Business Operations Resource Center

How to Manage Business Vendors

Vendors can affect quality, security, customer promises and business continuity. Manage the relationship as an operating dependency, not only a purchase.

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Select with clear criteria

Compare capability, reliability, security, capacity, references, price and fit against documented requirements.

Verify important claims
Assess financial stability
Check conflicts

Use clear agreements

Document scope, service levels, pricing, ownership, confidentiality, security, change control and termination.

Define acceptance criteria
Address data return
Record responsible contacts

Monitor performance and risk

Review quality, delivery, incidents, costs and contract obligations, with alternatives for critical suppliers.

Use a vendor scorecard
Track renewals
Prepare a backup supplier

Frequently Asked Questions

Questions About How to Manage Business Vendors

Should the lowest price win?

Not automatically. Consider total cost, quality, reliability, risk and the consequence of failure.

How often should vendors be reviewed?

Use a schedule based on importance and risk, with additional review after incidents or major changes.

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