What the C-Suite Gets Wrong About Vendor Performance

Many C-suite executives operate under the incorrect assumption that vendor management is simple: contract the work, set expectations, and let facilities teams handle the execution. Unfortunately, this hands-off approach overlooks the complexity of modern vendor relationships and can leave significant value on the table.

Facilities teams are managing an average of 20 service providers across multiple locations, each with unique processes, capabilities, and performance standards. Meanwhile, C-suite leaders often assume that vendor performance can be measured through simple metrics like contract compliance and cost per service call. This oversimplified view misses critical factors that determine whether vendors become strategic partners or operational liabilities.

Why do C-suite leaders often misjudge vendor performance?

The fundamental misunderstanding lies in how executives define and measure vendor success. Many C-suite leaders operate under the assumption that completed work orders equal good vendor performance. However, this is a transactional mindset. 

It limits vendor evaluation to a simple equation, rather than a relational partnership. It also doesn’t consider the impact of quality. A vendor who simply gets the job done shouldn’t be viewed as being as successful as a vendor who goes above and beyond expectations to help the organization save money. 

Understanding the Cost-First Mentality

There’s an understandable reason why executives tend to prioritize cost metrics over performance indicators: financial data often appears more tangible and easier to track. 

This cost-focused approach can lead to vendor relationships that look favorable, but actually create operational inefficiencies downstream. 

Consider a vendor with low hourly rates. That’s great, right? A CFO may find it much easier to approve that vendor’s work than someone who charges a premium. But what happens when that vendor requires multiple service calls to resolve issues that a more experienced or skilled provider could handle in just one visit? The increased total cost of the repairs is higher in this circumstance, even if the hourly rate looks lower at first glance. 

It’s regrettable that many C-suite leaders don’t have enough visibility into the day-to-day realities of vendor management to intuit these inefficiencies. Leaders may not see things like: 

• Communication breakdowns
• Coordination challenges
• Compliance gaps

Facilities managers, on the other hand, spend their days coordinating with numerous providers, each with their own points of contact and unique processes, creating communication overload that can result in critical details being missed. 

The Commodity Trap

Another contributing factor is the tendency to view vendor relationships as replaceable commodities rather than strategic partnerships. 

When executives treat vendors as interchangeable service providers, they miss opportunities to develop deeper relationships with their vendors. When you have a long-term professional relationship with a vendor, it can drive innovation and cost savings. 

This commodity mindset prevents organizations from investing in vendor development, collaborative problem-solving, and the relationship-building activities that transform good vendors into exceptional partners. The operational complexity is invisible to executives, as they primarily interact with vendor relationships through quarterly business reviews and summary reports.

Those reports are important, but any FM professional can tell you that they only show part of the full picture.

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What does "good vendor performance" actually look like in 2025?

Modern vendor performance extends far beyond basic service delivery. These days, it also encompasses: 

• Strategic partnerships
• Operational alignment
• Communication excellence 
• Measurable value creation
• Accountability
• Traditional performance metrics

In 2025, good vendor performance means vendors act like extensions of your internal team, bringing expertise, proactive communication, and consistent service quality across all of your sites. 

From the Experts: Proactive Partnership in Action

Jeff Yates from iVueit, an on-demand property inspection company, demonstrated how proactive oversight drives superior vendor performance. 

He described how one client specified to their vendors that iVueit would be onsite at their facilities at least three to four times per year and surprise visits in between. This gave the client unprecedented levels of visibility into their vendors’ processes and performance. In turn, that performance data helped the company transition from eight vendor partners to four. They lowered their total volume of work orders, increased their service quality expectations, and strengthened their partnerships across the board. 

This demonstrates that the most successful vendor relationships prioritize transparency and honest communication from the initial engagement.

Building a Foundation of Honesty

Angela Tolmasoff of L'Oréal emphasized this principle: Vendors should be upfront about their capabilities and limitations rather than overpromising to win contracts. This honesty creates a foundation for realistic expectations and prevents the service disruptions that occur when vendors accept work outside their expertise.

