Have you heard about Vendor Relationship Management?

Even if you think you know all about managing supplier/vendor relationships in your organisations, have a look at this site  that has been referenced a few times places like Confused of Calcutta, Media influencer and weThink.

Strange how the same kinds of words can mean all kinds of things to different people. Before I saw these links, Vendor Relationship Management didn’t sound like anything earth shatteringly new – after all SRM is  just another SAP module.

But The VRM project I’m linking to here is a different entity entirely. It’s spearheaded by Doc Searls of Cluetrain (*) fame. From the weThink link I’ve mentioned above:

While more of mind-shift than actual code, Doc Searls believes in the next few years, consumers will disclose their intentions to marketers through something akin to a personal rfp.

In this view, VRM is the opposite of CRM from an individual consumer’s standpoint. The concept is intriguing, but it looks like the project/movement is made up purely of marketers and internet mavens. And looks like the people involved in the project are trying to reinvent from scratch something that corporations have been struggling with for years. There don’t seem to be any people with real experience of being professional vendor managers. If anything the opposite is the case. Two of the comments that came back:

“Doc’s VRM sounds way hard. I don’t want to manage my relationship with Target or write a RFP for a blender. I don’t have an acquisition dept.”

And

Terms like “VRM” or “personal rfps” evoke some of the biggest jokes of cubicle-laden America

Ouch. My view: This VRM project would benefit greatly from some involvement from real procurement practitioners to join in the debate and hopefully help Doc’s vision become a reality. Without evoking any cubicle-oriented jokes. I can’t see the vision becoming reality anytime soon without that kind of involvement.

(*) Cluetrain  is a classic, very entertaining and absorbing book about the positive power of the internet. Well worth a read for those interested in what the internet could do – even if it was written nearly a decade ago. I would counterbalance it with The Social Life Of Information  which for me is a more serious/considered/balanced view of everyone becoming connected to everyone else.

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10 thoughts on “Have you heard about Vendor Relationship Management?

  1. Graham – thanks for the comment. BTW The link in your comment is broken – should be http://blog.grahamsadd.com. I’ve just subscribed, look forwards to reading more.

    I stand corrected – given that you are from Infobank there is at least one person around from “our” space talking Doc Searls-style VRM. And from the looks of Paoga you are actually building something. Are there any more of you/us involved in this VRM thing?

    FWIW I think your use of C2B sounds better than VRM.

  2. Alan,

    First, thanks for your interest in VRM.

    Second, I invite you to visit the central source of information about VRM, which is the ProjectVRM site (still a wiki) at http://projectvrm.org. There it says VRM is not the opposite of CRM but rather the reciprocal of it. It’s a subtle distinction but an important one. The two need to work together. Some additional corrections, some large and some small…

    — The VRM community is not made “purely of marketers and internet mavens”. Our base is much broader than that. Most critically it includes developers, and it needs a lot more of them.

    — There is no “Doc Searls-style VRM”. While there are (and must be) differeing approaches to VRM in our community, it’s way too early to start labeling them.

    — The WeThink piece you quote cherry-picked two of the most snarky and negative remarks following my talk at iCitizen. If you want to read a more complete set of reactions, check this complilation at the ProjectVRM blog: http://blogs.law.harvard.edu/vrm/2008/05/23/vrm-linklist/

    To unpack that a bit more, I’ll repeat my comment below the WeThink piece. Here goes:

    “First, VRM is about customers, not consumers. The two words are not synonyms. The distinction might not be poetic, but it is meaningful.

    “Second, VRM is not about ‘disclosing’ information to marketers, or to anybody. It’s about asserting a variety of things: intentions to buy specific goods and services, preferences, existing memberships and other relevant information — involving “minimal disclosure” and “constrained use”. That may sound too technical, but again distinctions are essential.

    “What matters is that VRM works to make customers both a) independent, and b) enabled by tools that permit engagement by both buyers and sellers on terms that work for both.

    “Third, even though I talked about VRM to a room full of marketing folks in Columbus, I obviously did a lousy job of making clear that it is not yet ready to be marketed. I believed then, and still do, that it helps marketers to get an advance briefing on a development that will, if it succeeds, change their lives.

    “Yes, we need poets as well as coders. For what it’s worth I’m the former, not the latter. But we need real stuff before we get poetic about it. We’re not there yet. Meanwhile, I beg your patience while we work on substantive tools that serve principles which, while not yet poetic, might change the world for the better.”

    Here’s the bottom line: VRM is an idea. Maybe it will work, and maybe it won’t. Either way it needs code. We’re working on that, and we welcome help with it. As for the marketing, it can — and should — wait.

    Cheers,

    Doc

  3. Doc – many thanks for dropping by and leaving the comment. I’ve spent some time on the Project VRM wiki and signed up for the mailing list (I also subscribe to the blog). I look forwards to learning more about the idea. I think the idea is fascinating, and I do hope it works. In the corporate world over the past decade we’ve seen an increasing sophistication in procurement, so it would make sense for these advances to make their way to individuals. Quite how it could work in real life is a different question entirely.

    I do hope more people who have worked on vendor management systems and processes in the corporate world join the VRM cause. I’m sure that, if not, there will be a lot of re-invention of wheels.

    Incidentally, to indulge in a little idle gossip and speculation, in the comments on this post: http://www.spendmatters.com/index.cfm/2007/7/24/CorMine-has-Its-Work-Cut-Out-After-Its-Perfect-Acquisition some commentators debate the pros and cons of an old exchange portal’s code becoming open sourced. If the codebase does become available then the workings of the application may well become interesting to VRM advocates.

