These annual assessments of the vendor relationship focus on overall satisfaction with the vendor as well as whether the manager wants to continue the relationship. This formal review tends to include:
- Evaluation of incidents
- Consideration of billing issues
- An overall look at the regular operational reviews
- The vendor’s criticality and potential level of risk to the organization—including changes and evaluation of appropriate responses to those changes
In addition to these more quantifiable metrics, managers should also assess the vendor quality, including responsiveness, available training, knowledge, and competence of vendor contacts, consistent delivery of promises, a dedication to innovation, and a commitment to remaining competitive.
Details from the vendor and its processes are also key to assessing the level of risk and criticality. A questionnaire can be sent directly to the vendor, and the documented responses can be combined into an overall score or can be tied to findings based upon specific responses. The formal relationship review is best completed in advance of contract renewal dates since data from this review is directly correlated to the decision to renew or not. If the vendor relationship is to be terminated, there needs to be time to research and bid on other vendors.