Jump Start Your Vendor Management Initiative

Each year, IT organizations spend more money “outsourcing” tasks, activities, applications, functions, and other items.
The increased spend and associated outsourcing leads to less control, and more risk for IT organizations. Managing this becomes a higher priority for IT, but many IT organizations are ill-equipped to do this proactively.

Our Advice

Critical Insight

Vendor management is not “plug and play” – each organization’s vendor management initiative (VMI) needs to fit its culture, environment, and goals. There are commonalites among vendor management initiatives, but the key is to adapt vendor management principles to fit your needs, not the other way around.
All vendors are not of equal importance to an organization. Internal resources are a scarce commodity and should be deployed so that they provide the best return on the organization’s investment. Classifying or segmenting your vendors allows you to focus your efforts on the most important vendors first, allowing your VMI to have the greatest impact possible.
Having a solid foundation is critical to the VMI’s ongoing success. Whether you will be creating a formal vendor management office or using vendor management techniques, tools, and templates “informally,” starting with the basics is essential. Make sure you understand why the VMI exists and what it hopes to achieve, what is in and out of scope for the VMI, what strengths the VMI can leverage and the obstacles it will have to address, and how it will work with other areas within your organization.

Impact and Result

Build and implement a vendor management initiative tailored to your environment.
Create a solid foundation to sustain your vendor management initiative as it evolves and matures.
Leverage vendor management-specific tools and templates to manage vendors more proactively and improve communication.
Concentrate your vendor management resources on the right vendors.
Build a roadmap and project plan for your vendor management journey to ensure you reach your destination.
Build collaborative relationships with critical vendors.

Jump Start Your Vendor Management Initiative Research & Tools

Start here – read the Executive Brief

Read our concise Executive Brief to find out why you should jump start a vendor management initiative, review Info-Tech’s methodology, and understand the four ways we can support you in completing this project.

Jump Start Your Vendor Management Initiative – Executive Brief

1. Plan

Organize your VMI and document internal processes, relationships, roles, and responsibilities. The main outcomes from this phase are organizational documents, a baseline VMI maturity level, and a desired future state for the VMI.

2. Build

Configure and create the tools and templates that will help you run the VMI. The main outcomes from this phase are a clear understanding of which vendors are important to you, the tools to manage the vendor relationships, and an implementation plan.

3. Run

Begin operating the VMI. The main outcomes from this phase are guidance and the steps required to implement your VMI.

4. Review

Identify what the VMI should stop doing, start doing, and continue doing as it improves and matures. The main outcomes from this phase are ways to advance the VMI and maintain internal alignment.

Member Testimonials

After each Info-Tech experience, we ask our members to quantify the real-time savings, monetary impact, and project improvements our research helped them achieve. See our top member experiences for this blueprint and what our clients have to say.

9.4/10

Overall Impact

$146,030

Average $ Saved

Average Days Saved

Client

Experience

Impact

$ Saved

Days Saved

Testimonial

Shared Services Canada - Enterprise Architecture Directorate

Workshop

9/10

$32,195

Facilitator stimulated lots of great discussion within the team. There's general positive energy following the workshop.

Amedisys Holding, LLC

Guided Implementation

10/10

$12,330

Valuable sharing of expertise and best practices as well as suggested blue prints and score cards

Liquor Control Board of Ontario

Workshop

10/10

$25,000

Chuck was a really great in making sure we got through all of the content in a meaningful manner. It was a great session and really improved our s... Read More

Capital Regional District

Guided Implementation

9/10

N/A

The session was very informal but provided a number of nuggets.