  4. Thanks, Alan. I saw your sign-up for the list. Good to have you aboard.

    In fact we do have some people who have worked on vendor management, as well as CRM. Very interesting work too, I should add.

    Thanks for the tip on that last item. One of the things we need to do is round up already-working code bases — and watch for new ones coming along. There are over half a million open source code bases out there already. Surely there is already much we can leverage.

  5. Pingback: On Free, Open Source and VRM « Golden Pebbles

  6. Just caught up with these comments and we subsequently met at the recent VRMUK meeting.
    To repeat a few statements that I have made during the past about this concept:
    When I was running Infobank I talked about the mutual benefits of Supplier Relationship Management, now referred to as VRM.
    I agree with Doc that VRM is not restricted to Consumers but to customers of products and services right up the Supply Chain. The penetration of broadband has extended the potential from the preserve of the enterprises to include the individual as a consumer.
    I have never thought that VRM would or should compete with or replace CRM but can, if appropriate and with the permission of both parties, synchronise data between willing buyer and willing seller to mutual advantage.
    Having worked on this for some years I don’t agree with Doc that ‘VRM is an idea that may or may not work’. I believe that the convenience, compliance and cost benefits make VRM, in many forms, inevitable.
    Have a look at http://www.mysortingoffice.com for a demo of an application which meets the fundamental principal of VRM of ‘managing up’
    I think that I have been pretty consistent with my views and ambitions for what Doc calls ‘the reciprocal to CRM’ both in my blog and the links to articles over the years. With such an important, disruptive, global proposition, it comes as no surprise that the growing VRM community will address different issues and vertical markets.
    The interpretations of VRM will be as varied as the market using them.

  7. I would like to ask you to take a look and provide feedback if you have the time.

    Thank you,

    Darrell

    I would like to introduce our VRM program to you, after reading and looking at our site could you please provide any feedback that you could enlighten us on. After 35 years in the construction industry I think this will work throughout the industry as well as many other as a solution. Please let me know your thoughts.

    Darrell

    Subject: VRM 4 Construction

    About VRM
    VRM, or Vendor Relationship Management, is the reciprocal of CRM or Customer Relationship Management. It provides customers with tools for engaging with vendors in ways that work for both parties.

    CRM systems for the duration have borne the full burden of relating with customers. A easy to use VRM will provide customers with the means to bear some of that weight, and to help make markets work for both vendors and customers — in ways that don’t require the former to “lock in” the latter.

    The goal of VRM is to improve the relationship between Demand and Supply by providing new and better ways for the former to relate to the latter. In a larger sense, VRM immodestly intends to improve markets and their mechanisms by equipping customers to be independent leaders and not just captive followers in their relationships with vendors and other parties on the supply side of the marketplace.

    For VRM to work, vendors must have reason to value it, and customers must have reasons to invest the necessary time, effort and attention to making it work. Providing those reasons to both sides is the primary challenge for VRM. Building stronger relationships between buyer and sellers.

    I would like your opinion on this and see if you may could use it in your marketing and sales efforts. This is not your typical VRM System, We’ve made it simple and added many free links throughout our network. ( See Special Offers)

    We would also like to receive feedback from anyone about about our VRM System at the following link http://www.constructionclub.com/ubg/VRM_details.htm

    I see a world where every individual is engaged and empowered to get the most out of their relationships with vendors–vendors of all sizes. In that world, not only are individuals and vendors each getting and creating more value directly, the entire economy is operating at a higher efficiency as less money is spent on wasted advertising and product development and more is spent on fulfilling verified demand. This would supercharge Adam Smith’s invisible hand and provide a significant increase in aggregate global wealth for everyone. It takes the benefits of the zero-distance network and extends it efficiently into the domain of user-driven commerce.

    Thank you for your time and support

    Darrell Simpson Sr.
    President
    SIP Supply LLC.
    478 285 2256
    http://www.constructionclub.com/ubg/VRM_details.htm

    1. Hi Darrell.

      1. I think it would be better if you didn’t just lift verbatim text from some of the leading VRM thinkers without even providing any attribution.

      2. I’m interested by your business model. From what I can see you provide an online address book where I (as a buyer) can store my vendor’s contact details. The buyer pays a fee for the service and it’s free for suppliers. What I’m struggling with though is why, as a buyer, would I want to use your service rather than just continue to list my suppliers’ details on an Excel sheet or in Outlook? If, as a buyer, I put my key suppliers’ contact details onto your system then … potentially … that valuable intellectual property might even end up in the hands of a competitor!

  8. About VRm and Construction Cub, ThisVRM system was suppose to be the latest thing from a company out of Canada, However after we startedthe VR program we found there was may things that was not working as we were told.

    The VRM program was suppose to be a solution to a much needed service, as several times a week we have someone calling to source products in the constructio industry, so based on what we were told could andwould happen we launched this program. Needless to say it cost us a lot of time and money and we have not made a dime on this to date.
    We run several site in the construction industry and will get to taking this down. If you need to know the company that we were dealing with let me know via e-mail. I wuld hate to see someone else make the same mistake.
    Sorry for any problems that you may have had.

    Our real business is at http://www.SIPSupply.com
    Visit our site, if we can help you in the commercial, Indstrial, or Military market let us know.

    Thanks to all
    Darrell Simpson Sr.

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