Best Practice Report

Building An Effective Vendor Management Office

January 25th, 2008
John McCarthy, null
John McCarthy
With contributors:
Christine Ferrusi Ross , Francesca Bartolomey

Summary

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 Vendor management no longer represents a contracting function in procurement; rather, firms have plans to create full supplier relationship life-cycle governance capabilities.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.

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