The American Institute of Architects

Guided Implementation

9/10

N/A

Calls with Steve are very helpful as we are doing a guided implementation. His insight and expertise have made completing the spreadsheet (s) much ... Read More

Lyttelton Port Company

Guided Implementation

9/10

$6,849

Great to be exposed to a structured methodology - easy to consume

CalSTRS

Guided Implementation

10/10

N/A

The information provided was very much on topic for what CalSTRS was looking for in terms of a general overview to jump start this initiative. The ... Read More

Cengage Learning

Workshop

10/10

$68,500

Best - Knowledgeable facilitator that guided us through the tool set, process, and recommendations. This should allow us to get the program up and ... Read More

OTIP/RAEO Benefits Incorporated

Guided Implementation

9/10

$10,000

State of Ohio - Ohio Department of Developmental Disabilities

Guided Implementation

10/10

$21,920

Best? Learning something new to get me out of the norm and allowing for professional growth. Worst? Learning something new at the stage in my c... Read More

Government of Bermuda

Workshop

9/10

$137K

120

The best parts of the experience was interacting with my peers and Info-Tech and the tea. The worst parts was the realization that we know what ... Read More

Foodtastic Restaurant Franchises

Guided Implementation

10/10

$13,700

Choctaw Nation Of Oklahoma

Workshop

9/10

$685K

I very much appreciated the onsite co-facilitation approach. This workshop would not have been very successful in a virtual setting. Phil and Ste... Read More

Washington Department of Fish and Wildlife

Workshop

9/10

$274K

Best - Chuck and Infotech's experience in the topic was top notch. Worst - We were not able to get one area of our business to be able to attend... Read More

State of Kansas Human Services

Guided Implementation

9/10

$15,755

PGT INNOVATIONS

Guided Implementation

8/10

N/A

Tools will help our organization become more organized, ensure visibility into our vendors, etc. Appreciated the Hitchhiker deck focusing on the i... Read More

Crossover Health

Workshop

9/10

$13,700

Irving Oil Limited

Guided Implementation

9/10

$500K

Government of Saskatchewan-Ministry of SaskBuilds and Procurement- Information Technology Division

Guided Implementation

9/10

$50,000

Old Republic National Ancillary Services, Inc. (ORNAS)

Workshop

10/10

$137K

Best: - Chuck French's facilitation. Chuck did a masterful job of balancing pace, engagement, and results. Exceptional facilitation. - Practical ... Read More

Higginbotham Companies

Guided Implementation

10/10

N/A

Meeting with Donna Glidden was in incredibly valuable time! We are embarking on a Vendor Management process and the guidance provided exceeded our ... Read More

LInea Directa SAS

Guided Implementation

10/10

N/A

It was a very pleasant experience, the specialist of the subject dominates the topic and gave me many aspects to consider in the task we have set o... Read More

Frankenmuth Insurance Company

Workshop

9/10

$34,250

The workshop brought together great tools and the experience of InfoTech to guide us through challenging topics around vendor management. Phil (and... Read More

Hydro Tasmania

Workshop

10/10

N/A

Steve and Gerald are clearly SMEs in their area, and the standard data pack they are presenting is relevant and applicable. The real standout has b... Read More

University of York

Workshop

9/10

$128K

Best- Chuck was a great facilitator and gave time for reflection and challenge. We came away with a structure and toolkit to build on internally W... Read More

Magnitude Capital

Guided Implementation

10/10

N/A

No bad parts. Did not wast any time. Brought up some useful insights we had not thought of. Accurately captured what was disucssed and delvier... Read More

Nevada Department of Transportation

Workshop

9/10

$68,500

Really enjoyed the presenters and their ability to adjust to our needs.

Lucid USA, Inc.

Guided Implementation

10/10

$137K

My experience has been great all around. Steve has been a huge asset regarding our VMO initiative. His dedication, support, and knowledge have been... Read More

University of North Texas System

Workshop

10/10

$64,999

Steve and Phil provided us with a solid foundation to start our IT VMI journey. They displayed vast professional knowledge of the subject matter, ... Read More

City of Colorado Springs

Workshop

9/10

$97,499

There was no worst part. Everything presented had value and Donna and Steve were able to relate this information in terms that we could understand.... Read More

Load More Testimonials

Vendor Management

Get more from your vendors than just a bill.
This course makes up part of the Financial Management Certificate.

Course Modules: 4
Estimated Completion Time: 2-3 hours

Featured Analysts:
John Pinard, Sr. Research Director, Enterprise Applications
James Alexander, SVP of Research and Advisory, CIO Practice

Now Playing:
Academy: Vendor Management | Executive Brief

An active membership is required to access Info-Tech Academy

Workshop: Jump Start Your Vendor Management Initiative

Workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn't enough, we offer low-cost delivery of our project workshops. We take you through every phase of your project and ensure that you have a roadmap in place to complete your project successfully.

