How to Develop a Successful Vendor Onboarding Process
What is Vendor Onboarding?
Vendor onboarding is an important part of the vendor management process which consists of a detailed and stringent evaluation of the information provided by the prospective vendors before their association with the company is approved, assessing the vendor-related risks to minimize the occurrence of any compliance-related issues with government mandates or company internal processes and the subsequent integration of the vendors with the company platforms in an efficient and foolproof manner to ensure improved business outcomes.
Steps For Developing A Successful Vendor Onboarding Process
Following steps need to be implemented to ensure a smooth and successful vendor onboarding process.
The procurement department needs to clearly establish the policies and criteria on which vendors are going to be assessed and evaluated and assign responsibilities to the team for this purpose. Also, the kind of contracts that need to be signed and enforced, quality and service requirements and expectations from the vendors also need to be framed beforehand. Having crystal clear policies and expectations will not only help in quick and systematic vendor evaluation but also help vendors in clearly understanding what is expected of them.
Creating A Vendor Self-Service Portal
Setting up a vendor self-service portal that helps vendors in registering themselves for offering their services to a company is the first step in creating a successful vendor onboarding process. Vendors can each submit all the required information and documentation required for their evaluation and companies can quickly verify and scrutinize the information for a faster process. The vendor self-service portal also helps in billing, effective communication and collaboration with the procurement team subsequent to their acceptance.
Vendor Approval And Onboarding
After the information submitted by the vendor through the self-service portal is duly scrutinized and verified, the vendor-related risk evaluation is carried out where the technical and service capabilities of vendors are considered, their ability to fulfil the quality expectations and compliance with various government and company mandates are also assessed. After carrying out the necessary due diligence process, the vendor is accepted to supply the specified goods or services. The necessary documentation in the form of contract signing and training of vendors is also carried out.
Relation Building And Performance Evaluation
After the vendor has been successfully integrated with the procurement department of the company, various processes and procedures are implemented for ensuring transparency and trust in all dealings between the company and the vendors. Relation building with vendors is an important process that reaps huge benefits for companies as a good relationship with all its vendors ensures that companies are able to secure best possible goods and services at the most attractive price.
Simultaneously, the performance of vendors is evaluated comprehensively on all aspects related to quality, compliance and timeliness of services among others and vendors are given ratings as per their performance. Vendors with great ratings are given first preference over others by awarding them more work and renewing their contracts promptly.
Contract Conclusion And Renewal
As stated above, vendors who get good ratings are preferred for contract renewal. Vendors who fail to secure the minimum ratings are not considered for contract renewal and the deboarding process for such vendors is initiated.
Importance of Smooth And Systematic Vendor Onboarding Process
A smooth and systematic vendor onboarding process is essential for effective and efficient vendor management and is greatly beneficial for companies. So, just as companies give due importance to managing client relationships, they are also recognizing the need and benefits of managing vendor relationships to build a strategic partnership with them. The importance of implementing great vendor management and vendor onboarding processes is listed below.
- Mitigation of vendor-related risks
- Streamlining vendor management processes for increased efficiency
- Ensuring compliance with government regulations
- Creating and enhancing company brand image
- Increase in ROI
- Increased visibility in all related vendor management processes
- Access to the latest data for key activities in vendor management
- Better tracking and evaluation of vendor performance
- Nurturing vendor relationships
Using Axonator To Develop A Successful Vendor Onboarding Process
Axonator vendor management system is proving to be a great choice for companies who wish to streamline their vendor management processes and implement a successful and efficient vendor onboarding process for greater speed and accuracy. Creating a centralized repository where all the information related to vendors is stored and easily accessed is achieved by using the Axonator vendor management software.
In addition, the creation of a vendor self-service portal is simplified and made systematic by using the Axonator vendor management software app. This helps companies to implement a faster, easily accessible and simple to use platform for vendors where they can easily provide all their information and documents related to their registration. After acceptance, vendors can easily communicate with the procurement team of companies for billing, invoicing, quality control, compliances and various other uses.
Axonator vendor management software ensures that companies get all the benefits of a systematic and structured vendor management and implement a successful vendor onboarding process to ensure improved business processes and increased profitability.