Top 5 Ways to Ensure Successful IT Sourcing Management and Vendor Management Collaboration

By Cynthia Batty, Global Competency Lead, Service Management, TPI

Organizations with complex IT purchasing and delivery of hardware, software and services are examining their structures and wondering how they can work more effectively. While the purchasing department usually negotiates the contracts, we often observe vendor management organizations (VMOs) scattered through areas like operations, HR and IT. For example VMOs in the IT area commonly have responsibility for the overall relationships and performance of the hardware and software suppliers.

Most sourcing clients recognize the need for a separate organization to manage sourced services (SMO) in various organizations; this can include both service delivery and relationship and metrics. Here are the TPI Top 5 tips to ensure that your SMOs and VMOs collaborate productively to yield the best results for your organization.

1. Define the terms. Vendor management typically manages vendor relationships, delivery, metrics, efficiency and cost yield for contracts generally associated with physical (or virtual) delivery of supplies, assets or inventory. Sourcing management addresses similar aspects of service providers. These two types of relationship management ─ VMO and SMO ─ require different client skill sets to be effective.

2. Create a clear definition of roles. The client VMO and SM groups will relate to entirely different organizations inside the provider ─ with different motivations, objectives, and approaches. Clients should focus on both aspects and should not expect that these very different management style disciplines will be effective if applied in the wrong area.

3. Cooperate with data. Sharing information about common providers alerts both organizations to opportunity, leverage, and problem-solving, as well as providing insight into prospects for growing or developing a provider who is performing well.

4. Understand the difference between contracts for services and for products. IT services contracts are extremely detailed and often prescriptive. While contracting for IT hardware and software can be complex, especially regarding engineering and supply chain processes, it has less immediate effect on the client’s daily business operations.

5. Share business processes to achieve maximum control. During the delivery period (the longest and most complex part of the provider relationship), TPI recommends a specific group of management processes that produce data and knowledge about the relationship performance that is essential to best practice management. Our processes focus on the management of contract, relationship, finance and performance and support the client executive team with the best data for planning and decision making.

Read Cynthia's entire TPI Top 5 here . . .

TPI’s seasoned experts can help you achieve your global sourcing goals through objective advice, robust market data, knowledge of your industry and extensive experience with service management.

E-mail Cynthia Batty, Global Competency Lead, Service Management, TPI, or phone her at +1 201 978 0542 to learn more.

Comments

[Steven Visser]

I fully agree!!
That is why, after 30 years of building outsourcing relationships, the founders of Senority, have decided to develop a tool to help both Supplier and Buyer of these complex services.
We connect the clauses of your contract to the performance of the services (SLA) and the perception thereof (Customer Satisfaction) ...... Curious? info@senority.nl

[IT Services]

Good job.
I think this is one of the best post which contains a lot of information and a best source of knowledge about IT services. Thanks foe sharing.

[Bettieclaire]

I think it's a Great job! This one is an instant classic! That is very interesting article and good information. Thanks for it.

Procurement Staffing

[Ottawa.computer support]

I think having one organization for sourcing and vendor management would build a great rapport to the client and consumer. Here in Ottawa computer support system helps the business run easily and increase its revenue rather than its burden.

[www.facebook.com/profile.php?id=681295154]

Cynthia, wonderful post...I really like your take on option 2. Everyone must have clear and defined goals for any project, job or task to be completely effective. This is something that I ensure happens with our clients who we help with IT VAR Marketing.

Cheers

Stuart Crawford
ULISTIC Inc.
http://www.ulistic.com

[Jordan 1]

Cynthia, congratulation on this post. I believe that it is important that the buyer and the seller come together as separate entities in search of a common goal. This common goal would be to allow the buyer and client to make the most out of the supplies and services being sold.

[supply chain]

I totally agree that contract for service is more complicated than contract for product.

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Here in Ottawa computer support system helps the business run easily and increase its revenue rather than its burden.