For Sourcing & Vendor Management Professionals (Length: 14 pages)

January 25, 2008

Building An Effective Vendor Management Office

by John C. McCarthy

with Christine Ferrusi Ross, Francesca Bartolomey, Sean Galvin

Executive Summary (This is a document excerpt)

Firms are ramping up their vendor management capabilities, specifically in building a vendor management office (VMO). These efforts represent a key part of firms' strategy to bring more maturity and process discipline to IT and take an "activist sourcing" approach. Companies want to drive costs down and drive IT's performance up. Vendor management no longer represents a contracting function in procurement; rather, firms have plans to create full supplier relationship life-cycle governance capabilities. Forrester has identified some key best practices for managing vendors; these include supplier tiering and supplier performance assessments.