Connie Allison
Changing Your Focus
Sourcing Looking for lowest price Placing orders
Vendor Management Maximize company’s
technology investments Looking for business advice,
guidance, expertise, value that vendors could provide
Total Cost of Ownership• Qualifying vendor performance• Managing performance
Managing entire vendor relationship lifecycle
Guth, Stephen, The Vendor Management Office
Vendor Management Competencies
Contract Management Relationship Management Performance Management
Gartner, Vendor Toolkit
Relationship Management (internal and external)
This is an overarching role that builds and governs the relationship with one or more vendors. This role is also sometimes responsible for managing relationships with organization stakeholders such as business users, enterprise architects, operations managers, risk managers and legal personnel. The relationship manager ensures that relationships work effectively across all vendors and with the organization as a whole to achieve desired business outcomes for all parties where possible.
Gartner, Vendor Toolkit
BenefitsTo Liberty Relationship quality
• Improved customer satisfaction, vendor collaboration and cooperation
• Improved relationship scores in scorecards
• Responsiveness • Flexibility • Ease to work with • Access to vendors
Gets vendors energized to do business with company
Protects against bad deals if we have long-term relationships
Offers better insights both directions
To Vendors Predictable revenue stream Helps vendor grow their own ROI Development into new markets/use cases Centralizes relationship management Facilitates access to opportunities Provides feedback (ex. job interview with no
response that you were not hired nor why) Private sounding board (ex. guidance on
how to communicate bad news to company) Information about org changes at company
(official changes or change in decision makers)
Levels of Partnerships
Select carefully which companies will be most beneficial to manage
Define levels• What companies are at each level• What are expectations for various levels
Focus: Strategic and Tactical
Sample Selection Process
Sample Expectations
Liberty Responsibilities
Expectation
Share Strategic Plans
CIO Planning Mtg.
Travel to headquarters
IT Leadership Mtg. (on site)
Reply to annual surveys
Routine updates on partnership (call or email)
Triggered events (i.e. product dissatisfaction)
New product evaluations
Sit on advisory boards
Referrals
Vendor Responsibilities
Expectation
Engaged Account team (on site, responsive to email, actively learning Liberty)
Technology Resources and Planning efforts
Media Releases
Insights to and influence on product roadmaps
Assist with multi-vendor partnerships
Effective support and escalation paths
Offer avenues of influence (advisory boards, product reviews, etc.)
Academic partnerships
Negotiations
Maximize benefits to both sides Don’t ruin good relationships needlessly
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Vendor Profitability
Vendor not profiting? Expect it to reduce its own costs or increase fees.
Not getting value? Find value or terminate the relationship.a.Find a better solutionb.Train the usersc.Improve processesd.Invest in infrastructure
Vendor making more
than expected? Negotiate a lower
price, better terms, or higher level of service.
Vendor Renegotiation Drivers
“We used to squeeze our vendors as hard as possible. Now, we understand that they add more value when we let them make some money. We aim for moderate profitability.”-CIO, Health Care
Info-Tech Research Group
What does “trust” mean in this context?
Covey, Stephen M.R., The Speed of Trust
13 Behaviors of Trust
Talk Straight Demonstrate Respect Create Transparency Right Wrongs Show Loyalty Deliver Results Get Better
Confront Reality Clarify Expectations Practice Accountability Listen First Keep Commitments Extend Trust
Covey, Stephen M.R., The Speed of Trust
What happens when:
Things go badly Changes in key personnel Multiple people have varying perceptions
of the relationship
SUMMARY: Vendor Relationships Intentional Focused only on certain accounts Beneficial to both sides Build via Trust• Character• Competence
References
Guth, Stephen. The Vendor Management Office: Unleashing the Power of Strategic Sourcing. Lulu Enterprises, 2007.
Covey, Stephen M.R. The Speed of Trust: The One Thing That Changes Everything. Free Press, 2006.
Various research articles• Info-Tech Research Group• Gartner
Questions?