Jump Start Your Vendor Management Initiative
Create and implement a vendor management framework to begin obtaining measurable results in 90 days.
- Each year, IT organizations spend more money “outsourcing” tasks, activities, applications, functions, and other items.
- The increased spend and associated outsourcing leads to less control, and more risk for IT organizations. Managing this becomes a higher priority for IT, but many IT organizations are ill-equipped to do this proactively.
Our Advice
Critical Insight
- Vendor management is not “plug and play” – each organization’s vendor management initiative (VMI) needs to fit its culture, environment, and goals. There are commonalites among vendor management initiatives, but the key is to adapt vendor management principles to fit your needs, not the other way around.
- All vendors are not of equal importance to an organization. Internal resources are a scarce commodity and should be deployed so that they provide the best return on the organization’s investment. Classifying or segmenting your vendors allows you to focus your efforts on the most important vendors first, allowing your VMI to have the greatest impact possible.
- Having a solid foundation is critical to the VMI’s ongoing success. Whether you will be creating a formal vendor management office or using vendor management techniques, tools, and templates “informally,” starting with the basics is essential. Make sure you understand why the VMI exists and what it hopes to achieve, what is in and out of scope for the VMI, what strengths the VMI can leverage and the obstacles it will have to address, and how it will work with other areas within your organization.
Impact and Result
- Build and implement a vendor management initiative tailored to your environment.
- Create a solid foundation to sustain your vendor management initiative as it evolves and matures.
- Leverage vendor management-specific tools and templates to manage vendors more proactively and improve communication.
- Concentrate your vendor management resources on the right vendors.
- Build a roadmap and project plan for your vendor management journey to ensure you reach your destination.
- Build collaborative relationships with critical vendors.
Member Testimonials
After each Info-Tech experience, we ask our members to quantify the real-time savings, monetary impact, and project improvements our research helped them achieve. See our top member experiences for this blueprint and what our clients have to say.
9.3/10
Overall Impact
$173,127
Average $ Saved
30
Average Days Saved
Client
Experience
Impact
$ Saved
Days Saved
Foodtastic Restaurant Franchises
Guided Implementation
10/10
$12,999
2
Choctaw Nation Of Oklahoma
Workshop
9/10
$649K
50
I very much appreciated the onsite co-facilitation approach. This workshop would not have been very successful in a virtual setting. Phil and Ste... Read More
Washington Department of Fish and Wildlife
Workshop
9/10
$259K
29
Best - Chuck and Infotech's experience in the topic was top notch. Worst - We were not able to get one area of our business to be able to attend... Read More
State of Kansas Human Services
Guided Implementation
9/10
$14,949
10
PGT INNOVATIONS
Guided Implementation
8/10
N/A
N/A
Tools will help our organization become more organized, ensure visibility into our vendors, etc. Appreciated the Hitchhiker deck focusing on the i... Read More
Crossover Health
Workshop
9/10
$12,999
5
Irving Oil Limited
Guided Implementation
9/10
$500K
20
Government of Saskatchewan-Ministry of SaskBuilds and Procurement- Information Technology Division
Guided Implementation
9/10
$50,000
14
Old Republic National Title Holding Company
Workshop
10/10
$129K
50
Best: - Chuck French's facilitation. Chuck did a masterful job of balancing pace, engagement, and results. Exceptional facilitation. - Practical ... Read More
Higginbotham Companies
Guided Implementation
10/10
N/A
N/A
Meeting with Donna Glidden was in incredibly valuable time! We are embarking on a Vendor Management process and the guidance provided exceeded our ... Read More
LInea Directa SAS
Guided Implementation
10/10
N/A
N/A
It was a very pleasant experience, the specialist of the subject dominates the topic and gave me many aspects to consider in the task we have set o... Read More
Frankenmuth Insurance Company
Workshop
9/10
$32,499
20
The workshop brought together great tools and the experience of InfoTech to guide us through challenging topics around vendor management. Phil (and... Read More
Hydro Tasmania
Workshop
10/10
N/A
N/A
Steve and Gerald are clearly SMEs in their area, and the standard data pack they are presenting is relevant and applicable. The real standout has b... Read More
University of York
Workshop
9/10
$123K
50
Best- Chuck was a great facilitator and gave time for reflection and challenge. We came away with a structure and toolkit to build on internally W... Read More
Magnitude Capital
Guided Implementation
10/10
N/A
2
No bad parts. Did not wast any time. Brought up some useful insights we had not thought of. Accurately captured what was disucssed and delvier... Read More
Nevada Department of Transportation
Workshop
9/10
$64,999
5
Really enjoyed the presenters and their ability to adjust to our needs.
