You’ve likely been sold the benefits of SaaS or the cloud for every possible scenario faced by an IT department. And, depending on your view and your specific department, will have either dismissed or embraced these options as appropriate.
While it’s true that you can’t manage every aspect of an IT department in the cloud, contract management is one area you definitely can.
And while it’s also true that every part of a business runs on its contracts, given the high turnover of projects, prevalence of contracted resource and business criticality of the department, this is particularly true of IT.
So what in particular makes SaaS cloud-based vendor management solutions a great fit for IT departments?
Here are five good reasons to adopt a vendor management platform:
1. Implementing your vendor strategy effectively.
Some business departments have the luxury of not requiring a full vendor strategy, such is the small volume of vendors and contracts they are dealing with. For a high-functioning IT department however, this is a core priority.
Whatever your specific strategy for managing vendors, maintaining tight control and oversight of your supplier list is vital.
Your approach may be to tightly limit your vendor set by minimising overlap and working only with specific, trusted partners.
Key to this is tracking who does what, what they cost and their ongoing performance.
Alternatively, you may be looking to benefit from competitive arrangements with your chosen partners, in which case you have the same requirements but rather than making sure you have a minimal number of vendors in place, you’re instead looking to introduce multiple vendors in each category.
Any variation of these strategies will require those categories to be tightly controlled and monitored.
This is one of the key functions of a cloud vendor management solution.
Why “cloud” specifically?
Well, vendor relationships are naturally collaborative and have to function across different internal departments, different external businesses and potentially multiple geographies.
Providing the solution’s security credentials are up to scratch, this can be made simpler by adopting cloud technology and allowing access via the web, using any device.
2. Gaining maximum value from signed agreements.
There are several different reasons for this and they can’t all simply be solved by having a technological solution in place.
However, if you have clear procedures in place that ensure contract details such as value, key dates & contacts, vendor compliance status and obligations are captured systematically, then the technology can be deployed to manage the processes effectively.
The result is that poor performing vendors are identified and remedial action can be taken sooner.
Meanwhile, vendors that are delivering in line with, or above, expectations can also be identified and best practice shared from them to others.
3. Speed to implement
The SaaS vs On-Premise argument has run and run and, over time, the case against SaaS has declined as the resilience and security offerings of the cloud have improved in particular.
One consistent fact throughout though has been that SaaS is quicker to implement. In some cases, it’s as quick as entering your credit card details.
With the average on-premise deployment taking anywhere from 12-24 months, there’s plenty of headroom for a SaaS solution to work in when it comes to a comparatively rapid deployment.
In the case of vendor management, it wouldn’t be an instantaneous deployment. There will be a necessary implementation period where data has to be assembled and uploaded, as well as the configuration of the system and related training.
However, that can still be completed in a fraction of the time of the alternative on-premise deployment.
The quicker you can get up and running, the sooner you can start benefiting from superior vendor management, reduced supplier costs and better ongoing compliance.
4. Resource Management and Costs
Not only can your SaaS solution help reduce vendor costs by identifying areas for consolidation but faster speed to deployment means lower internal costs in the form of IT resource.
With resource needing to be deployed where it is most urgently required or where it has been identified as offering the best ROI, eliminating the need for it to be used for a particular project has distinct advantages.
One less project that needs to be prioritised allows for other initiatives to be pushed through.
A SaaS deployment not only saves resource in the short term by avoiding the need for significant implementation support but also in the longer term by having minimal (generally zero) cost for ongoing updates.
If your priority is running a lean department, then adopting a SaaS vendor management solution has twin benefits:
- The comparatively small amount of resource required to implement and maintain it.
- The power to automate processes, including vendor registration, to keep resource focused on more important tasks.
The second of these two benefits can also be helped greatly by using a self-service vendor portal.
Not only can vendors be proactively managed via the portal but by delegating responsibility for registration and for keeping vendor records up to date (eg. compliance status) to your vendors themselves, you remove significant administrative work from your own team.
5. Central, Accessible, Auditable Record Keeping
Having contract information easily accessible not only allows for good decision-making it also saves significant amounts of time that would otherwise be spent on contract admin.
Use of RBAC and permission-based access will allow for the appropriate IT or vendor stakeholders to securely access the information that they require in order to self-service, such as for checking vendor details or updating compliance status.
This level of transparency also increases the chances of heading off the risk of ‘Shadow IT” developing. Clearly, it’s not going to eliminate the desire for people to self-serve and bypass IT if they want to but it will remove “I wasn’t aware” as an excuse.
As well as sharing the details of vendors across the business, this same delegated access is useful for sharing costs and financial information with relevant departments such as Procurement and Finance, and at C-Level.
IT teams can often be accused of being closed off from the rest of the business. By creating this open, central resource for vendors and contracts, this helps to address this and remove it as an issue.
As we’ve said already, just because something can be managed via a SaaS solution, doesn’t mean that it necessarily should be.
However, in the case of vendor management, there are clear benefits to doing it this way.
Putting aside the method of deployment for a moment, the need for rigorous vendor management in IT departments is clear to ensure that budget and resource are used in the best possible way.
While it would be conceivable to build a vendor management solution using internal resource, it would also need to be prioritised against other projects. Deploying an on-premise software solution would also require significant resource to accomplish.