As software defined networks continue to replace traditional WANs, managing vendor relationships becomes vital for success. That can be easier said than done, unfortunately. These strategic relationships require a foundation built on constant communication, data and solid tracking in order to work and to enable you to gain the benefits and performance you expect. Success requires a clear understanding of the market and strategic creativity to identify opportunities for new ways of doing business with vendors. When a business takes the time — and is able — to aggregate data from daily vendor management activities along with data industry benchmarking data, it provides a detailed view of the sourcing relationship and identifies areas for improvement.
Sourcing activities in complex supplier relationships can be manually intensive, complicated and expensive. Many enterprises believe they are heavily invested in this area, but most are underinvesting and unaware of the value they are losing by not being able to capture all the moving parts of the sourcing puzzle.
Here’s a useful checklist we use at Network Control to help govern vendors and our customers’ provider ecosystem:
Most enterprises fall short on understanding that they need to stay on top of their vendors quarterly (or even better, monthly) to be assured that expectations of the contract have been met. Reviewing and confirming compliance allows both parties to show commitment and accountability to each other, which in turn builds trust. The challenge for most companies, however, is that they don’t have the expertise, staff or time to do this. The most effective way to ensure contract compliance is to put that task in the hands of a TEM provider who has the skills and knowledge to manage this oversight.
A competent change management team to administer necessary changes in the contract – from requests through redlines to approval and execution—is essential, but rarely managed effectively internally. A TEM offers this solution to ensure successful outcomes.
As with contract changes, issues need to be identified early on and dealt with constructively. But contracts are complicated and confusing, so rarely managed well internally. A TEM will work with the business to capture, address and resolve issues at the appropriate level, which will ensure a smooth relationship and ensure that the expected value is being gained.
A contract governance library which contains a record of all communications and records associated with a contract over its lifecycle is critical. When enterprise executives have this single source of truth, they can eliminate the need to reconcile differences based on inaccurate information and gain the transparency they need to make fact-based decisions.
Service charges can be highly complex and prone to errors, and billing can often be inaccurate as a result. A TEM can offer expertise and inventory control to validate that calculations and invoices match your contract. The inventory database allows a quick way for detecting and addressing discrepancies, contracts, and errors which saves time and money.
Established procedures are critical for anyone involved in the contract process and relying on a TEM can reduce expenses and increases efficiency. Having a contract library in place to deal with a multi-vendor ecosystem helps maintain best practices and provides a baseline for accountability expectations.
Keeping these contracts and addendums in compliance can best be achieved with a TEM contract lifecycle management platform rather than an internal accounting system designed for more general-purpose use. Setting up templates and approval workflows solidifies and simplifies processes across an enterprise. Access rights and organizational structure ensures all users can only see and create the documents they need to.
Contract managers often have hundreds of contracts they are responsible for managing, so optimizing workflows and information access are critical. Implementing a specialized TEM contract lifecycle management platform ensures a clear audit trail and a single source of “the truth”.
New technologies present new opportunities for communications and efficiencies within businesses in every industry and of every size. But with these new opportunities comes new challenges, and those challenges are more complex than in the past but not all that different really: managing vendor relationships, confirming contract compliance, identifying errors and ensuring expected value is being received. Some companies can manage this effectively in house, but at considerable cost in terms of time and resources. Most enterprises have neither the staffing or the expertise to take this on (whether they know it or not) and working with a TEM relieves internal pressures while ensuring an accurate, efficient process.