Large corporations usually work with multiple vendors for their raw materials, packaging services or distribution of products. “Vendor Management” is a term that denotes the tools and processes that are in place to manage, procure or contract various utilities from the vendors. Globalization during the nineties led to the maturity of businesses across the globe that changed the way businesses used to function. Vendors were treated as partners and businesses started encouraging their partners through award programs, goodies etc.
In this digital era, where services are dominant, companies have to realize the fact that, they are dealing with real talent and not just a vendor or partner. When dealing with a vendor, some physical product is being sold and is paid for. But, dealing with talent is something that is associated with knowledge that deserves respect.
According to Seth Godin, who is considered to be modern guru of marketing,
“.. Vendors happily sit in the anonymous cubes at Walmart's headquarters, waiting for the buyer to show up and dicker with them. They willingly fill out the paperwork and spend hours discussing terms and conditions. The vendor is agnostic about what's being sold, and is focused on volume, or at least consistency. While the talent is also getting paid (to be in your movie, to do consulting, to coach you), he/she is not a vendor. He/She is not playing by the same rules and is not motivated in the same way. A key element of the distinction is that in addition to the varying output potential, vendors are easier to replace than talent is….“
Vendor management is process driven whereas managing talent or skill, is people driven. Companies across the globe have started realizing this fact slowly. People deliver the best when they are treated fairly and with enthusiasm. This applies to those who are in the payroll as well those on contract.
For getting the best output, it is very essential that high importance is given to the talent both internally and externally.