Strong vendor performance in 2025 also requires technological integration and data-driven accountability. The best vendors embrace platforms that provide real-time visibility into service delivery, maintain automated compliance tracking, and support collaborative communication between all stakeholders.

Great vendors understand that transparency builds trust. Pay attention to the vendor’s reaction to increased oversight, because defensiveness is a big red flag. Ideally, you will find vendors who are pleased to get feedback, because they can use performance data to continuously improve their service delivery. 

Performance Excellence Indicators

The most valuable vendor relationships include regular performance reviews and feedback loops. Rather than relying solely on annual evaluations, high-performing vendors engage in monthly check-ins and collaborative problem-solving sessions.

These short, frequent touchpoints are more effective than annual Quarterly Business Reviews (QBRs) for maintaining alignment and addressing issues before they escalate. 

Why is overpromising such a risk—and how can FMs spot it early?

Vendor overpromising represents one of the most significant risks in facilities management. It creates a cascade of operational problems that extend far beyond individual service failures.

When vendors claim to have capabilities they cannot deliver, the results include: 

• Missed SLAs
• Repeated service calls
• Frustration at the store level
• Customer dissatisfaction
• Eroded trust between all parties involved

Worst of all, these failures often emerge during critical moments when reliable service is most needed.  

The Hidden Costs of False Promises

The cost of overpromising extends beyond immediate service disruption, which are already frustrating and costly. When vendors fail to deliver on their commitments, facilities teams must invest additional time in follow-up and damage control.

Failed service calls often require emergency interventions or rush orders that carry premium pricing, negating any initial cost savings from working with lower-capability providers.

All of this diverts resources from strategic initiatives and creates an administrative burden that could be avoided with more realistic vendor expectations. 

This is another place where executives and FMs may have divergent insights. Executives may actually interpret broad capability claims as a positive indicator of vendor value. They may assume that comprehensive service offerings provide operational efficiency and cost advantages. However, facilities leaders understand that vendors who claim to excel at everything often lack deep expertise in critical areas.

Red Flags and Early Warning Signs

Smart facilities managers can identify overpromising vendors by watching for these warning indicators:

• Vague responses to specific technical questions
• Reluctance to provide detailed project timelines
• Hesitation to discuss past performance metrics
• Pricing significantly below market rates
• Avoiding discussions about limitations or declining to provide references

The most effective approach involves asking vendors to describe their strengths and acknowledge their limitations, as this honesty typically correlates with reliable service delivery. Angela Tolmasoff's guidance proves particularly valuable here: vendors should be encouraged to focus on what they do well rather than attempting to be everything to every client.

Organizations benefit more from working with vendors who have deep expertise in specific trades and can collaborate effectively with other specialists when needed. Smart facilities managers implement vendor evaluation processes that test specific capabilities before awarding significant contracts, including requesting detailed technical proposals and starting with smaller pilot projects.

How can vendor visibility and accountability be improved without micromanaging?

It’s a nearly universal truth that no one likes being micromanaged. Another important truth? Most managers don’t want to micromanage anyone, either. 

Sometimes, discussions of vendor visibility and accountability get bogged down in concerns about micromanagement. A knee-jerk reaction against implementing systematic performance tracking is often based on vendors not wanting to feel constantly under observation. Facilities managers may express similar hesitations because they don’t want to develop an adversarial or surveillance-based relationship with their vendors. 

The good news is that modern vendor management software allows you to move beyond reactive oversight and avoid the addition of new administrative burdens for either party. 

Rather than waiting for problems to surface, you can schedule brief monthly touchpoints to review performance metrics, discuss upcoming projects, and address any concerns--before they escalate. A simple 15-minute monthly check-in proves more effective than annual QBRs for maintaining vendor relationships and ensuring consistent service delivery,

Technology platforms play a crucial role in providing vendor visibility without requiring constant oversight. When vendors understand that their performance is being tracked and measured consistently, they typically respond by improving service quality and communication. Automated tracking systems eliminate the need for manual oversight while providing comprehensive performance visibility.

