With the increasing pace of innovation resulting in an improved choice of products & services available in today’s market, it is not uncommon for technology focused service providers to be challenged in managing their vendor catalogues.
Poorly maintained Vendor catalogues can turn into a error ridden nightmare for procurement, product and sales teams, worst case resulting in inefficient and error prone quoting. This can result in significant profit leakage coupled with delays, rework and frustrated people.
It’s important for business leaders to have a fit for purpose Vendor catalogue strategy supported by “managed in” simple process with clear accountability. Sales, account and delivery teams must be serviced with accurate vendor product cost and pricing when generating client quotes.
Below are some common problems and themes associated with the vendor catalogue management process inside service providers:
Business Operation & Senior Leadership:
- Ownership and accountability for vendor catalogue management process
o Lack of accountability and responsibility amongst key stakeholders for managing vendor catalogues which creates ambiguity over job roles and responsibilities.
- Resource constraints
o Lack of resource who can commit to maintaining vendor pricing to service the rest of the business, more commonly lack of prioritisation.
- Vendor catalogue process definition
o Procurement, product management and sales teams are not conforming to a vendor catalogue management process or a common standard agreed within the business.
- Vendor catalogue process documentation
o An informal or documented process does not exist for the organisation to understand the vendor catalogue management process to service the product management and sales teams to quote and life-cycle for client solutions.
- Leadership investment to improve vendor catalogue process
o Lack of leadership investment to allow for supplier costs to be thoroughly examined by key members of the business with a project manager providing a clear set of objectives.
- Reactive vendor catalogue management
o Losing out on cost saving opportunities because the vendor catalogue pricing is not maintained well enough to ensure pricing is coming from the most appropriate suppliers. Usually this would be suppliers who have the highest level of stock at the cheapest price compared with other vendors.
- Outsourcing vendor catalogue management accountability to IT operational support
o Procurement team do not have a record of the vendor catalogues at all and rely on data and tech savvy individuals to update and maintain the pricing from suppliers.
- Outdated tools and manual vendor catalogue management
o Using outdated, friction riddled excel spreadsheets to update and maintain pricing with limited or no automation can lead to an increase in errors with the vendor catalogue product details and costs.
Sales & Accounts:
- Time to quote client solutions
o Delays with mobile phone calls and email chains between sales, Procurement and Vendor representatives to find, select and negotiate a price for client solutions.
- Integrity of vendor catalogue product details and pricing
o End of Life or retired products are not removed from the vendor catalogue portfolio which can result in sales quoting for vendor parts that are no long available.
o Lack of understanding regarding the sales logic or rules of sale for the vendor parts, can result in missing or even incorrect parts, maintenance and / or licenses
- Reporting and analytics for vendor catalogue product profit and loss o Unable to report on flow-through revenue and manage profit within the business.
o Unable to differentiate between managed service and Vendor hardware & maintenance costs.
o Do not have a business revenue reporting category which is consistently used in business systems.
3 Recommendations to improve your IT Procurement to Service Product and Sales Strategy:
1. Agree with senior leadership that there is a problem with the vendor catalogue management process.
o Document an As-Is view of the vendor catalogue management process and share this with key senior stakeholders to address the challenges.
o Develop a simple To-Be process to identify who WHO does WHAT and WHEN throughout the vendor catalogue management process.
o Ensure unambiguous accountability and responsibility with a clear process to ensure the steps are effective and repeatable.
2. Seek third party expert advice for an independent review of your vendor catalogue process, the people involved and any tools or systems that are used to facilitate this process.
o We recommend that you read our ViVO (Value in, Value out) services and get in touch with us so we can assess your current state and advise you on your next set of actions.
Below is an example of some deliverables which we can offer:
o Vendor catalogue centralisation and management
o Develop a RACI process and visual process models to share with the key stakeholders
o Providing a detailed breakdown of the main activities in the process which include how to:
o Edit an existing vendor catalogue
o Decommission / replace existing vendor catalogue items
o Add new vendor products into existing vendor catalogue
o Remove and propose a new vendor catalogue
3. Embrace technology to streamline procurement's ability to service sales
o Remove the manual administration for procurement and allow vendor catalogue management activities to be carried out inside a centralised portfolio with restricted user access rights.
o Consider integrating with supplier/vendor portals, API or web services to manage supplier catalogues more effectively.
o Enable sales teams to search from thousands of SKU’s and quote customers with accurate product and cost information with automated notifications for when parts are going EOL or EOS.
o Simplify the sale of complex offerings through standardisation and using systemisation to automate logic to better guide sales in quoting accurately at speed.
o Carefully assess the applications available on the market. Use industry recognised software applications designed specifically for IT re-seller and IT managed service providers to increase operational efficiencies and increase the time and accuracy of client quotes. We recommend that you check out www.servicepath.co who are solely focused on helping IT service providers with Product management to Configure, Price and Quote.
NOTE: Process owners play a fundamental role in helping you to operate in a standardised fashion with the support of key stakeholders. The systems are here to facilitate the business processes in order to better equip BAU operations to achieve business goals aligned to a global shared vision. For further advice and recommendations, please get in touch – https://www.vendira.co.uk.