Chapter

Vendor Relationship Management

Vendor relationship management (VRM) refers to the process of building and maintaining productive relationships with external vendors that provide IT goods and services to an organization. Effective VRM can help organizations optimize IT spend, mitigate risk, and achieve desired business outcomes.

VRM may include:

  1. Establishing clear expectations: Organizations should establish clear expectations with vendors, including service level agreements, key performance indicators, and pricing structures.
  2. Monitoring vendor performance: Organizations should monitor vendor performance against established expectations, and provide feedback to vendors to address any areas of concern.
  3. Facilitating communication: Organizations should establish effective communication channels with vendors, including regular meetings and status reports.
  4. Managing risk: Organizations should identify and manage risks associated with vendor relationships, including cybersecurity risks, compliance risks, and reputational risks.
  5. Resolving disputes: Organizations should have a process in place to resolve disputes with vendors, such as through mediation or arbitration.

Effective VRM requires a deep understanding of the organization’s IT needs, as well as the vendor landscape and market trends. IT executives should ensure that their VRM strategy is aligned with their organization’s IT sourcing goals and is well-documented.

The Vendor Relationship Management category within the CIO Reference Library provides CIOs and other IT executives with a comprehensive set of resources that illustrate effective VRM practices. This category includes a range of resources, such as articles, whitepapers, and case studies, that offer insights into different aspects of VRM, such as establishing clear expectations, monitoring vendor performance, facilitating communication, managing risk, and resolving disputes. By leveraging these resources, CIOs and IT executives can gain a deeper understanding of effective VRM practices and build and maintain productive relationships with vendors to achieve desired business outcomes.

Vendor Relationship Management Guide

This guide provides useful advice on creating partnerships with key solution providers. These alliances improve delivery quality and benefit realization at the same time sharing risks with key suppliers.

Software Licensing and Pricing Best Practices

This presentation discusses: How can organizations reduce cost and risk in software deals? What are the hidden costs in SaaS agreements, and how can organizations avoid them?

A Structured Approach to Vendor Selection

This whitepaper presents a generic template and guidelines for vendor selection. It does not promise to be a complete or definitive work on the topic nor a de-facto standard for vendor selection.

Managing Dispersed Expertise in Offshore Outsourcing

 This article uses the practices implemented by Indian outsourcing company Tata Consultancy Services (TCS) to discuss the issue of managing knowledge and expertise spread across organizational and geographic boundaries in an offshore outsourcing arrangement.

Drafting Outsourcing Contracts

This excellent presentation provides an in-depth discussion on contracts related to outsourcing – what are the key elements in an outsourcing contract? What are the essential components of contract management?

Best Practices in High-Performance Outsourcing

This paper discusses the key learning/best practices, that lead to high performance outsourcing, gleaned from the masters i.e. executives who have been there, done that and can claim success in the world of outsourcing services! 

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