Technology-Enabled Transparency

Modern CMMS platforms can track vendor performance across multiple locations and service types, generating scorecards that highlight trends and identify areas for improvement. These systems provide role-based visibility that allows different stakeholders to access relevant performance information without overwhelming anyone with unnecessary detail.

The most effective vendor accountability systems focus on outcomes rather than processes. Instead of dictating how vendors should complete their work, you can establish clear service level agreements and performance metrics. Then, you can allow vendors the autonomy to deliver results using their expertise and preferred methods.

When you have the right technology, it can: 

• Automate vendor compliance tracking
• Generate real-time performance scorecards to track response times, completion rates, and quality metrics  
• Centralize all vendor communications
• Provide role-based dashboards
• Track first-time fix rates and identify which vendors resolve issues on the first visit vs. requiring callbacks
• Monitor budget adherence
• Automate work order routing
• Store vendor payment data
• Enable mobile check-ins from the field
• Create custom escalation rules
• Bundle multiple trades when issues call for electrical, HVAC, and other specialists
• Generate compliance reports

What's the C-suite's role in building stronger vendor partnerships?

Even though C-suite leaders don't need to manage vendor relationships day-to-day, they still play a critical role in vendor partnerships. These leaders determine the strategic direction and organizational priorities that enable effective vendor partnerships.

The most important contribution executives can make is establishing a culture that values vendor relationships as strategic assets--not transactional necessities. Supporting vendor rationalization represents one of the most impactful decisions C-suite leaders can make.

Strategic Investment Priorities

Rather than defaulting to competitive bidding processes that prioritize low costs, executives should champion approaches that focus on vendor capability, reliability, and long-term value creation. 

What does this look like? It looks like supporting facilities teams when they recommend working with fewer, more capable vendors who can scale with the business and handle multiple trades effectively.

It also looks like investing in technology platforms that enable vendor visibility. When executives invest in CMMS platforms like Fexa that provide automated tracking, role-based visibility, and centralized feedback loops, they enable their facilities teams to build stronger vendor relationships, all while maintaining accountability.

The Importance of Creating the Right Culture

When C-suite leaders get on board, they have the opportunity to champion a culture of transparency and collaboration. Emphasizing the importance of vendor honesty and long-term relationship building attracts higher-quality vendors. 

This cultural approach helps organizations avoid the vendor overpromising trap and build partnerships with providers who are genuinely committed to mutual success. Perhaps most importantly, C-suite leaders must support their facilities management teams when tough vendor decisions need to be made.

Essential executive support areas include:

• Backing decisions to terminate underperforming vendors
• Investing in vendor development programs
• Implementing more rigorous performance standards
• Supporting training programs for facilities teams

The most effective C-suite leaders also recognize that vendor management is a core competency that requires ongoing development and investment. This means attending vendor relationship reviews and understanding how vendor performance impacts broader business objectives like customer satisfaction, operational efficiency, and brand reputation.

Strong vendor performance starts with strong leadership alignment

Are you ready to eliminate the disconnect between C-suite expectations and facilities management expertise? 

By supporting vendor rationalization, investing in enabling technology, and championing transparency, C-suite leaders create conditions for improving vendor partnerships. Modern vendor management requires moving beyond transactional relationships to collaborative partnerships built on mutual accountability, shared visibility, and aligned incentives.

When executives embrace this partnership approach and support their facilities teams with the tools and authority needed to build strong vendor relationships, the entire organization benefits from improved service quality, operational efficiency, and cost optimization. 

Fexa gives facilities teams the tools to track vendor performance in real time—across locations, trades, and SLAs. From automated scorecards and site visit audits to custom escalation rules, Fexa helps you turn vendor data into action.Find out how much you can save on vendor fees by switching to Fexa, and Request a Demo today to learn more.