Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. This week, I’ll be reviewing a whitepaper entitled “Vetting Vendors From a Procurement and Vendor Management Perspective” from Gartner and CFO.com.
This whitepaper focuses almost exclusively on the sources of information a procurement professional can use to determine the ongoing viability of a vendor. Here are a few of those sources and what the whitepaper had to say about each…
- Dun & Bradstreet, Hoover’s, Standard & Poors, and others: The whitepaper points out that these sources report on the creditworthiness of vendors but cautions that the information may be self-reported or dated.
- Stock performance: Stock prices and direction are indicators of the degree of confidence that the market has in a vendor. The whitepaper does point out that stock performance reflects an investor’s perspective and not a customer’s – a vendor can be financially successful while not being as customer-friendly as one may expect.
- Analyst enterprises (for example, Gartner): The whitepaper extols the benefits of getting information from analysts whose “breadth of customer interactions” allow them to offer unique insight into a vendor. While the whitepaper doesn’t list any downsides to relying on analysts, I will say that one should never assume that an analyst or advisory firm is an expert in every market or on every vendor – they are not, plain and simple. Plus, there may be an underlying conflict of interest as vendors are often customers of the analyst firms. If you’re curious to learn more about such a conflict of interest in the analyst world, you can find many power-packed rants about the topic on Spend Matters where Jason Busch pulls no punches in exposing what happens behind the proverbial curtain at analyst firms.
The whitepaper also transitions into a section where it recommends evaluating a vendor’s quality levels over time as well as its pricing strategy. Those sections are thought provoking and worth reading, too.
If you’d like to get your own copy of this whitepaper, you can download a copy from CFO.com (registration required).
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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