below are some ways in which a stronger relationship with vendors can be fomented:

Successful Management Comes From Three Teams

There are three teams whose input is essential for strong relationships with vendors, and these three teams are executive steering, service implementation and delivery, and relationship management. Executive steering is responsible for creating and strengthening the strategic direction of thelarge business, and will provide various assets while managing relationships with clients. Some of their assets consist of equipment or consultants, along with employees.

The implementation and service delivery team is responsible for daily procedures, and will monitor change initiatives while evaluating performance. This team will communicate with vendors regarding updates that need to be made as well as how they should be implemented. Prior to implementation, the client and vendor will need to perform a product overview and create flow charts to show how improvements will occur.

It is also important for clients and vendors to have trust, respect and mutual benefit in working together. Any relationship where these three components are not present will not last. Trust should be considered the foundation of the relationship, and mutual benefit involves the advantages that each party gains by working with the other. Vendors are notorious for over promising and under delivering, so this is something that every business has to consider when deciding if it wants to collaborate with them.

The Importance Of Service Level Agreements

Both parties will need to establish an agreement so that the services which will be rendered can be defined. It is also important to note the time period which the agreement covers. The agreement must designate a specific service level which is agreed to by both parties, and it should identify every fee to be incurred as well as the responsibilities of both groups.

A good agreement will always consist of a provision for disaster recovery. It should be kept up to date and receive the approval of an external auditor, and should include a provision which specifies how sensitive information will be handled in the event of the termination of the agreement. It can be helpful for the vendor and client to establish an advisory board which is comprised of a consortium of clients who will be responsible for giving support and guidance on key issues.

A good advisory board could consist of approximately 5 to 10 people who would serve terms of two years each. It isn’t necessary to have a board which is even numbered since it is the client who would have the final say.

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