Vendor Management
Erin Geiger, Director of Content at Lumos

How Many Phases are in the Vendor Management Structure?

Understand the intricacies of the vendor lifecycle, the vendor management process steps, the distinct phases of vendor management structure, and the overarching life cycle of a vendor management system.

This isn't just an academic question—it's crucial for ensuring that vendor management interactions contribute positively to your organization's performance and strategic goals. From initial selection to vendor management roles and responsibilities to ongoing management and evaluation, each phase plays a pivotal role in cultivating productive, mutually beneficial vendor relationships. So, whether you're a seasoned IT director or a project manager navigating vendor partnerships for the first time, join us as we explore vendor management process steps, essential stages and how mastering them can lead to greater operational efficiency and innovation in your IT endeavors.

What Are the Phases of Vendor Management Structure?

Let’s spice this up a bit and compare these vendor lifecycle phases with embarking on a quest in the world of "Game of Thrones" - filled with strategic alliances, meticulous planning, and the constant pursuit of excellence to secure your place on the technological Iron Throne.

Selection – Gathering Your Allies: The journey begins with a whole mess of potential vendors, where you must choose your allies wisely. Much like forming alliances in Westeros, selecting the right vendors involves evaluating their capabilities, culture, and alignment with your strategic goals. It’s a critical step, determining the strength of your forces.

Negotiation – Setting the Terms of Alliance: With allies at your side, negotiating the terms of your partnership is similar to the intricate political negotiations in King's Landing. This phase focuses on contract negotiations, establishing clear expectations, and laying down the laws of engagement, ensuring both parties benefit from the alliance.

Onboarding – Integrating into the Kingdom: Welcoming vendors into your realm requires a structured onboarding process, where they learn the laws of the land and how to navigate the kingdom. This phase ensures a smooth integration of vendors into your business processes, like acclimating to the complex dynamics of the Seven Kingdoms.

Performance Management – The Rule of Kings: With alliances forged and the kingdom established, monitoring and managing vendor performance is crucial. This ongoing phase involves assessing vendor contributions, ensuring they uphold their end of the bargain, much like a king overseeing his realm to ensure prosperity and loyalty.

Review and Renewal – The Cycle of Reigns: The final phase mirrors the cyclic nature of power in "Game of Thrones". Regularly reviewing vendor performance and deciding on contract renewals or terminations ensures your vendor management strategy remains dynamic and aligned with your kingdom’s evolving needs.

What is the Lifecycle of a Vendor Management System?

Prepping for the lifecycle of a Vendor Management System (VMS) is like strategizing for a complex, multi-level game, where each stage requires foresight, planning, and agility - a platform like Lumos makes it easy. Here's a quick blueprint for IT teams tackling vendor lifecycle management, including the contract vendor lifecycle:

Level 1 - Planning: Identify your main objectives for the VMS. Like setting up your base in a strategy game, determine what functionalities you need, the problems you're solving, and the outcomes you desire. Assess your current vendor landscape and pinpoint gaps and opportunities.

Level 2 - Vendor Selection: Scout the market for vendors like scouting for allies in a game. Evaluate potential vendors against your requirements, focusing on reliability, compatibility, and security. Use RFIs and RFPs to gather information and select the best fits.

Level 3 - Contract Negotiation: This stage is similar to negotiating alliances. Hammer out terms that align with your strategic goals, ensuring clarity on service levels, costs, and exit strategies.

Level 4 - Onboarding and Integration: Like integrating new units into your game strategy, you’ll need to incorporate the VMS into your existing processes. Train your team on its use to make sure everyone is aligned and competent.

Level 5 - Performance Management and Review: Regularly monitor and evaluate the VMS and vendor performance. Adjust strategies and relationships based on data-driven insights, similar to tweaking game tactics based on evolving scenarios.

Final Stage - Continuous Improvement: Just as games often receive updates, continuously seek ways to improve your VMS strategy, so that it remains aligned with organizational goals and adapts to new challenges and opportunities.

How Many Phases Are There in a Vendor Lifecycle?

Leaning on the video game analogy a bit further, the vendor lifecycle (and vendor management skills) can be compared to progressing through levels in a complex video game, each phase presenting its unique set of challenges and rewards. Understanding the distinct phases in this lifecycle not only ensures smoother operations but also maximizes the value derived from vendor relationships. So, how many levels are in this game? Let's dive in.

The vendor lifecycle typically comprises five main phases: Selection, Onboarding, Development, Management, and Review/Offboarding (some prefer to document these within a vendor management process pdf).

Selection: The quest begins with the Selection phase, where you identify and evaluate potential vendors. This stage is about finding partners who align with your strategic goals and operational requirements, much like choosing the right character class for your adventure.

Onboarding: Successfully chosen vendors are then onboarded, a process that involves integrating their services or products into your existing systems. It’s like equipping your character with the right tools and knowledge for the journey ahead.

Development: This phase is where the relationship is nurtured, focusing on developing the partnership so that both parties achieve what they set out to do.

Management: Ongoing management is required for maintaining a productive relationship, monitoring performance against agreed metrics, and resolving any issues that arise.

Review/Offboarding: Finally, the lifecycle concludes with a review of the vendor’s performance and the overall value to your organization. Based on this evaluation, the decision is made to either renew the relationship, renegotiate terms, or part ways.


Understanding the intricacies of the vendor lifecycle, the vendor management process steps, the distinct phases of vendor management structure, and the overarching life cycle of a vendor management system are essential pillars for any IT professional navigating these relationships. Whether you're strategizing the selection of new tech partners, onboarding innovative solutions, managing ongoing relationships, or evaluating performance for future engagements, each phase is a critical step in the journey towards optimizing vendor interactions. By partnering with Lumos and embracing the structured approach these phases offer, IT teams can navigate the vendor management process with confidence, ensuring that every vendor relationship is as productive and beneficial as possible. Book a demo and let’s see how Lumos can help!