Homework 6
ghv1293
VendorManagement.pptxHarrisburg University ISEM 547
Vendor Management
Objectives
Vendor Management Overview
Vendor Manager/VRM
Vendor Management Best Practices
Vendor Management Selection
Vendor Managaement Framework
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Vendor Management
Overview
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What is Vendor Management?
Vendor Management is a term used to describe the process of finding, qualifying and doing business with vendors. Common activities include researching vendors, negotiating contracts, obtaining quotes, evaluating performance, driving innovation and service excellence, creating and updating vendor files, and ensuring contract compliance (internal and external), work order, invoicing/billing, and payment approvals.
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What does a Vendor Manager/VRM do?
Vendor Manager: (also referred to as vendor relationship managers) handle relationships with vendors and their company’s operational department.
Organizations provide them with the authority and mechanisms to engage, govern, manage the relationship, optimize and to negotiate on behalf of their company for the best value of purchases that support its operations and business objectives.
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What does a Vendor Manager/VRM do?
Manage the Relationship
Contract Management
Engagement Management
Governance Oversight
Multivendor Integrations
Problem Management
Driving Mutual Value
Document Management
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Vendor Management
Success Tips & Best Practices
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Vendor Management - Tips
Share Information and Priorities (Need to know basis)
Balance Commitment and Competition
Allow key vendors to help you strategize
Build Long-Term Relationships
Seek to Understand Your Vendor’s Business Too
Negotiate a Win-Win Agreement
Come Together on Value
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Vendor Management – Best Practices
Vendor Selection
Scrutinize the Prospects
Remain Flexible
Monitor Performance
Communicate
IT Management Framework
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Vendor Management
Vendor Management Selection Process
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Vendor Management – Selection Process
Analyze Business Requirements
Vendor Search - Request for Information (RFI)
Request for Proposal (RFP)
Proposal Evaluation & Vendor Selection
Contract Negotiation Strategies
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Vendor Management – Selection Process
Assemble an Evaluation Team
Evaluation Team – Define Needs & Requirements
Define the Product, Material or Service
Define the Technical and Business Requirements
Define the Vendor Requirements
Publish a Requirements Document for Approval
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Vendor Management – Selection Process
Evaluation Team – Vendor Search
Compile a List of Possible Vendors
Select Vendors to Request More Information From
Write a Request for Information (RFI)
Evaluate Responses and Create a "Short List" of Vendors
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Vendor Management – Selection Process
Select Evaluation Team Members & SMEs – Create Request for Proposal (RFP)
Submission Details
Introduction and Executive Summary
Business Overview and Background
Detailed Specifications
Assumptions and Constraints
Terms and Conditions
Financial & Pricing (Separate from Technical Submission)
Selection Criteria
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Vendor Management – Selection Process
Evaluation Team (Advisors & Voting Members) – Vendor Evaluation & Selection
Preliminary Review of All Vendor Proposals
Record Business Requirements and Vendor Requirements
Assign Importance Value for Each Requirement
Assign a Performance Value for Each Requirement
Calculate a Total Performance Score
Select the Winning Vendor
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Vendor Management – Selection Process
Specific Evaluation Team (Negotiators & Advisors) – Vendor Negotiations
List Rank Your Priorities along with alternatives
Know the Difference Between What You Need and What You Want
Know Your Bottom Line So You Know When to Walk Away
Define Any Time Constraints and Benchmarks
Assess Potential Liabilities and Risks
Confidentiality, non-compete, dispute resolution, changes in requirements
Do the Same for Your Vendor (i.e. Walk a Mile in Their Shoes)
Best and Final Offer (BAFO)
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Vendor Management – Selection Process
Other Considerations
Legal Counsel
Financial Viability Assessment & Financial Expert
Logistics
Authority to Negotiate
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Vendor Management
Establishing a Vendor Management Framework
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Vendor Management Framework
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Vendor Management Program (Mission & Objective)
Leverage Best Practices
Optimize External Spend
Drive Innovation
Rationalize Vendors
Manage contract performance, relationship, and demand
Improve Vendor Relationships
Reduce Risk
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Vendor Management Program (Org & Staffing)
Determine the best organizational structure
Determine the Staffing Requirements and Compliment
Define the roles, duties & responsibilities
Skill-sets & Competencies
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Vendor Management Program (Value Metrics)
Efficiencies
Performance
Relationship Quality
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Vendor Management Program (Optimize Vendor Portfolio)
Strategic Vendors
Legacy Vendors
Emerging Vendors
Tactical Vendors
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Vendor Management Program (Create Strategic Management Program)
Develop a formal IT vendor management program, defining the organization, governance, and processes, and procedures necessary to effectively manage a multivendor environment in a comprehensive manner.
Strategic vendor management is a discipline of managing those vendors that are most critical to the business and is intended to replace transaction driven or ad-hoc approach to vendor management.
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Vendor Management Framework (Vendor Acquisition & Divestiture)
Evaluate Selected Vendors
Negotiate Contracts
Onboard Vendors
Manage Transitions
Vendor Dispositions
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Vendor Management Framework (Managing Vendors)
Manage Contracts & Finances
Manage Performance
Manage Relationships
Align Demand & Capacity Management
Manage Vendor Risk
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Vendor Management Framework (Establish & Articulate Value)
Manage Communications Plan
Establish Vendor Operating Model
Define & Manage Continuous Improvement
Drive Innovation
Develop Dashboards & Analytics
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Vendor Governance
Vendor Governance: vendor governance assigns the rights and responsibilities for all the decisions regarding the use and management of vendors, with the objective of managing the organization’s risks and achieving desired business outcomes.
Vendor governance is a subset of corporate and IT governance frameworks.
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Assignments
Chapters 5, 6, 10 (IT Managers Handbook)
Homework 6: Cloud & Vendor Management
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