Best Practices for Vendor Performance and Continuous Improvement


In an interview with Cassandra Faire, Global Performance Analyst at TAPFIN, we discussed the standard components of vendor management within an MSP program as well as some of the best practices recommended for continuous improvement of the vendor management process.

1. What are the core requirements necessary to manage vendors within an MSP program?

Cassandra Faire: Most importantly, at the highest level, are relationships.Good relationship management is critical when managing the vendors within an MSP program. It is imperative for vendors to understand the culture inside an organization as well as the organization’s goals and priorities.

It is essential to know the capabilities of the vendors and to understand where they excel. It’s a 360-degree perspective around vendor activity, how they engage the program team, the service level requirements based on the goals within the MSP program, and candidate activity.

Specific requirements that are core components of vendor management include vendor performance methodologies that emphasize vendor responsiveness, candidate quality, worker quality, and compliance in addition to manager feedback and active participation. Within a program it is important to measure and track how each vendor performs independently, as well as in comparison to other vendors.

2. What additional processes or activities can be added to the vendor management service within an MSP?

Cassandra: Well, first and foremost, what is the ultimate end goal of the client? The answer to this question will ultimately depend on which additional processes are implemented.

If the primary focus of an organization is to drive cost savings and realize a return on their investment, then there are specific measurements and initiatives to track submittal and hire rates along with other associated costs that will enable more targeted vendor management. One example may be to verify that tenure rate discounts are in place, that rate cards are set up and aligned to the market, and that rate compliance is accounted for. In this example, vendors would need to bill candidates below the maximum request rate in order to be successful in helping meet the organization’s goal. In other scenarios, a client may be looking to drive fulfillment and in that case, specific measurements and activities to drive faster submittal times and lower fulfillment ratios will be a focus.

3. What type of reporting is included in vendor management?

Cassandra: Again, this boils down to what the client wants to see. It’s all on an individual basis. But the basic reporting includes:

  • Scorecard reporting
  • Rationalization reporting
  • Candidate activity reporting
  • Vendor performance trends

Vendor management reporting provides some level of visibility on how vendors are doing overall in a specific MSP program, and how they perform across all MSP programs. As clients’ organizational goals and priorities change, this will impact what types of reports are generated.

4. How frequently should vendor reports be generated?

Cassandra: Ideally, quarterly, at a minimum. Vendor reports are important because hiring needs and performance trends fluctuate often. Being aware of these changes is necessary in order to evaluate current activity and revise future plans as to how vendors can best be leveraged. A vendor who exceeded expectations a year ago may not be the right vendor in the next year based on the skills being sought or the timing necessary to meet business objectives.

5. How is feedback and performance management cycled back to vendors within a program?

Cassandra: Some organizations may have conversations each quarter. Others will reevaluate annually or host a vendor summit where the top performing vendors are recognized and awarded. At this same event, they will touch base and discuss goals and program initiatives for the coming year. Both are common practices and one or the other is recommended to ensure effective management of the vendors within a program. What doesn’t work is a lack of this structure, and less than consistent evaluations that yield visibility into performance capability and delivery across the vendor supply base.

As a Global Performance Analyst, Cassandra is responsible for risk assessment, program management, business process redesign, performance metrics and business process analysis that has laid the foundation for the development of some of TAPFIN’s operational best practices and organizational standards. With over 15 years of experience in the industry as a client sponsor of contingent labor, a staffing vendor, and an MSP (is this structure correct?), Cassandra has served as a subject matter expert around vendor performance trends, service level agreements, and leads TAPFIN’s vendor management strategy.

She has developed best practices and methodologies containing quantitative and qualitative indicators of performance using evidence-based information and assessment in the delivery of TAPFIN’s MSP service offerings.

Cassandra holds a Bachelor of Science degree in Computer Science and a Master of Arts degree in Organizational Leadership. She also holds Six Sigma Green Belt, Lean Six Sigma, and Design for Six Sigma certifications.