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Leaders and Competencies

Essential Skills Non-IT Organizational Leaders Need for Successful Vendor Management

As a business leader and stakeholder, you can expect your IT department to provide you with training to become proficient in using the tools. The IT knowledge necessary in this scenario can be likened to starting your day by logging into your computer, identifying the task you need to complete, and arranging the steps in the proper sequence. Your expertise is needed in the information you provide. In addition, IT leadership turns to you and your staff for suggestions on how to improve the system and to report any issues encountered with the vendor process.

Service-level agreements (SLAs) are used in business to define vendor expectations. The SLA includes the service the vendor provides and any metrics to measure uptime, downtime, and response time. The agreement should also include penalties the vendor will incur if these expectations are not met. As a leader, understanding the SLA and its components is critical to business.  

Many vendors have initial response times for critical issues and non-urgent requests (Overby et al., 2024). These time frames get written into the SLAs. Conversely, the vendor may seek improvements such as dashboards and software upgrades to enhance and evaluate performance, thereby fostering a stronger business relationship. Given the ongoing nature of the vendor relationship, the management of SLAs will persist. Establishing a regular cadence for SLA reviews will prove advantageous in ensuring alignment between business requirements and organizational goals for all stakeholders.

Although it is crucial for organizational leaders to engage in continuous learning, it is not the sole factor. The primary focus should be on encouraging team development, which can be achieved by ensuring that the IT professionals have unrestricted access to the most up-to-date training and certification pathways in areas such as procurement, compliance, risk management, and more. It is crucial for the team members, as experts in their field, to adeptly navigate the complex waters of the IT landscape. Keeping up with regularly emerging best practices is one of the most effective ways to do so. The leader’s arsenal is bolstered by a well-trained team, whose ability to swiftly identify and address risks, adhere to compliance standards, and shield the organization from potential legal, ethical, and financial consequences is unrivaled (van den Hout, 2021).

In order to enhance their flexibility, manageability, and profitability, businesses are actively seeking quality supplies, services, and resources from the global marketplace. There is considerable value in building the right vendor relationships across the globe to sustain the business and push toward innovations to set the company apart from the competition. Therefore, global networking and vendor interaction are overarching skills that help foster the strategic collaborations needed to drive business.

Road maps for the future are skillfully crafted by leaders to ensure the success of their organizations. The strategic plans not only provide guidance on fostering long-term partnerships with vendors to ensure business sustainability, but they also explore the business’s aspirations and conduct a thorough analysis of the strengths and weaknesses of each partner (Matlis, 2019). Align and innovate for sustainability and to boost business for the future (Staubitzer, 2022). Remember that vendors help enable the organization where it was once limited. Collaboration begins with being direct with the vendor about business needs. As a leader and stakeholder, actively managing the relationship, ensuring timely vendor deliverables, and promptly addressing vendor requests can enhance the value of the vendor interaction.     

Since non-IT leaders are constantly learning, they may occasionally make errors in navigating the complexities of vendor management. Needless to say, experiencing these challenges is an integral part of the learning process. In order to minimize errors and gain diverse perspectives, organizational leaders could involve external stakeholders in the evaluation of vendors, rather than solely relying on the IT department for key decisions pertaining to vendor management. For example, non-IT leaders can gain an advantage within the team by conducting third-party evaluations of short-listed vendors to assess performance, reliability, goal-alignment, risk, etc. 

Additionally, gathering customer feedback to understand customer satisfaction levels, response time, and troubleshooting is another effective approach. Furthermore, reviewing the financial health of key vendors through independent audits conducted by external accounting firms is crucial for making informed decisions and ensuring long-term viability.