Capture and Market the ROI of Your VMO
Quantify the impact and demonstrate the value that your VMO delivers to your organization.
- All IT organizations are dependent on their vendors for technology products, services, and solutions to support critical business functions.
- Measuring the impact of and establishing goals for the vendor management office (VMO) to maximize its effectiveness requires an objective and quantitative approach whenever possible.
- Sharing the VMO’s impact internally is a balancing act between demonstrating value and self-promotion.
Our Advice
Critical Insight
- The return on investment (ROI) calculation for your VMO must be customized. The ROI components selected must match your VMO ROI maturity, resources, and roadmap. There is no one-size-fits-all approach to calculating VMO ROI.
- ROI contributions come from many areas and sources. To maximize the VMO’s ROI, look outside the traditional framework of savings and cost avoidance to vendor-facing interactions and the impact the VMO has on internal departments.
Impact and Result
- Quantifying the contributions of the VMO takes the guess work out of whether the VMO is performing adequately.
- Taking a comprehensive approach to measuring the value created by the VMO and the ROI associated with it will help the organization appreciate the importance of the VMO.
- Establishing goals for the VMO with the help of the executives and key stakeholders ensures that the VMO is supporting the needs of the entire organization.
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.
Client
Experience
Impact
$ Saved
Days Saved
W.W. Grainger, Inc.
Guided Implementation
9/10
$30,000
44
Workshop: Capture and Market the ROI of Your VMO
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: Get Organized
The Purpose
- Determine how you will measure the VMO’s ROI.
Key Benefits Achieved
- Focus your measurement on the appropriate activities.
Activities
Outputs
Determine your VMO’s maturity level and identify applicable ROI measurement categories.
- VMO ROI maturity level and first step of customizing the ROI formula components.
Review and select the appropriate ROI formula components for each applicable measurement category.
- Second and final step of customizing the ROI formula components…what will actually be measured.
Compile a list of potential data sources, evaluate the viability of each data source selected, and assign data collection and analysis responsibilities.
- Viable data sources and assignments for team members.
Communicate progress and proposed ROI formula components to executives and key stakeholders for feedback and/or approval/alignment.
- A progress report for key stakeholders and executives.
Module 2: Establish Baseline
The Purpose
- Set baselines to measure created value against.
Key Benefits Achieved
- ROI contributions cannot be objectively measured without baselines.
Activities
Outputs
Gather baseline data.
- Data to use for calculating baselines.
Calculate/set baselines.
- Baselines for measuring ROI contributions.
Set SMART goals.
- Value creation goals for the next measurement cycle.
Communicate progress and proposed ROI formula components to executives and key stakeholders for feedback and/or approval/alignment.
- An updated progress report for key stakeholders and executives.
Module 3: Measure and Monitor Results
The Purpose
- Calculate the VMO’s ROI.
Key Benefits Achieved
- An understanding of whether the VMO is paying for itself.
Activities
Outputs
Assemble the data and calculate the VMO’s ROI.
- The VMO’s ROI expressed in terms of how many times it pays for itself (e.g. 1X, 3X, 5X).
Organize the data for the reporting step.
- Determine which supporting data will be reported.
Module 4: Report Results
The Purpose
- Report results to stakeholders.
Key Benefits Achieved
- Stakeholders understand the value of the VMO.
Activities
Outputs
Create a reporting template.
- A template for reporting ROI and supporting data.
Determine reporting frequency.
- A decision about quarterly or annual reports.
Decide how the reports will be distributed or presented.
- A decision regarding email, video, and in-person presentation of the ROI reports.
Send out a draft report and update based on feedback.
- Final ROI reports.
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 4-phase advisory process. You'll receive 7 touchpoints with our researchers, all included in your membership.
Guided Implementation 1: Get organized
- Call 1: Review VMO ROI maturity level.
- Call 2: Discuss measurement categories selected.
Guided Implementation 2: Establish baseline
- Call 1: Review data sources and baseline tools.
- Call 2: Discuss ROI goals.
Guided Implementation 3: Measure and monitor results
- Call 1: Review tools and templates available for calculating and tracking ROI and value creation.
Guided Implementation 4: Report results
- Call 1: Review measurement and reporting frequencies.
- Call 2: Discuss the attributes of good reports.
Contributors
- George Bordon, Director, Contracts at Spirit AeroSystems
- Jason Epstein, Head of Procurement, SecureWorks, Inc.
- Deepak Bansal, CPA, CISSP, COP, Enterprise Head of IT Procurement, Sourcing Advisory & Vendor Management (VMO), Envision Healthcare
- Pat Campbell, CLU, CPCU, FLMI, Vice President of Strategic Sourcing, Nationwide Insurance (Retired)
- Donald Hopkins, Interim Director of the Master of Information Systems & Master of Science in Logistics and Supply Chain Management Programs, Wright State University
- 8 anonymous company contributors
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