Lucid USA, Inc.
Guided Implementation
10/10
$129K
50
My experience has been great all around. Steve has been a huge asset regarding our VMO initiative. His dedication, support, and knowledge have been... Read More
University of North Texas System
Workshop
10/10
$64,999
20
Steve and Phil provided us with a solid foundation to start our IT VMI journey. They displayed vast professional knowledge of the subject matter, ... Read More
City of Colorado Springs
Workshop
9/10
$97,499
18
There was no worst part. Everything presented had value and Donna and Steve were able to relate this information in terms that we could understand.... Read More
Tri-State Generation and Transmission Assoc.
Guided Implementation
10/10
$64,999
80
Phil is a very knowledgeable and extremely helpful resource. His guidance has been an asset to helping me develop my role and the VMO at my company... Read More
County of Napa
Guided Implementation
10/10
$6,499
5
BLG Canada
Workshop
8/10
$900K
2
With a total spend of $70-80M overall it seems entirely feasible for us to find $500K-$1M in savings from a mature Vendor Management capability. ... Read More
State of Wyoming
Workshop
10/10
$51,999
60
I really enjoyed the team taking the time to listen and learn to understand where our team was on this journey. I think the best part of the experi... Read More
Savant Technologies LLC
Guided Implementation
7/10
N/A
14
Best: Phil is knowledgeable about the VMO space, is interested in making the tools simple, was available when we needed to meet. Worst: Phil is... Read More
American National Insurance Company Inc
Workshop
10/10
$129K
10
The trainers did an excellent job presenting information for my team. I am optimistic my team members will by defining better requirements in the ... Read More
Job and Family Services
Guided Implementation
10/10
$62,999
50
Phil has truly been an awesome partner for us as we build out our VMO. He has supported us far beyond facilitating the VMI workshop. We've since ha... Read More
Blommer Chocolate Company
Guided Implementation
7/10
$2,015
1
Our biggest struggle is bandwidth, so tools and templates are of some help, but actual services (staff augmentation as needed) would be of more ben... Read More
Shelter Mutual Insurance Company
Guided Implementation
10/10
$12,599
20
The people at InfoTech were very friendly, accommodating and knowledgeable - they truly helped jump start our vendor management initiative!
City of Birmingham
Guided Implementation
10/10
$629K
75
Steven was great! Very good information.
County of Napa
Guided Implementation
10/10
$31,499
10
Great session. Frank brought up aspects of vendor management that we didn't think of earlier.
Vendor Management
Get more from your vendors than just a bill.
This course makes up part of the Financial Management Certificate.
- Course Modules: 4
- Estimated Completion Time: 2-3 hours
- Featured Analysts:
- John Pinard, Sr. Research Director, Enterprise Applications
- James Alexander, SVP of Research and Advisory, CIO Practice
Workshop: Jump Start Your Vendor Management Initiative
Workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn't enough, we offer low-cost delivery of our project workshops. We take you through every phase of your project and ensure that you have a roadmap in place to complete your project successfully.
Module 1: Plan
The Purpose
Getting Organized
Key Benefits Achieved
Defined Roles and Goals for the VMI
Activities
Outputs
Mission Statement and Goals
- Completed Mission Statement and Goals
Scope
- List of Items In Scope and Out of Scope for the VMI
Strengths and Obstacles
- List of Strengths and Obstacles for the VMI
Roles and Responsibilities – OIC Chart
- Completed OIC Chart
Process Mapping
- Sample Process Map for One Process
Vendor Inventory Tool (Overview)
- Begun Using Vendor Inventory Tool
Module 2: Plan/Build/Run
The Purpose
Build VMI Tools and Templates
Key Benefits Achieved
Configured Tools and Templates for the VMI Based on Its Roles and Goals
Activities
Outputs
Maturity Assessment
- Completed Maturity Assessment.
