Inadequate tiering of your software suppliers can cause you many problems: It can make it harder to know where to focus your vendor management resources and difficult to differentiate between suppliers you want to use more frequently and those you want to restrict to their current footprint, or even replace entirely. This report describes best practices for classifying suppliers into tiers that drive your sourcing strategy and that can also help you focus your operational vendor monitoring. It also explains how these objectives are very different, and hence why one tiering model is insufficient to meet both goals.