Organizations are plagued with multiple challenges with the vendor management process. Managing documentation, creating and following up on contracts, procuring materials, managing payments, and adhering to changing regulations can become an arduous process. To overcome these challenges, organizations need a sophisticated solution that enables them to easily manage various operations related to vendor management and improve relationships with vendors. One way of ensuring that the vendor management process is streamlined is by digitizing the vendor management system. Organizations need to invest in a digital vendor management system (both desktop and mobile solutions) to make vendor management hassle-free and simplified. Here are some of the benefits organizations can experience by digitizing the vendor management process:
Benefits of Digitizing Vendor Management Process
By digitizing your vendor management process, your organization can effectively handle many vendors and create a trustworthy long-term relationship with each of them. Some of the benefits of digitizing your vendor management process include:
1) Simplify Vendor Onboarding
Traditional vendor management processes consume significant time and resources at the vendor onboarding stage. With a digitized vendor management system, organizations can shorten the onboarding period, thereby improving productivity and cutting down on onboarding costs. With a vendor management system, organizations can obtain vendor information easily at a centralized location.
Details such as the vendor’s bank account number, order capacity, and regulatory data can be easily acquired and accessed with a centralized vendor management system. This approach makes the process of vendor onboarding quick and error-free. Having features such as form automation in your vendor management system can help complete the onboarding process even faster by quickly filling in vendor details. Thus, you can have a large number of vendors in one place and select the right vendors quickly, depending on your needs, through a digital vendor management system.
2) Manage Contracts Better
Managing multiple contracts with a large number of vendors can get difficult. By digitizing your vendor management process, you can have all your contracts organized in one place. The centralization of data helps easily monitor and manage your open and closed contracts with vendors. You can ensure that vendors meet your needs and adhere to the compliance requirements by easily comparing on-going processes with the terms of the contract. The contracts are visible to your organization and the vendors, improving transparency and reducing instances of conflicts.
3) Reduce Risks
There are multiple supplier risks associated when working with vendors. These risks include unforeseen expenses, compliance risks, and operational inefficiencies. To mitigate these risks, you need increased visibility. This is exactly what a vendor management system offers. With a vendor management system, you can easily track your vendors and gather information periodically. You can easily check vendor qualifications, certifications, finances, and work progress by implementing a digital vendor management system. This can help you identify risks in advance, and you can then take the necessary actions to mitigate them.
4) Improve Documentation Handling and Payment Processes
Physical documentation is difficult to maintain when dealing with high volumes. There is a chance that the documents can get misplaced or undergo wear and tear over time. By digitizing your documents with a vendor management system, you can have all your documents stored securely in a single place. The documents are easy to manage in a digital format and can be kept unaltered for the required period. Document retrieval is also simplified as the documents can be easily searched using various parameters such as vendor name, period, and contract cost.
You can also ensure regulatory compliance by having an auto-delete feature in your digital vendor management system. With this feature, the software can automatically delete a document after a specific period set by the user, based on regulations.
Similarly, payments can be managed easily in a digital format. With digital payments, you have complete control and an overview of all your transactions. You can easily manage various bills and the corresponding payments with vendor management software. By digitizing your vendor management process, you can ensure that your finances are organized to the last cent.
5) Strengthen Vendor Relationships
With a vendor management system, you have effective vendor management capabilities. This results in better business opportunities with multiple vendors. You can create long-lasting relationships with vendors by having smooth collaboration with your vendors on each project. You can create a loyal base of vendors, ensuring that you always have business opportunities that can significantly help in the growth of your business.
Key Features a Vendor Management System Should Have
When digitizing the vendor management process, you need to ensure that the vendor management system has certain features that ensure that you can utilize it to the maximum potential. Some of the key features that a vendor management system should have are:
– Cloud-Based Platform
By having a cloud-based platform for your vendor management system, you can access data anytime, anywhere. You can seamlessly collaborate with your vendors and also have multiple employees work together on a centralized platform. All the related information can be accessed easily by internal and external users at their convenience.
– Real-Time Tracking
By digitizing your vendor management system, you can track your vendors in real-time easily. You have complete visibility over all your vendors. You can easily collaborate with vendors and keep your operations transparent.
– Reporting and Analytics
With the vendor management system’s reporting and analytics, you can get an overview of every vendor. You can track vendor performance on a monthly, quarterly, or yearly basis. Based on the reports, you can make better-informed decisions that can help in the growth of the organization.
In today’s age, geographical and economic boundaries are diminishing. Organizations can work with multiple vendors spread across different parts of the globe easily by digitizing their vendor management process. Organizations can improve their accountability, increase business opportunities, and build strong professional relationships by digitizing the vendor management process. However, digitization is easier said than done. It requires implementing advanced software solutions in the IT infrastructure at your workplace. Digital Fractal can help create customized solutions that can be easily integrated into your IT infrastructure, enabling you to efficiently transition to a digital vendor management system.