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4 Vendor Management Tips for a Successful Outsourcing Partnership

by: Sidney Liquigan

Thursday, November 16, 2017 |

According to Gartner, vendor management is "a discipline that enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal life cycle."

For an outsourcing partnership to work, there are things that both your company and your vendor or service provider should take into consideration. Successful vendor management is not how you are able to get the lowest price or a really good deal. Vendor management is about working and communicating with your outsourcing provider to make arrangements that are valuable to both parties.

Tips for a successful outsourcing partnership

Here are some vendor management tips for a mutually successful outsourcing partnership.


Having a clear communication with your outsourcing vendor allows them to serve you better. You don't have to share all confidential information, but just enough to avoid misunderstandings. Share with them key business strategies that involve the product or project they are working on so they can also gain some insight that they can apply in the work that they are doing for you. For your security, make sure that you have a non-disclosure agreement (NDA) signed with your outsourcing vendor.

Communication and Collaboration

It is also important that both parties know and understand each other's priorities. Let the vendors know exactly what you need and give them enough information to allow them to provide the best solution for you. In turn, your vendor should also let you know what you can expect from them and the turnaround time. These concerns should be settled before signing a contract. The scope of work and the timeline must be clear.

Set up regular communications and project management arrangements with your vendor to ensure that agenda and priorities are monitored and on-track. Communication can be done through email and messaging platforms such as Slack or Skype, while agenda and deadlines can be managed through project management systems such as Asana.

Offer Commitment to Gain Commitment

A successful vendor management is when you form an outsourcing partnership with a vendor who will commit to helping you reach your business goals and priorities. In turn, you must also be willing to give your vendors your commitment to work with them. This doesn’t mean that you will agree to their pricing right away. It simply means that both sides should reach an agreeable rate that is reasonable and competitive.

Long-term Partnerships

Building a long-term outsourcing partnership can save your more money than constantly changing vendors to look for a cheaper solution. A long-term partnership means consistent service quality. Trust is also stronger with this kind of relationship. Further, it is also easier to reach agreements with a long-term partner that already understands your business, and on the same hand, a partner with a system that you understand and has been customized to adapt your processes.

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