Vendor Management Best Practices for IT Procurement in India

Why Vendor Management Matters

Your IT vendors are extensions of your team. A laptop supplier with poor quality control, a cloud provider with frequent outages, or an AMC vendor who never shows up on time — all of these create downstream problems for your users. Good vendor management reduces these risks and keeps your operations running smoothly.

Vendor Onboarding Checklist

• Verify GSTIN on the GST portal — confirm name matches, status is "Active," and filing history is current.
• Collect PAN card copy for TDS compliance (mandatory for payments above ₹30,000 per year).
• Document bank account details for payment processing.
• Get at least two references from existing clients (preferably in the same industry).
• Sign an NDA if the vendor will access any sensitive data.
• Define service scope, SLA targets, pricing, and termination terms in a written agreement.

Ongoing Vendor Management

Track each vendor's performance monthly: on-time delivery percentage, invoice accuracy, support response time, and quality incident count. Use a simple scorecard (1-5 rating) for each metric. Share the scorecard with vendors quarterly and discuss improvement areas.

For AMC vendors: track site visit timeliness, first-time fix rate, and customer satisfaction scores from end users. Poor performance triggers a review meeting and, if unresolved, a vendor replacement process.

GST Compliance with Vendors

Every vendor invoice must include: vendor GSTIN and your GSTIN, invoice number and date, HSN/SAC code for each item, taxable value, GST rate (SGST/CGST for intra-state, IGST for inter-state), and total amount. Reconcile vendor invoices with GSTR-2A monthly to catch mismatches early.

For e-waste disposal vendors: ensure they are registered with the Central Pollution Control Board (CPCB) and issue disposal certificates with their registration number. This is mandatory for audit compliance.

When to Replace a Vendor

Consider replacement when: SLA breaches exceed 20% for three consecutive months, quality issues affect end-user productivity, pricing becomes uncompetitive compared to alternatives, or compliance documentation is repeatedly incorrect or late. Always have a transition plan before terminating a vendor to avoid service gaps.