Structure and Job Descriptions
- Sample Job Descriptions and Phrases.
Attributes of a Valuable Vendor
- List of Attributes of a Valuable Vendor.
Classification Model
- Configured Classification Model.
Risk Assessment Tool
- Configured Risk Assessment Tool.
Scorecards and Feedback
- Configured Scorecard and Feedback Questions.
Business Alignment Meeting Agenda
- Configured Business Alignment Meeting Agenda.
Module 3: Build/Run
The Purpose
Continue Building VMI Tools and Templates
Key Benefits Achieved
Configured Tools and Templates for the VMI Based on Its Roles and Goals
Activities
Outputs
Relationship Alignment Document
- Relationship Alignment Document Sample and Checklist
Vendor Orientation
- Vendor Orientation Checklist
Policies and Procedures
- Policies and Procedures Checklist
3-Year Roadmap
- Completed 3-Year Roadmap
90-Day Plan
- Completed 90-Day Plan
Quick Wins
- List of Quick Wins
Reports
- List of Reports
Kickoff Meeting
Module 4: Review
The Purpose
Review the Past 12 Months of VMI Operations and Improve
Key Benefits Achieved
Keeping the VMI Aligned With the Organization’s Goals and Ensuring the VMI Is Leveraging Leading Practices
Activities
Outputs
Develop/Improve Vendor Relationships.
Assess Compliance.
Incorporate Leading Practices.
Leverage Lessons Learned.
Maintain Internal Alignment.
Update Governances.
Jump Start Your Vendor Management Initiative
Create and implement a vendor management framework to begin obtaining measurable results in 90 days.
EXECUTIVE BRIEF
Analyst Perspective
What is vendor management?
When you read the phrase “vendor management,” what comes to mind? This isn’t a rhetorical question. Take your time … I’ll wait.
Unfortunately, those words conjure up a lot of different meanings, and much of that depends on whom you ask. Those who work in the vendor management field will provide a variety of answers. To complicate matters, those who are vendor management “outsiders” will have a totally different view of what vendor management is. Why is this important? Because we need a common definition to communicate more effectively, even if the definition is broad.
Let’s start creating a working definition that is not circular. Vendor management is not simply managing vendors. That expression basically reorders the words and does nothing to advance our cause; it only adds to the existing confusion surrounding the concept.
Vendor management is best thought of as a spectrum or continuum with many points rather than a specific discipline like accounting or finance. There are many functions and activities that fall under the umbrella term of vendor management: some of them will be part of your vendor management initiative (VMI), some will not, and some will exist in your organization but be outside the VMI. This is the unique part of vendor management – the part that makes it fun, but also the part that leads to the confusion. For example, accounts payable sits within the accounting department almost exclusively, but contract management can sit within or outside the VMI. The beauty of vendor management is its flexibility; your VMI can be created to meet your specific needs and goals while leveraging common vendor management principles.
Every conversation around vendor management needs to begin with “What do you mean by that?” Only then can we home in on the scope and nature of what people are discussing. “Managing vendors” is too narrow because it often ignores many of the reasons organizations create VMIs in the first place: to reduce costs, to improve performance, to improve processes, to improve relationships, to improve communication, and to manage risk better.
Vendor management is a strategic initiative that takes the big picture into account … navigating the cradle to grave lifecycle to get the most out of your interactions and relationships with your vendors. It is flexible and customizable; it is not plug and play or overly prescriptive. Tools, principles, templates, and concepts are adapted rather than adopted as is. Ultimately, you define what vendor management is for your organization.
We look forward to helping you on your vendor management journey no matter what it looks like. But first, let’s have a conversation about how you want to define vendor management in your environment.
