Outsourcing has been growing steadily as a business standard since the early 2000s. Companies are finding that using outside vendors or contractors for things like graphic design, human resources, and IT management and computer repair costs less than doing everything in-house.
The speed of internet connections and the growth of mobile technology has made it easier than ever to use vendors for a variety of day-to-day functions.
So, what’s driving this growth and what technology lessons can be learned about effectively managing a growing number of outside vendors?
According to Deloitte’s Global Outsourcing Survey, 59% of companies said that outsourcing was a cost-cutting tool. But money wasn’t the only reason companies are using more outside vendors. 57% of them said outsourcing gave them the freedom to focus on their core business.
Other reasons given for using outside vendors included:
- Solves capacity issues (47%)
- Enhances service quality (31%)
- Critical to business needs (28%)
- Access to intellectual capital (28%)
- Manages business environments (17%)
- Drives broader transformational change (17%)
However, a big part of gaining all those benefits from using more outside contractors is finding the best vendor management software to keep all moving parts going in sync and in the right direction.
Technology Lessons: How to Find the Best Vendor Management Software
My Computing RX works with many companies, both as an IT and computer repair vendor ourselves and to help companies set up a great vendor management software that will make all their outsourcing relationships fluid and productive.
Each business is unique, but there are also commonalities that all vendor management systems need to have no matter what type of industry you work in, such as timeline tracking, payment functions, and ease of use.
First, let’s take a look at why you need a vendor management system and then we’ll drill down into the specifics of what you should look for when choosing the one that’s perfect for your business.
“Why Do I Need a Software to Track Vendors?”
Have you been keeping track of vendor work and payments in a spreadsheet or back-and-forth invoices? Would you like to know instantly where someone is on a project, if the deadline is being moved, or if an invoice has been paid?
While doing it “old school” on written or PDF invoices may seem simpler, it’s not helping your productivity when there are mistakes that happen from misunderstood instructions or balls dropped when confirming a deadline.
Have you ever had a machine go down and wondered, “Who was that great company that fixed it 10 years ago?” But couldn’t find the name. Supplier management software could bring that super vendor up in a few keystrokes.
Here are a few ways that good vendor management software can make your life easier:
- All vendor and project information and notes are easily found in one central location.
- You’re able to chart performance over time and see which vendors have been doing the best job for you and which to replace.
- Ensure any needed licenses or safety approvals to work on-premises are up to date.
- Track, invoice, and get reminders proactively.
- Never spend hours searching through old files again trying to find the price you paid for “that service last time” or whether a discount was applied.
One more statistic you need to know… According to the book Human Resources by Richard B. Renckly, Vendor Management Software (VMS) can save companies 20 to 30 percent in labor and internal costs.
What You Should Look for When Choosing a Solution to Manage Vendors
At My Computing RX, we’ve learned ourselves and helped teach many technology lessons to our clients over the years. We know the ins and outs of tons of different types of software, including those that can help you track your vendor and outsourcing relationships easily.
Here are a few tips on what you should look for when choosing vendor management software.
Easy to Use – No matter how “fancy” a software is, if it’s difficult for your team to use, you’ll start hearing… “I didn’t get a chance to input that one yet,” or “Our vendor hasn’t been using the system regularly.” Easy to use wins every time! Because if it’s not, people aren’t going to use it.
Integrates with Your Other Software – Double input costs time and money. A great vendor software solution should integrate with QuickBooks or another accounting software, and key programs that your company uses on a daily basis so data can be transferred seamlessly from one to the other.
Tailored to Your Business – If you’re a construction company, you’re going to need to track licensing for your sub-contractors. If you’re a medical office, you may need to track the last flu shot for an outsourced home nurse. Each business has unique needs and you’ll want software that fits yours like a glove.
Reporting and Analysis – Robust reporting features are key to getting the most out of any VMS. Data and charts help you see which vendors give you the best deals, and which have been hiking prices over time. They can also give you a great overview of job completion rates, performance, and costs by project or department.
Let’s Get Started! My Computing RX Can Help You with a Free Consultation
Does vendor management software sound like it can solve a lot of tracking headaches for you? Do you want to outsource more, but aren’t sure how to keep up with multiple vendors adequately?
Our professionals at My Computing RX can sit down with you, evaluate your current system, and help you find the best software to meet your needs and one that integrates with your business beautifully.