External vendors have always been an essential component of IT service delivery but will deliver consistently only when they are well managed.

• As the variety of vendors and their costs and number increase, effective vendor management is becoming both more important and more challenging.
• There are some types of vendors that require distinctive approaches for selection and contract terms. But there are also essential approaches to managing any vendor relationship, including establishing performance metrics, actively managing the relationship, and motivating the supplier to improve performance.
• Those IT departments that are becoming dependent on cloud providers must develop new vendor management skills. While those that delegate key responsibilities to outsourcers must ensure they oversee adequate service levels for internal clients.