Phil Bode
Principal Research Director, Vendor Management
Info-Tech Research Group
Executive Summary
Your Challenge
Each year, IT organizations “outsource” tasks, activities, functions, and other items. During 2021:
- Spend on as-a-service providers increased 38% over 2020.*
- Spend on managed service providers increased 16% over 2020.*
- IT service providers increased their merger and acquisition numbers by 47% over 2020.*
*Source: Information Services Group, Inc., 2022.
This leads to more spend, less control, and more risk for IT organizations. Managing this becomes a higher priority for IT, but many IT organizations are ill-equipped to do this proactively.Common Obstacles
As new contracts are negotiated and existing contracts are renegotiated or renewed, there is a perception that the contracts will yield certain results, output, performance, solutions, or outcomes. The hope is that these will provide a measurable expected value to IT and the organization. Oftentimes, much of the expected value is never realized. Many organizations don’t have a VMI to help:
- Ensure at least the expected value is achieved.
- Improve on the expected value through performance management.
- Significantly increase the expected value through a proactive VMI.
Info-Tech’s Approach
Vendor management is a proactive, cross-functional lifecycle. It can be broken down into four phases:
- Plan
- Build
- Run
- Review
The Info-Tech process addresses all four phases and provides a step-by-step approach to configure and operate your VMI. The content in this blueprint helps you quickly establish your VMI and set a solid foundation for its growth and maturity.
Info-Tech Insight
Vendor management is not a one-size-fits-all initiative. It must be configured:
- For your environment, culture, and goals.
- To leverage the strengths of your organization and personnel.
- To focus your energy and resources on your critical vendors.
Executive Summary
Your Challenge
Spend on managed service providers and as-a-service providers continues to increase. In addition, IT services vendors continue to be active in the mergers and acquisitions arena. This increases the need for a VMI to help with the changing IT vendor landscape. In 2021, there was increases of:
38%
Spend on As-a-Service Providers
16%
Spend on Managed Services Providers
47%
IT Services Merger & Acquisition Growth (Transactions)
Source: Information Services Group, Inc., 2022.
Executive Summary
Common Obstacles
When organizations execute, renew, or renegotiate a contract, there is an “expected value” associated with that contract. Without a robust VMI, most of the expected value will never be realized. With a robust VMI, the realized value significantly exceeds the expected value during the contract term.
A contract’s realized value with and without a vendor management initiative
Source: Based on findings from Geller & Company, 2003.
Executive Summary
Info-Tech’s Approach
A sound, cyclical approach to vendor management will help you create a VMI that meets your needs and stays in alignment with your organization as they both change (i.e. mature and grow).
Info-Tech’s Methodology for Creating and Operating Your VMI
| Phase 1: Plan | Phase 2: Build | Phase 3: Run | Phase 4: Review | |
|---|---|---|---|---|
Phase Steps |
1.1 Mission Statement and Goals 1.2 Scope 1.3 Strengths and Obstacles 1.4 Roles and Responsibilities 1.5 Process Mapping 1.6 Charter 1.7 Vendor Inventory 1.8 Maturity Assessment 1.9 Structure |
2.1 Classification Model |
3.1 Classify Vendors |
4.1 Assess Compliance |
Phase Outcomes |
This phase helps you organize your VMI and document internal processes, relationships, roles, and responsibilities. The main outcomes from this phase are organizational documents, a baseline VMI maturity level, and a desired future state for the VMI. | This phase helps you configure and create the tools and templates that will help you run the VMI. The main outcomes from this phase are a clear understanding of which vendors are important to you, the tools to manage the vendor relationships, and an implementation plan. | This phase helps you begin operating the VMI. The main outcomes from this phase are guidance and the steps required to implement your VMI. | This phase helps the VMI identify what it should stop doing, start doing, and continue doing as it improves and matures. The main outcomes from this phase are ways to advance the VMI and maintain internal alignment. |
Insight Summary
Insight 1
Vendor management is not “plug and play” – each organization’s vendor management initiative (VMI) needs to fit its culture, environment, and goals. While there are commonalities and leading practices associated with vendor management, your initiative won’t look exactly like another organization’s. The key is to adapt vendor management principles to fit your needs.
