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Prevent inefficiencies and rising costs from vendor sprawl. Explore 6 actionable tips to streamline multifamily vendor management.
Managing the vendor ecosystem across hundreds of properties is increasingly complex, with overlapping services, overpriced agreements due to sneaky auto-renewal clauses or hidden fees, and underutilized or redundant software driving up costs and inefficiencies. Vendor sprawl isn’t just inconvenient—it drags down your operating margins.
Through October 2024, U.S. market-rate property expenses rose 4% year-to-date, according to the National Multifamily Report by Yardi Matrix, and though labor and maintenance costs have moderated somewhat, improving operating efficiency to keep costs down remains a priority for owners and operators.
An area for opportunity? Vendor management. Rogue or unauthorized property-level spend, technology sprawl, and shadow IT create corporate challenges that go beyond budgeting: challenges you may not even know you have. Below, we’ll unpack how you can take [back] control of your vendor ecosystem and maybe even uncover hidden savings along the way.
Vendor Sprawl 101: Why It’s More Than a Budget Problem
First, a quick reality check: vendor sprawl isn’t just about wasted dollars (though, let’s be honest, that’s a huge part of it). It’s also about operational headaches, siloed data, and risk.
Here’s what vendor sprawl looks like in multifamily:
Redundant services: Different teams or properties buying the same thing/service, but from different vendors, creating duplication at the portfolio level.
Scattered contracts: Tracking renewals? Good luck when the details, if found, are buried in someone’s inbox or hidden in the depths of Sharepoint.
Tech overload: Products/tools that solved a problem in time, but aren’t needed long-term, and are now not being used.
Shadow IT: Surprise software and application purchases made by teams or properties that you/your IT team didn’t sign off on.
Fragmented relationships: Without a clear view of vendor performance or accurate vendor data, negotiating better deals is next to impossible.
Left unchecked, vendor sprawl is like a slow leak in your budget: it may not seem urgent, but it adds up fast. That’s why understanding the problem is step one.
6 Tips to Simplify Vendor Oversight
Ready to tackle vendor sprawl head-on? Here’s how to do it:
1. Take Stock of Every Vendor You’re Using
You can’t fix what you can’t see. Start by creating a full inventory of your vendors, from PMSs and maintenance services to marketing tools and leasing applications. Map out what they do, how much they cost, and which properties or teams are using them.
Why it matters: This big-picture view helps you spot redundancies, outdated contracts, and tools that are no longer relevant. You need this baseline to know where to start trimming the fat.
Pro move: Use a vendor management platform to track it all in one place – manual spreadsheets won’t cut it for the long haul.
2. Audit Your Vendors for Performance
Now that you’ve got your list, it’s time to dig deeper. Are certain vendors barely used? Are some services delivering more headaches than value? Chat with your teams, and across properties, to find out what they rely on daily versus what’s collecting dust.
Why it matters: A vendor audit helps you identify which partners are driving value, which are falling short, and which vendors could be leveraged across different properties or areas of the business. It’s your chance to stop paying for what you don’t need.
Pro move: Check KPIs—like response times for service providers or usage data for software—and see if they match your expectations.
3. Centralize Your Contracts
If your vendor contracts are scattered across inboxes, filing cabinets, and spreadsheets, you’re not alone. Centralizing these documents into a single source of truth gives you full control over vendor-related decisions, enabling you to negotiate proactively.
Why it matters: Storing your vendor information in a single repository gives you visibility to make data-based decisions and the transparency to allow for cross-department collaboration so you can make faster, more informed budget decisions.
Pro move: Use a contract management tool that integrates seamlessly with your other vendor management processes to keep all information secure and searchable.
4. Cut Redundancies and Negotiate Better Deals
Too many property-level vendors offering the same service? It’s time to consolidate. Combining agreements under a smaller number of vendors strengthens your bargaining power, simplifies oversight, and reduces your risk.
Why it matters: Fewer vendors = better pricing, less admin work, and fewer opportunities for things to fall through the cracks.
Pro move: Negotiate portfolio-wide contracts with tech providers like marketing or property management solutions and regional contracts with on-site vendors like landscaping or elevator maintenance.
5. Automate Contract Renewals
Missed renewal deadlines lead to auto-renewals that can lock you into pricey, outdated deals. Automate reminders so you have time to review terms and explore alternatives before the deadline sneaks up.
Why it matters: Staying ahead of renewals puts you in the driver’s seat, not the back seat. With vendors proposing renewal pricing increases ranging to as much as 30%, and elevator contracts lasting upwards of 25 years, you can’t afford to be reactive to your renewals.
Pro move: Set reminders 60–90 days before renewal deadlines in your vendor management platform.
6. Stay Agile with Your Vendor Strategy
The tools and services that worked for you two years ago might not be the best fit today. Regularly re-evaluate your vendor relationships and keep an eye out for new solutions that align with your current needs.
Why it matters: Agility prevents stagnation and ensures your communities stay both competitive and efficient.
Pro move: Regularly evaluate alternative vendor partners based on performance, price, functionality, service terms, safety and compliance requirements, and flexibility.
Take Control Before Vendor Sprawl Takes Over
Phew. Managing vendors across an enterprise portfolio isn’t easy. But avoiding the problem only compounds it. Tackling vendor sprawl head-on means smarter spending and a clearer path to cutting costs and improving your operations from sourcing to procuring to managing.
Ready to eliminate vendor sprawl and simplify your entire vendor management strategy? Start with these tips—or reach out to learn how Revyse can help.