Based on a lot of dependencies on third parties and vendors within the programs and projects, vendor management is seen as a key process which has to be managed right the first time and should be monitored and controlled during the phases. The idea is to manage vendors on service and quality, cost efficiency and within the timeframes contracted as per the service level agreements. Clearly established goals, objectives and performance perimeters defined and monitored. A complete process of vendor selection should be developed based on the sourcing principle. Effective vendor management results in controlled costs, service excellence and controlled risks. The proven new phenomenon is to create closer and more collaborative relationship with key suppliers.
Clearly approved agreements for deliverables/services from vendors including scope definition, SLA schedules, costs, and duration and acceptance criteria should be monitored. In case of project tasks/deliverables outsourced to vendors, periodic supplier progress report should be received and monitored. Any risk, issue, assumption and dependency by the vendor should be a part of project RAIDs. Vendor budgets should be set aside and monthly forecasts should be processed. Overall vendor cost efficiency and effectiveness is one of the key themes of vendor competitiveness other than quality.