Let's be honest—managing vendors can feel like herding cats. That's where vendor management software (VMS) steps in to keep your vendor relationships on track, your compliance in check, and your data at your fingertips.
Think of vendor management software as your procurement team's Swiss Army knife—it tackles everything from sourcing and compliance to analytics and reporting in one handy package.
A robust vendor management tool provides:
Centralized Vendor Information: Consolidates all vendor data in a single platform.
Performance Tracking: Monitors vendor performance metrics over time.
Risk Management: Identifies and mitigates potential risks, particularly important as 31% of cyber insurance claims involve third-party risks like ransomware and vendor outages.
Compliance Management: Ensures vendors meet regulatory and contractual requirements, crucial because businesses must ensure vendor compliance with GDPR regulations to avoid costly penalties.
ESG & Sustainability: A vendor management software helps track and ensure vendors meet environmental, social, and governance standards, supporting sustainable sourcing initiatives.
Cost Optimization: Tracks spend, helping businesses achieve cost efficiencies.
Read more about vendor management.
|
Platform |
Key features/tools |
Best SRM software for |
| Kodiak Hub |
AI-powered, end-to-end vendor management platform that centralizes vendor data, enhances supplier collaboration and performance, highly customizable to meet diverse business needs, seamlessly integrates with existing systems, and provides rapid, user-friendly implementation. |
Ideal for mid-to-large businesses looking for a best-of-breed VMS that is customizable and quickly deployable while prioritizing collaboration, risk and performance optimization. |
| Jaggaer |
AI-enabled risk management, centralized vendor data repository, and intuitive dashboard views for streamlined performance insights. |
Best suited for enterprises prioritizing risk management. |
| SAP Ariba |
Comprehensive Source-to-Pay platform with cloud integration, aligns seamlessly with SAP systems for streamlined vendor management and procurement processes. |
Large organizations needing a fully integrated, all-encompassing procurement and VMS solution |
| Medius |
Automates vendor payments, enables self-service data updates, and tracks vendor performance in real-time. |
Ideal for businesses looking to streamline payments and ensure accurate vendor information. |
| Coupa |
Broad spend and risk management capabilities, robust reporting tools, and risk mitigation features. |
Tailored for large enterprises focusing on strategic spend control and risk management. |
| Basware |
Source-to-Pay (S2P) and eInvoicing solution specializing in accounts payable automation, procurement, and supplier collaboration |
Enterprises looking for scalable financial automation and procurement efficiency. |
| Zycus |
Advanced AI-powered P2P and S2C solution with deep analytics and risk management functionalities. |
Designed for large businesses emphasizing AI-driven automation and strategic vendor partnerships. |
| Kissflow |
Streamlines workflows with automation, supports self-service vendor onboarding, and simplifies vendor management processes. |
Great for small to mid-sized companies seeking an easy-to-use VMS for basic vendor management. |
| GEP SMART |
Cloud-based VMS with contract management, vendor performance tracking, onboarding automation, and spend analysis tools. |
Suitable for mid-sized to large businesses looking for flexible analytics and collaboration features. |
| Oracle Procurement Cloud |
Enterprise-level VMS that provides in-depth contract and compliance management, advanced analytics, and global vendor insights. |
Ideal for global enterprises needing powerful integration, compliance oversight, and detailed analytics. |
(Note: This table provides a quick summary. See below for detailed insights.)
When selecting a vendor management software, consider the specific needs of your business. Factors such as business size, regulatory requirements, and vendor ecosystem significantly influence the selection of the right vendor management solution.
Read more about the Best SRM systems in 2025.
Founded in Stockholm, Sweden, in 2017, Kodiak Hub is a pioneering vendor management software that has quickly gained prominence in the field. With a team rooted in procurement and corporate backgrounds, Kodiak Hub delivers a best-in-class vendor management solution built on a deep understanding of the challenges associated with legacy procurement systems. Recognized as a ProcureTech 100 pioneering digital solution for three consecutive years, Kodiak Hub has positioned itself as a leader in Vendor Relationship Management innovation.
