Vendor Management Profile: Public Sector

Half of public sector firms have established a centralized vendor management office (VMO), a high portion of which (41%) reside in IT. Many of these groups also handle key relationships with IT providers — software and hardware vendors, and networking and telecom product and service providers. Public sector firms are very good at getting vendors to commit to business outcomes during contracting (85%), and more than three-quarters of their VMOs (76%) also use a balanced scorecard methodology to measure vendor performance against business outcomes. A higher percentage (33%) of public sector firms have also developed additional tactics to monitor and measure vendor relationship success. Public sector firms are proactive about evaluating the health of their IT vendors, which is done in a variety of ways: conducting periodic risk assessments, evaluating the vendor's financial performance and market position, and tracking new product announcements.