Choosing the right vendor management system (VMS) is key to improving supplier relationships, reducing risk, and streamlining procurement workflows.

More companies are recognising this need. A recent report from Global Growth Insights found that 28% of organisations now use VMS software specifically to improve supplier risk management and compliance. As supply chains grow more complex, having the right system in place is no longer a nice-to-have; it's essential.

In this blog, we’ll walk you through some of the best vendor management systems available today, highlighting their core features, strengths, and what type of teams they’re best suited for.

Key Takeaways

• A vendor management system centralises and automates vendor-related tasks to boost efficiency.

• Key features include performance tracking, compliance management, and integration with existing business tools.

• Selecting the right VMS means considering ease of use, customisation options, scalability, and customer support.

• Using a VMS helps reduce operational costs and lowers supplier-related risks.

• Effective vendor management strengthens supplier relationships and improves overall business outcomes.

What Is a Vendor Management System?

A vendor management System is specialised software designed to improve how you manage vendors.

It centralises vendor information and automates essential tasks like onboarding new suppliers, managing and renewing contracts, monitoring vendor performance against agreed standards, checking compliance requirements, and processing payments efficiently.

By reducing manual effort, this software helps improve accuracy, speeds up processes, and provides better visibility into vendor relationships and spending.

In the next section, we’ll explore the key benefits a vendor management tool brings to your organisation.

What a Vendor Management Tool Can Do for Your Business

A vendor management system (VMS) helps you manage supplier relationships more effectively by centralising data, automating workflows, and ensuring compliance with company policies and regulatory standards. It reduces manual admin, improves communication, and helps build stronger vendor partnerships.

Here’s what a good VMS enables you to do:

• Improves Vendor Onboarding: Automates document collection and verification to reduce manual errors and speed up the onboarding process.

• Centralises Information: Stores all vendor details, contracts, and communications in one accessible system for easier management and reference.

• Tracks Performance: Monitors key metrics such as delivery accuracy, quality, and compliance to ensure vendors meet agreed standards.

• Ensures Compliance: Automates compliance checks to reduce risks associated with regulatory and policy violations.

• Simplifies Payments: Supports automated invoice processing and timely vendor payments, improving financial accuracy and relationships.

• Improves Communication: Facilitates transparent and consistent interaction between your team and vendors through integrated messaging and notifications.

• Provides Data Insights: Offers real-time reporting and analytics for better decision-making on vendor selection, risk management, and cost control.

Implementing a vendor management tool reduces administrative burden, enhances operational efficiency, and strengthens vendor partnerships, enabling your business to operate more effectively.

Also Read: Simplifying Vendor Payments with a Smarter Accounts Payable Process

Top 7 Vendor Management Tools

A vendor management system helps businesses handle supplier relationships, automate tasks, reduce risks, and improve spend visibility. Here’s a list of trusted platforms that support vendor-related operations across different industries and company sizes:

1. SAP Fieldglass

SAP Fieldglass is a vendor management system built to manage external vendors, especially contingent workers and service providers. It helps large companies streamline vendor hiring, stay compliant, and track spend.

Key Features:

• Manages onboarding and offboarding of contract workers

• Tracks vendor compliance and documentation

• Gives clear visibility into workforce costs

Pricing: Custom pricing based on company size and usage; available on request.

2. Beeline

Beeline is an enterprise-grade vendor management system designed to manage the extended workforce, including contractors, consultants, and service providers. It’s built for complex, global operations.

Key Features:

• Workforce analytics to track performance and costs

• Configurable workflows and integrations with ERP/HRMS

• Compliance tracking for onboarding, background checks, and more

Pricing: Custom quote provided based on organisation needs.

3. Jaggaer

JAGGAER is a cloud-based vendor management system that supports the entire supplier lifecycle—from onboarding and qualification to performance monitoring and risk management. It’s used widely in industries like healthcare, education, and manufacturing.

Key Features:

• Centralised supplier onboarding and qualification workflows

• Real-time supplier performance and risk scoring

• Integration with procurement, sourcing, and contract modules

Pricing: Custom pricing based on deployment scope and modules selected.

4. Medius

Medius offers AP automation software with integrated supplier management capabilities. While not a full-scale VMS, it helps finance and procurement teams manage vendor data, onboarding, and compliance within the invoice-to-pay workflow.

Key Features:

• Centralised supplier data with self-service onboarding portals

• Built-in compliance checks and document verification

• Integration with ERP systems for seamless AP and vendor workflows

Pricing: Custom — based on business size and modules selected

5. Workday VNDLY

Workday VNDLY is a cloud-based vendor management system focused on managing contingent workers and services procurement. It helps organisations streamline vendor workflows, ensure compliance, and track external workforce performance.

Key Features:

• Manages sourcing, onboarding, and payments for external talent

• Tracks compliance with custom workflows and business rules

• Offers dashboards for real-time vendor and spend insights

Pricing: Custom — available on request via Workday's sales team

6. Venminder

Venminder is a dedicated vendor management platform focused on third-party risk, compliance, and due diligence. It’s widely used in regulated industries like banking, healthcare, and insurance, where vendor oversight is critical.

