Supplier Management Tactics For The Changing Services Ecosystem

The market for IT services is evolving rapidly, and the tactics that sourcing and vendor management professionals use to select, negotiate, and manage supplier relationships must evolve with it. The impact of new technologies such as software-as-a-service and cloud-based delivery is becoming far more relevant to sourcing strategy, giving rise to new suppliers that could rapidly disrupt your organization's most strategic vendors. New delivery models will increasingly alter the dynamics of supplier behavior and challenge traditional contract and negotiation strategies. To succeed in this new environment, sourcing and vendor management (SVM) professionals must learn to effectively segment their suppliers and use this segmentation to apply different sourcing tactics to different supplier types. Among the most significant challenges will be moving away from a strict focus on cost reduction and moving toward a more active approach in eliciting value and innovation from suppliers.