Building a preferred vendor program can benefit all parties concerned, including the individual planner. Cisco Systems’ Michele Snock suggests the following steps to launch a program:
- Find out with whom you are doing business. This requires the collection of spend data. This step probably will require finding someone in leadership to get behind the effort.
- Send out Requests for Information (RFI) to various venues. Follow up with RFPs to those you identify as possible program members.
- Elevate vendors who are willing to grant cost reductions and fulfill organization requirements in regard to insurance and risk issues to a preferred status. In turn, you can promise to steer business market share to them.
- Encourage and influence associates to use your preferred suppliers. If the organization has a mandated culture, you can require it to use designated suppliers, at the same time you demonstrate why this makes good business sense and affects the organization’s bottom line.
- If there is a difficulty getting compliance, make it challenging to get invoices from non-preferred vendors paid.