Key Features:

• Centralised vendor risk profiles with built-in due diligence templates

• Automated document collection and renewal tracking

• Risk assessment workflows aligned with regulatory expectations

Pricing: Available on request — based on features and number of vendors managed

7. Ivalua

Ivalua is a unified source-to-pay platform that includes strong vendor management features to help organisations centralise supplier data, assess risk, and collaborate effectively with suppliers.

Key Features:

• 360° supplier profiles with risk, performance, and compliance data

• Onboarding workflows and document management

• Built-in collaboration tools for performance reviews and corrective actions

Pricing: Custom pricing based on deployment and modules selected

Choosing the right vendor management tool requires assessing your business size, industry, and operational goals to select a platform that simplifies payments, improves compliance, and provides spend visibility tailored to your needs.

Also Read: Best Procurement Tools and Resources in 2025

Moving on, when selecting a vendor management system, here are the key factors to keep in mind.

Criteria for Choosing the Best Vendor Management Tool

Vendor management tools play a direct role in helping businesses keep processes smooth and structured. The right tool makes vendor coordination faster, helps avoid errors, and brings greater visibility across teams. Here’s what to look for:

• Ease of Use: Pick a platform that your team can operate without constant help. A simple interface reduces delays and lets users focus on vendor tasks instead of learning the tool itself.

• Tracking Vendor Performance: The system should give you a clear view of how vendors are doing—quality, delivery time, or policy compliance. That way, you're not reacting late to issues.

• Risk and Compliance Checks: Every supplier comes with potential risks. A tool that helps track credentials, contract terms, and compliance can help your team spot problems earlier.

• Clear Communication Features: Good vendor relationships require timely updates. A tool that lets teams and vendors share updates, documents, and comments in one place cuts back-and-forth and speeds up work.

• Cost-Value Balance: While pricing matters, it’s also about how much time and effort the tool saves. A system that helps your team do more in less time can cover its cost in just a few months.

• Room to Grow: As your business adds more vendors or works with more data, the platform should keep up. It shouldn’t slow down or require upgrades just to handle basic tasks.

• Support That’s Easy to Reach: Issues can slow down operations. Pick a tool that offers fast help—be it through live chat, support tickets, or learning resources—so your team doesn’t lose time.

• Clear Reports and Insights: Vendor management is not just about storing data. The right tool should help you track spending, monitor timelines, and spot delays with ready-made or exportable reports.

Choosing the right vendor management tool comes down to finding one that fits your team’s needs without adding extra steps. A system that’s easy to use, adapts to your processes, and keeps information consistent across departments can save time and reduce errors. The better the fit, the smoother your vendor operations run.

How Kodo Helps with Vendor Management

Kodo is a procure-to-pay solution built for fast-growing businesses in India. While it’s not a full-fledged VMS, Kodo streamlines vendor payments, approval workflows, and spend tracking, making it a valuable tool for operational vendor management.

Here’s how Kodo supports vendor operations:

• Simplified Payments: Handle vendor payouts through UPI, bank transfers, and bulk uploads.

• Approval Workflows: Set up maker-checker and multi-level approval flows to maintain financial control.

• Centralised Records: Store invoices and payment history for easier audits and compliance.

• Real-Time Spend Visibility: Track vendor spending against budgets with real-time dashboards.

• Purchase Order Management: Create, approve, and track purchase orders linked to specific vendors.

• Invoice Management: Collect, store, match, and approve invoices for timely and compliant payment.

Kodo is ideal for teams looking to reduce manual work, speed up vendor payments, and bring visibility to procurement operations, without the complexity of a full VMS.

Wrapping Up

Choosing the right vendor management system is crucial for improving your supplier relationships, improving efficiency, and reducing risks. By focusing on ease of use, integration, and the features that matter most to your business, you can select a solution that supports your growth and operational goals.

Kodo offers a comprehensive platform that automates vendor payments, tracks spending in real time, and simplifies approval workflows. With customizable features and multiple payment options, Kodo helps finance teams maintain control and build stronger vendor partnerships.

Explore how Kodo can make your vendor management simpler and more efficient. Reach out today to learn more.

FAQs

1. What is the vendor management system?
A vendor management system (VMS) is software designed to help businesses manage their relationships with suppliers. It centralises tasks like vendor selection, contract management, performance tracking, and compliance monitoring in one platform.

2. What is VMS used for?
VMS is used to streamline and automate vendor-related processes, reduce risks, control costs, improve supplier performance, and maintain compliance with company policies and regulations.

3. What is an example of vendor management?
An example of vendor management is a company setting up a process to evaluate potential suppliers, negotiate contracts, monitor delivery timelines, track service quality, and ensure payments are made on time.

4. What are the 5 pillars of vendor management?
The five pillars of vendor management are:

1. Vendor Selection

2. Contract Negotiation

3. Performance Management

4. Risk and Compliance Management

5. Relationship Management

5. How does Kodo support vendor management?
Kodo automates payment processes, offers multiple payment methods, provides real-time spend tracking, and includes customizable approval workflows to improve vendor management for finance teams.