Kodiak Hub's modular platform offers plug-and-play tools that specialize in vendor information management, risk monitoring, and performance analytics, setting it apart from all-in-one procurement suites. The platform facilitates streamlined vendor onboarding, risk assessments, and self-assessment tools, along with robust performance scorecards. Known for its intuitive design, Kodiak Hub’s no-code solution can be deployed within weeks, allowing businesses to quickly benefit from its comprehensive insights and advanced reporting capabilities.
Our positioning chart provides a clear view of how each SRM solution addresses different aspects of supplier relationship management.
Is the solution designed as a niche tool, solving specific points in the supplier lifecycle, or does it offer a broader range of functionalities? Additionally, we examine whether each platform prioritizes Top-Line Value or Bottom-Line Savings for its users.
Top-Line Value solutions emphasize strategies that drive sales growth, focusing on areas like enhancing supplier performance, quality, collaboration, and sustainability. In contrast, Bottom-Line Savings solutions concentrate on cost reduction, helping companies identify savings opportunities, with a lighter focus on collaboration and strategic supplier development.
This positioning chart aims to simplify the decision-making process by showing where each platform excels, so you can find the solution that best aligns with your business goals.
Security in vendor management systems is a critical yet often overlooked aspect of managing third-party relationships. Robust security measures ensure that sensitive business data remains protected and that interactions with external vendors do not introduce vulnerabilities.
Implementing comprehensive technical safeguards—such as data encryption, secure authentication protocols, and stringent access controls—is essential, as 80% of organizations with low visibility into vendor security experienced breaches in the past year. Additionally, vendor management systems should incorporate regular third-party validations, including security audits and compliance checks, to verify that security controls adhere to industry standards.
Integrating these security practices not only protects valuable business data but also ensures compliance with regulatory requirements, reducing risks associated with vendor interactions. Prioritizing security measures in vendor management systems is essential for businesses aiming to safeguard their operations and maintain trust among customers and stakeholders.
Begin by evaluating the specific needs of your organization. Consider the size and complexity of your vendor network, your industry’s regulatory requirements, and your budget. If your vendor base is extensive and diverse, you may need a vendor management system with robust data management and compliance features, like e.g. Kodiak Hub. Alternatively, if your focus is on streamlining communication with a few key vendors, a simpler solution may suffice.
Some offer basic tools for vendor data storage, while others provide advanced features like real-time performance tracking, risk assessment, and compliance monitoring. Identify the features that are critical for your procurement strategy. For example, if risk management is a priority, look for software with built-in risk assessment tools. If sustainability and ESG tracking are essential, ensure that the platform supports monitoring of vendors’ compliance with these standards.
Your VMS will likely need to interact with other systems in your tech stack, such as ERP, procurement, and financial software. To prevent data silos and streamline workflows, ensure the VMS you choose is compatible with your existing systems.
Nobody wants to wrestle with clunky software that requires a PhD to operate. If your team can't figure it out quickly, they simply won't use it—and your shiny new system becomes expensive digital shelf-ware. Look for a VMS with an accessible, well-designed interface, as effective software usability significantly boosts productivity and adoption. User experience matters, as a platform that’s easy to use will boost productivity, reduce the learning curve, and encourage consistent usage across the organization.
S2P and P2P platforms cast a wide net, but here's the reality—when you're treating supplier relationships as the strategic assets they truly are, you need specialized intelligence and tools that go deeper than 'adequate.' That's where dedicated vendor management systems shine, turning supplier data into the kind of actionable insights that drive real business performance.
While VMS can benefit organizations of various sizes, it's particularly valuable for mid-to-large enterprises managing complex supplier ecosystems with hundreds or thousands of vendors.
Typically, VMS is used by procurement teams, supply chain managers, and finance departments to handle vendor-related processes and data.
Vendor management software focuses specifically on managing vendor relationships, while procurement software encompasses a broader range of functions, including purchasing, invoicing, and order management.
Most VMS platforms include compliance management tools, audit trails, and security features aligned with standards like ISO 27001 for effective vendor risk assessments.
Yes, many VMS providers offer customization options, allowing businesses to tailor workflows, reporting, and integrations.
Consider your business needs, industry’s regulatory requirements, the size of your vendor network, budget, and the specific features your team will use most.
Choosing the right vendor management software is crucial for driving operational efficiency and minimizing risks within your vendor ecosystem. With options like Kodiak Hub and other top-tier providers, you can find a solution that meets your specific needs and elevates your vendor management practices in 2025.