Why is provider management important?
Provider management is important for several reasons:
- Provider management plays a key role in selecting the right provider for a particular business need.
- Provider management can help achieve business goals, such as leveraging cost-saving opportunities and taking steps to accelerate the onboarding process.
Providers must also be effectively managed to reduce the risk of supply chain disruption and ensure that goods and services provided are delivered on time and to the expected standard. Beyond this, an effective provider management process can help companies build stronger relationships with their providers, which in turn can lead to opportunities to negotiate better rates.
What should Provider Management include?
A good Provider Management process should allow:
- Identify and manage critical contract terms.
- Establish a solid governance framework for providers and supporting processes.
- Resolve contractual disputes using available solutions and contract resolution processes.
- Establish processes and tools for continuous monitoring of performance and service level agreements.
- Validate the delivery of key contractual obligations, milestones, and deliverables.
- Identify and implement strategies to address service and performance deficiencies.
- Continuously assess the long-term health of the relationship, as well as alternative offerings available in the market.
- Encourage the provider to maintain a high level of service through the application of best practices and new technologies.
- Evolve the provider relationship from a purely transactional relationship to a strategic partnership.
- Continuously manage the provider environment to maximize leverage and identify the preferred provider for each additional acquisition.
Once the contract is signed, the management and guidance of provider relationships begin in a structured manner to drive positive outcomes and optimize business results.
Benefits of provider management
Establishing a solid Provider Management program allows you to develop strategic relationships that strengthen both the client and the provider, while avoiding the loss of value that often occurs as the contract lifecycle progresses.
- Improve provider selection
- Leverage cost savings
- Accelerate provider onboarding
- Reduce the risk of supply chain disruption
- Strengthen relationships with providers
- Negotiate better rates.
Provider management is the foundation for extracting value from your company’s contracts. At IT Experts, we help you select the best providers to optimize your business and competitiveness.