Insight 2
All vendors are not of equal importance to your organization. Internal resources are a scarce commodity and should be deployed so that they provide the best return on the organization’s investment. Classifying or segmenting your vendors allows you to focus your efforts on the most important vendors first, allowing your VMI to have the greatest impact possible.
Insight 3
Having a solid foundation is critical to the VMI’s ongoing success. Whether you will be creating a formal vendor management office or using vendor management techniques, tools, and templates “informally,” starting with the basics is essential. Make sure you understand why the VMI exists and what it hopes to achieve, what is in and out of scope for the VMI, what strengths the VMI can leverage and the obstacles it will have to address, and how it will work with other areas within your organization.
Blueprint Deliverables
The four phases of creating and running a vendor management initiative are supported with configurable tools, templates, and checklists to help you stay aligned internally and achieve your goals.
VMI Tools and Templates
Build a solid foundation for your VMI and configure tools and templates to help you manage your vendor relationships.
Key Deliverables:
- Jump – Phase 1 Tools and Templates Compendium
- Jump – Phase 2 Tools and Templates Compendium
- Jump – Phase 2 Vendor Classification Tool
- Jump – Phase 2 Vendor Risk Assessment Tool
A suite of tools and templates to help you create and implement your vendor management initiative.
About Info-Tech
Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.
We produce unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. We partner closely with IT teams to provide everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.
What Is a Blueprint?
A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your IT problems.
Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.
Need Extra Help?
Speak With An Analyst
Get the help you need in this 3-phase advisory process. You'll receive 12 touchpoints with our researchers, all included in your membership.
Guided Implementation 1: Plan
- Call 1: Mission statement and goals, scope, and strengths and obstacles.
- Call 2: Roles and responsibilities and process mapping.
- Call 3: Charter and vendor inventory.
- Call 4: Maturity assessment and VMI structure.
Guided Implementation 2: Build and Run
- Call 1: Classification model.
- Call 2: Risk assessment.
- Call 3: Scorecards and feedback and business alignment meetings.
- Call 4: Relationship alignment document, vendor orientation, and job descriptions.
- Call 5: Policies and procedures and reports.
- Call 6: 3-year roadmap.
- Call 7: 90-day plan and quick wins.
Guided Implementation 3: Review
- Call 1: Assess compliance, incorporate leading practices, leverage lessons learned, maintain internal alignment, and update governances.
Looking at Risk in a New Light: The Six Pillars of Vendor Risk Management
Manage Exponential Value Relationships
Jump Start Your Vendor Management Initiative
Capture and Market the ROI of Your VMO
Cut Cost Through Effective IT Category Planning
Design and Build an Effective Contract Lifecycle Management Process
Maximize Value From Your Value-Added Reseller (VAR)
Drive Successful Sourcing Outcomes With a Robust RFP Process
Reduce Risk With Rock-Solid Service-Level Agreements
Slash Spending by Optimizing Your Software Maintenance and Support
Identify and Manage Financial Risk Impacts on Your Organization
Identify and Manage Strategic Risk Impacts on Your Organization
Identify and Manage Reputational Risk Impacts on Your Organization
Identify and Manage Security Risk Impacts on Your Organization
Evaluate Your Vendor Account Team to Optimize Vendor Relations
Elevate Your Vendor Management Initiative
Prepare for Negotiations More Effectively
Implement Your Negotiation Strategy More Effectively
Evaluate and Learn From Your Negotiation Sessions More Effectively
Proactively Identify and Mitigate Vendor Risk
Master the Public Cloud IaaS Acquisition Models
Essentials of Vendor Management for Small Business
Identify and Manage Regulatory and Compliance Risk Impacts on Your Organization
Identify and Manage Operational Risk Impacts on Your Organization
Don’t Allow Software Licensing to Derail Your M&A
Identify and Reduce Agile Contract Risk
Improve Your Statements of Work to Hold Your Vendors Accountable
Understand Common IT Contract Provisions to Negotiate More Effectively
Master Contract Review and Negotiation for Software Agreements
Master the MSA for Your Managed Services Providers
Negotiate SaaS Agreements That Are Built to Last
