Real Outsourcing

How To Build A World Class Vendor Management Organization – EMS / Sourcing Interests Group

 

The Sourcing Interest Group is one the leading organization in world for the Sourcing and Outsourcing Industry. Expense Management Solutions is a global leader in sourcing and outsourcing advisory. The following is a recent article on vendor management.

How To Build A World Class Vendor Management Organization

Michele Flynn, President, Expense Management Solutions

This summer, the driving topic for many organizations seems to be “how to build a world class vendor management organization” – as we all know – it is often much easier to manage “one” thing at a time.  In reality, in order to be effective in managing vendors across your enterprise, you need to be able to manage multiple vendors, all the time.  Your first reaction may well be – that’s impossible.  While I will not be able to address every issue that will come up, this article is intended to lay out a roadmap that will help you to get started if you are at the early stages, validate and potentially expand the breadth of your program if you are in development and perhaps even give you some things to consider if you are at the more advanced stage of implementation.

In a nutshell, effective governance or vendor management – on a one-off basis – is all about how to ensure that the value you achieve with your vendor equals or exceeds all that you expected when you initiated the relationship.  (If you would like to hear more about how to implement good vendor management on a point to point basis, click here to listen to a 60 minute webinar I presented in May.)  A world class vendor management organization takes vendor management to the next level.  Why do you need to worry about building a vendor management organization (VMO)?  For years most of us have addressed “vendor management” in one of three ways.  Either we relied upon the business owners who are buying the services to ensure that the vendor performed as required, we focused our energies on the top strategic relationships, or we relied upon the contract to cover the critical issues and assumed the rest would be resolved through periodic sourcing initiatives.  So why are more and more people thinking that the time has come to implement a Vendor Management Organization?  As we work with our clients, we find there are three common drivers:

1. Increasing complexity of relationships,
2. Increasing pressure from regulators, consumers and customers, and
3. A phenomenal increase in the volume of activity that is done outside the four walls of organizations.

see more on:   via www.sig.org