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Establish a Sustainable Vendor Management Office

Lay the foundation for a vendor management process that is built to last.

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Contributors

  • Ronald Flockhart, Group Sourcing Head at FirstRand Group
  • Carla Di Castro, Senior Global Sourcing Manager at Workday
  • Gerry Pettit, Director IT Vendor Management at CB&I
  • Evan Bortzfield, Sr. Sourcing Specialist at Riverbed Technology
  • Phil Kaylor, Express Scripts
  • One anonymous contributor

Your Challenge

  • A large percentage of organizations do not have a formalized vendor management process, leaving the entire organization vulnerable to poor business outcomes.
  • Because it is so hard to quantify ROI for vendor management activities and resources, it often doesn’t get done effectively.
  • Managing vendors is a cross-functional endeavor. Without a solid internal foundation, effective vendor management is likely to fall short of achieving value-added outcomes.

Our Advice

Critical Insight

  • Define what vendor management means for your organization. The definition is dependent on your organization’s size and structure.
  • Vendor management does not exist in a vacuum. It is integrated and dependent on other business and IT processes, such as project management, requirements gathering, procurement, and compliance.
  • The internal relationships need to be strong before your vendor relationships can be strong. Make sure your organization can present a united front.
  • Understand exactly where you are consuming resources in terms of people and time invested into these solutions. This is a holistic perspective on resource allocation that will drive visibility upwards to senior management and force a ROI or cost-benefit dialogue.

Impact and Result

  • Taking a proactive approach to managing your vendors will help negotiate relationships where everyone’s best interests are accommodated.
  • The approach begins by laying the foundation for a thorough vendor management function within your organization.

Research & Tools

Start here – read the Executive Brief

Read our concise Executive Brief to find out why you should carefully plan your vendor management process, review Info-Tech’s methodology, and understand the different ways we can support you in completing this project.

1. Define vendor management strategy

Define vendor management and complete a vendor management office (VMO) strategic roadmap.

3. Develop vendor management governance

Clarify value proposition and launch internal roadshow to gain stakeholder buy-in.

Guided Implementations

This guided implementation is a seven call advisory process.

Guided Implementation #1 - Define vendor management strategy

Call #1 - Define the vendor management organization’s mission.
Call #2 - Review VMO strategic roadmap.

Guided Implementation #2 - Design vendor management office

Call #1 - Map organization structure to deployment model.
Call #2 - Review vendor management staffing model.

Guided Implementation #3 - Develop vendor management governance

Call #1 - Clarify value proposition.
Call #2 - Establish value metrics.
Call #3 - Launch internal roadshow.

Onsite Workshop

Discuss This Workshop

Book Your Workshop

Onsite 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 onsite 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: Define Vendor Management Strategy

The Purpose

  • Define vendor management strategy.

Key Benefits Achieved

  • Define vendor management for your organization.
  • Complete a strategic roadmap to document your current state and desired future state.

Activities

Outputs

1.1

Envision your ideal future state.

  • VMO Strategic Roadmap
1.2

Calculate your current vendor management maturity.

1.3

Conduct a gap analysis.

1.4

Write a migration plan.

1.5

Create accountability and define clear roles.

  • RASCI Chart

Module 2: Design the Vendor Management Office

The Purpose

  • Design organization and staffing model.

Key Benefits Achieved

  • Map organizational model to business needs.
  • Plan staffing model.

Activities

Outputs

2.1

Assess and map your organization to a deployment model.

  • Vendor Management Competency Framework
2.2

Assess your staff’s core competencies.

2.3

Create vendor management job descriptions.

  • Vendor Management Job Descriptions

Module 3: Develop the Vendor Management Office Governance

The Purpose

  • Develop key governance structures.

Key Benefits Achieved

  • Define value metrics and value proposition.
  • Write mission and charter.
  • Gain stakeholder buy-in.

Activities

Outputs

3.1

Define mission and charter.

  • Vendor Management Mission and Charter
3.2

Establish value metrics.

3.3

Launch internal roadshow.

  • Internal Survey