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6 Ways to Ensure Effective Vendor Management

By: Daniah Nair



When outsourcing was initially introduced to the corporate sector, it was revolutionary. Fast forward to the present time and outsourcing is a standardized process for businesses. If you look at current job openings in the Tech sector, companies like InstaCart, Facebook, or even Robin Hood show the need for a skilled Vendor Manager to manage their outsourced business.

In my niche area of customer operations, I work with companies to effectively outsource their customer service operations. I’ve seen business process outsourcing from every side, and have compiled a list of critical areas one needs to focus on to succeed as a Vendor Manager. Here are the highlights:

1.Contract and SLA Clarity

As a vendor manager, be sure you have read and digested the vendor management contract between your organization and the outsourced company (BPO). Be clear about the agreed Service Levels (SLAs), Key Performance Indicators (KPIs), and any other promises the BPOs will deliver on. If you get to be part of the contract negotiation, work to ensure that SLAs are realistic.

2.Data Reporting

Ensure a specific internal Vendor Manager dashboard with key metrics for the agents is created by your organization. Monitor this daily to ensure performance is optimal. Also, work with your BPO to ensure they send you weekly updates based on mutually available data to ensure you are operating, improving, or pivoting based on the same set of information. Finally, focus on your customer survey data and ensure you are getting the right insights from your customers. If after a certain point you think the survey form needs to be modified, go ahead and make the necessary change(s).


Work with the BPO’s training team to ensure that the trainers assigned to your business are well versed in the products and specific issues of your business. As the agents progress, look at your data for topics agents struggle with and ensure those are managed in training.

4.Stakeholder Management

To showcase your ability to manage a BPO well, it is important to schedule Quarterly/Monthly Business Reviews (QBRs/MBRs) with upper management. This is where you and the BPOs present slides or reports outlining how the business has been progressing. This is the opportunity to talk about future business opportunities, upcoming changes, and improvements that will be beneficial for the business. QBRs and MBRs that are done in partnership with BPOs help to build a solid relationship and ensure that the BPO’s management team is always rooting for you to succeed.

5.Process Improvement

One key goal as a vendor manager is proactively look for areas within the business that can be improved. Some areas that may be fruitful include: focusing on potential business process automation, reducing customer outreach for select issues, and looking at improving quality standards.

6.BPO Appreciation

Agents love to be appreciated, and when gifts or coupons are given to them from the main office and not the BPO side, it is even more appreciated. Try to visit the agents where they work to foster a positive relationship. During QBRs and MBRs try to get some of your team to visit the site and show appreciation in person. This has proven to be beneficial in increasing motivation and productivity among the BPO team.

In essence, if you can do the six things mentioned here as a Vendor Manager, you’ll be off to a strong start. Feel free to use the points mentioned here for your job interview because the points shared here will show that you know what it takes to be an effective vendor manager. I would love to know your thoughts on this article and feel free to reach out on any other topics that you might want me to write on.

Published: May 11, 2021

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Daniah Nair

Daniah Nair is the founder and partner of KDN Consulting LLC. She helps companies solve problems with their business processes that are outwardly visible and customer impacting. From her experience and success working with corporations in the East and West, she wants to share her knowledge with the wider community through her writing. Her expertise includes quality, compliance and regulatory preparation, BPO management, data analytics, project management, and organizational change management.

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