Why vendor management should be your first investment in procurement digitisation

In today's rapidly evolving landscape of capital and asset-intensive industries like construction, mining, critical infrastructure and utilities, procurement leaders find themselves at a crossroads. The pressure to digitise procurement processes is mounting, but with limited budgets and a dizzying array of options, the path forward isn't always clear.

Do you invest in an all-in-one procurement suite, nd risk navigating a monolithic, large-scale transformation with an exhaustive implementation cycle, as well as considerable costs and time to value realisation, promising to revolutionise your entire process overnight? Or do you opt for a point solution, addressing a specific pain point but potentially creating new silos? Perhaps you're tempted to maintain the status quo, relying on tried-and-true (albeit manual) methods to keep the gears turning.

As you weigh these options, consider this: what if there was a foundational investment that could set the stage for procurement success, regardless of which path you ultimately choose?

Enter comprehensive vendor management.

In this article, we'll explore why prioritising vendor management—specifically with a solution like Felix—isn't just another option on the table. It's the cornerstone upon which all other procurement processes can be built and optimised. Whether you're considering a complete procurement overhaul or a step-by-step digitisation journey, here's why vendor management should be your first and most crucial investment.

The foundational nature of vendor management

Think of vendor management as the bedrock of your procurement processes. Without a solid foundation, even the most advanced sourcing or contract management tools will falter. Here's why:

- Data integrity: Vendor management ensures you have accurate, up-to-date information about your suppliers. This data feeds into every other procurement process.

- Risk mitigation: By prioritising vendor management, you're putting risk mitigation at the forefront. In capital-intensive industries, where a single vendor failure can derail million-dollar projects, this is crucial.

- Compliance first: With regulations tightening across industries, starting with a system that ensures vendor compliance can save you from costly legal issues down the line.

Felix's comprehensive vendor management solution doesn't just tick these boxes—it excels in them, providing a robust foundation that other point solutions simply can't match.

The cost of delaying vendor management digitisation

Many organisations fall into the trap of digitising other procurement processes first, leaving vendor management as an afterthought. This approach can lead to:

- Spreadsheet chaos: Without a centralised vendor management system, you're likely drowning in what we call a “spreadsheet-y” situation —inefficient, error-prone, and time-consuming.

- Compliance nightmares: Manually tracking vendor compliance is a high-risk approach—expired insurances or certifications can lead to project delays or legal issues at any time.

- Missed opportunities: Without comprehensive vendor data, you're making sourcing decisions based on incomplete information, potentially missing out on better-suited suppliers.

By prioritising Felix's vendor management solution, you're not just avoiding these pitfalls—you're setting the stage for more effective procurement across the board.

The ripple effect of strong vendor management

In contrary to the above, investing in vendor management first creates a positive ripple effect across all procurement processes:

- Smarter sourcing: With Felix's comprehensive vendor profiles and performance tracking, your sourcing decisions become data-driven and strategic.

By having sourcing/tendering capabilities connected to the vendor management piece, rather than implementing sourcing first and addressing vendor management later, you ensure that all your procurement processes are built on a solid foundation of accurate, up-to-date vendor data. This connection allows for intelligent vendor matching based on location, goods, and services, as well as the ability to easily add relevant vendors to your sourcing events. The result is a more efficient, streamlined procurement process that leverages the full potential of your vendor database.

- Streamlined contracting: Felix's vendor management seamlessly feeds into contract management, ensuring all vendor information is accurate and up-to-date when setting new contracts right through to executing contract administration processes.

- Efficient onboarding: Felix users report up to 70% faster vendor onboarding. This efficiency frees up resources for other critical tasks.

Future-proofing your procurement strategy

In rapidly evolving industries, future-proofing is crucial. Here's how prioritising vendor management with Felix sets you up for long-term success:

- Scalability: As your organisation grows, Felix's vendor management scales with you, unlike manual processes or limited point solutions.

- ESG: More compliance requirements are on the horizon, meaning you need a system that can adapt to new legislations as they come into play. Felix offers the flexibility to capture ad hoc information from vendors, configure vendor questionnaires to include ESG-related inquiries and more.

- Integration ready: Felix's APIs and integrations ensure that as you add other tools in the future, your vendor data will seamlessly connect.

The ROI of prioritising vendor management

When budgets are tight, ROI is king. Here's why vendor management, especially with Felix, offers the best bang for your buck:

- Immediate efficiency gains: From day one, you'll see improvements in vendor onboarding, compliance tracking, and data management.

- Risk reduction: By preventing compliance issues and improving vendor selection, you're potentially saving millions in avoided project delays or failures.

- Strategic insights: Felix's comprehensive vendor data provides valuable insights that can inform broader business strategies, not just procurement decisions.

While other procurement tools might offer flashier features, few can match the fundamental, wide-reaching impact of a strong vendor management system.

Industry-specific advantages

Having built the platform from the ground up for capital and asset-intensive industries, Felix has a strong track record of helping reputable industry leaders manage their supply chain.

- Network effect: Suppliers in the market may have already been onboarded with multiple contractors, which helps with change management.

- Project or asset-led downstream processes: With a strong vendor management foundation, non-procurement teams such as Operations can use Felix’s multi-site or multi-project setup with confidence.

Multi-project setup in Procurement Schedule

Conclusion: start with the foundation

In the journey of procurement digitisation, it's tempting to chase the latest trends or focus on the most visible processes. However, the smartest investment you can make is in comprehensive vendor management.

By prioritising vendor management—especially with a solution like Felix that's tailored for capital and asset-intensive industries—you're not just improving one aspect of procurement. You're laying a foundation that will enhance every procurement decision, streamline every process, and set your organisation up for long-term success.

Want to see Felix's vendor management system in action, feel free to get in touch.