tech
Vendor Management
The discipline of selecting, contracting with, and managing suppliers and service providers.
Definition
Vendor management is the function that handles the lifecycle of suppliers and service providers: selection (RFPs, evaluations), contracting (terms, SLAs), management (performance reviews, renegotiation), and offboarding. For service businesses, vendors include contractors, software subscriptions, professional services, and freelancers. Strong vendor management saves significant money (renegotiate annually, kill unused subscriptions) and improves outcomes (clear SLAs, performance tracking).
In your business
- →Run an annual vendor audit - kill unused subscriptions, renegotiate with major vendors
- →Keep contracts and renewal dates in one place - missing a renewal date by 30 days locks you in for another year
- →Track vendor performance against SLA - vendors who aren't measured tend to drift