Outsourcing Toolkit

Companies using 'counsellors' to manage IT suppliers

Nick Heath silicon.com

Published: 28 Mar 2008 13:28 GMT

An increasing number of companies buying IT products and services are hoping to avoid contract problems or even a messy termination by setting up a "vendor-management office" to keep tighter control of suppliers, according to a report by Forrester Research.

Vendor-management offices (VMOs) are essentially marriage counsellors for IT vendors and clients, helping to prevent them straying from the bliss of their contract service-level agreements.

A team of experts within the VMO help choose the best vendors, negotiate discounts, monitor their performance and reinforce best practice.

The survey of 1,000 IT decision makers found 51 percent of those from Europe had formalised VMOs, as had 47 percent in the US.

Almost half (48 percent) of respondents said vendor-management capabilities were either on the agenda or a critical priority.

John C McCarthy, principal analyst with Forrester Research, said in a statement: "These efforts represent a key part of firms' strategy to bring more maturity and process discipline to IT and take an 'activist sourcing' approach."

The report states that VMOs can also help focus spending by assessing the account's importance to the supplier, and drive supplier accountability by scoring vendor performance.

Credit: 'Counsellors' to keep vendor-client marriages sweet from silicon.com