How Does Vendor Management Work?
Definition
Ongoing relationship management with vendors post-contract, including performance monitoring, contract compliance, issue resolution, and strategic partnership development. Vendor management encompasses regular business reviews, SLA tracking, escalation management, renewal negotiations, and continuous improvement initiatives. Effective vendor management ensures vendors deliver contracted value, maintain service quality, and adapt to evolving organizational needs throughout the relationship lifecycle.
Why This Matters
Vendor relationships extend years beyond implementation. Without ongoing management—performance monitoring, SLA tracking, escalation, renewals—vendors drift toward minimum acceptable service. Effective vendor management ensures continued value delivery, service quality maintenance, and partnership evolution to meet changing needs. Organizations with structured vendor management programs achieve 15-25% better outcomes than those managing vendors reactively.
Related Terms
Showing semantically related terms from our RFP knowledge graph. Priority connections are highlighted.
Essential Connections
Vendor Onboarding
Pricing & Total Cost
The structured process of integrating a selected vendor including contract execution, system access provisioning, stakeholder introductions, kickoff meetings, and project plan finalization.
Service Level Agreement
Pricing & Total Cost
Contractual commitments defining expected service quality including uptime guarantees, response times, resolution timeframes, and penalties for non-compliance.
Contract Management
Software Features & Capabilities
Software managing contract lifecycle from creation through renewal including template libraries, approval workflows, e-signature, obligation tracking, renewal alerts, and repository search.
Vendor Assessment
Vendor Management & Evaluation
Systematic review of vendor capabilities including product demos, reference checks, security audits, financial stability analysis, and roadmap evaluation.
Technical Support
Implementation & Deployment
Vendor assistance for troubleshooting, bug fixes, and system issues provided through ticketing systems, phone, chat, or email.
Contract Lifecycle
RFP Fundamentals
Contract stages from negotiation through renewal or termination, including execution, performance monitoring, amendments, and closeout.
Vendor Selection
Vendor Management & Evaluation
The systematic process of evaluating and choosing software vendors based on product capabilities, security compliance, implementation support, company stability, and pricing.
Contract
RFP Fundamentals
Legal agreement between buyer and vendor defining terms, pricing, deliverables, responsibilities, and termination conditions.
Customer Success
Implementation & Deployment
Proactive vendor support ensuring customers achieve desired outcomes through regular check-ins, usage analytics, optimization recommendations, and renewal management.
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