What is vendor management?

Each business often has its own list of vendors or suppliers that enable them to optimise operations and deliver better services. Naturally, large companies deal with the highest number of suppliers for various business areas. Having a wide range of suppliers on board requires efficient management of each relationship and service provided. In this article, we discuss what is vendor management and how it can benefit your business.

What is vendor management?

Vendor management is a term that represents all the activities and tasks necessary for a business to manage and optimise relationships with its vendors. “Vendor” is a synonym of contractor or provider, as it includes any third-party business or individual that provides services to a company. The types of vendor vary significantly depend on the size of the business and the industry it operates in. For example, vendors may range from business consultants to software providers and manufacturers.

Why is vendor management important?

In order for a business to function optimally, all of its suppliers must be managed efficiently. Supplier issues may impact, for example, product availability and customer service, which causes serious disruption in the business. Therefore, it is fundamental to ensure that all the supplier operations are running smoothly. Taking into account the payments sector specifically, all payment providers must be managed efficiently in order for businesses to deliver the best checkout experience to customers.

For insurance, payments is a determining factor of customer retention. A poor checkout experience incentivises customers to look for the same service somewhere else and, with the wide range of insurance providers available, it is likely they might find an appealing offer. In order to offer great payment experiences, insurers need to leverage all of their PSPs (payment providers) in the most efficient way possible.

Some components of vendor management

Now that we have discussed the general benefits of vendor management and its relevance for businesses, we will dive into some of its components.

Provider selection

Selecting providers requires liaising with each provider and determining which are the most suitable for the business’s growth plan. Price and functionalities always play a part in this decision, so it is important to have a good idea of what each provider offers. Vendor management tools enable businesses to have a general overview of the providers available, and more easily analyse its compatibility to the business’s needs.

Provider onboarding

The onboarding process consists of gathering, analysing and signing all the documentation needed to finalise the contract. Though the contract is finalised between the two companies involved, a vendor management tool can help speed up the process.

Onboarding goes hand in hand with the actual deployment of the payment provider into your IT system (considering only payment software vendors). This deployment can be incredibly long, expensive and resource-wasting, especially when there is a lack of compatibility between IT systems and technologies. For instance, traditional companies have older IT infrastructure that makes it more difficult to integrate with modern technologies. Imburse does all the heavy-lifting of integrating to providers for you, ensuring you have full access to all payment providers and technologies in any market.

Provider performance

Once the selection and onboarding of providers is complete, it is time to fully optimise the relationships with providers, ensuring that everything is running smoothly and that all services are as cost-efficient as they can be. A vendor management tool can help you have a clearer overview of all the providers’ operations, which enable you to prevent potential disruptions, strengthen the relationships with current providers and reduce costs where possible.

How Imburse can help

Imburse is a cloud-based payments middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.