Optimize Your ROI

When I discuss vendor management best practices with CFOs and other business leaders, the dialogue ultimately turns to cost. With firms continually looking to do more with less, it is often difficult viewing added rigor to sourcing and oversight practices as anything but another expense.

After all, things feel like they are working pretty well as-is, right? The challenge with vendor management and similar risk management functions is defining and measuring their value. What is the ROI?

The ROI of Vendor Management 

In the strictest sense, return on investment in these functions is the ratio of savings to cost. Current generation vendor management, however, goes well beyond the potential savings realized by mitigating operational, credit, reputation and legal risks. Actual bottom line savings is captured through a program that is centralized, proactive, scalable and efficiently administered.

Furthermore, a strong VMO platform can drive the kind of top line growth that is possible through heightened clarity, better focus, greater control and the confidence to leverage external partners to effect change and capitalize on business opportunities.

In the final assessment, a solid vendor management program is not only a sound strategy, but a self-funded asset that helps keep you innovative and compliant while freeing resources to focus on mission critical objectives. What is an inadequate VMO costing you?