Module 1: Plan

The Purpose

Getting Organized

Key Benefits Achieved

Defined Roles and Goals for the VMI

Activities

Outputs

1.1

Mission Statement and Goals

Completed Mission Statement and Goals

1.2

Scope

List of Items In Scope and Out of Scope for the VMI

1.3

Strengths and Obstacles

List of Strengths and Obstacles for the VMI

1.4

Roles and Responsibilities – OIC Chart

Completed OIC Chart

1.5

Process Mapping

Sample Process Map for One Process

1.6

Vendor Inventory Tool (Overview)

Begun Using Vendor Inventory Tool

Module 2: Plan/Build/Run

The Purpose

Build VMI Tools and Templates

Key Benefits Achieved

Configured Tools and Templates for the VMI Based on Its Roles and Goals

Activities

Outputs

2.1

Maturity Assessment

Completed Maturity Assessment.

2.2

Structure and Job Descriptions

Sample Job Descriptions and Phrases.

2.3

Attributes of a Valuable Vendor

List of Attributes of a Valuable Vendor.

2.4

Classification Model

Configured Classification Model.

2.5

Risk Assessment Tool

Configured Risk Assessment Tool.

2.6

Scorecards and Feedback

Configured Scorecard and Feedback Questions.

2.7

Business Alignment Meeting Agenda

Configured Business Alignment Meeting Agenda.

Module 3: Build/Run

The Purpose

Continue Building VMI Tools and Templates

Key Benefits Achieved

Configured Tools and Templates for the VMI Based on Its Roles and Goals

Activities

Outputs

3.1

Relationship Alignment Document

Relationship Alignment Document Sample and Checklist

3.2

Vendor Orientation

Vendor Orientation Checklist

3.3

Policies and Procedures

Policies and Procedures Checklist

3.4

3-Year Roadmap

Completed 3-Year Roadmap

3.5

90-Day Plan

Completed 90-Day Plan

3.6

Quick Wins

List of Quick Wins

3.7

Reports

List of Reports

3.8

Kickoff Meeting

Module 4: Review

The Purpose

Review the Past 12 Months of VMI Operations and Improve

Key Benefits Achieved

Keeping the VMI Aligned With the Organization’s Goals and Ensuring the VMI Is Leveraging Leading Practices

Activities

Outputs

4.1

Develop/Improve Vendor Relationships.

4.2

Assess Compliance.

4.3

Incorporate Leading Practices.

4.4

Leverage Lessons Learned.

4.5

Maintain Internal Alignment.

4.6

Update Governances.

Jump Start Your Vendor Management Initiative

Create and implement a vendor management framework to begin obtaining measurable results in 90 days.

EXECUTIVE BRIEF

Analyst Perspective

What is vendor management?

When you read the phrase “vendor management,” what comes to mind? This isn’t a rhetorical question. Take your time … I’ll wait.

Unfortunately, those words conjure up a lot of different meanings, and much of that depends on whom you ask. Those who work in the vendor management field will provide a variety of answers. To complicate matters, those who are vendor management “outsiders” will have a totally different view of what vendor management is. Why is this important? Because we need a common definition to communicate more effectively, even if the definition is broad.

Let’s start creating a working definition that is not circular. Vendor management is not simply managing vendors. That expression basically reorders the words and does nothing to advance our cause; it only adds to the existing confusion surrounding the concept.

Vendor management is best thought of as a spectrum or continuum with many points rather than a specific discipline like accounting or finance. There are many functions and activities that fall under the umbrella term of vendor management: some of them will be part of your vendor management initiative (VMI), some will not, and some will exist in your organization but be outside the VMI. This is the unique part of vendor management – the part that makes it fun, but also the part that leads to the confusion. For example, accounts payable sits within the accounting department almost exclusively, but contract management can sit within or outside the VMI. The beauty of vendor management is its flexibility; your VMI can be created to meet your specific needs and goals while leveraging common vendor management principles.

Every conversation around vendor management needs to begin with “What do you mean by that?” Only then can we home in on the scope and nature of what people are discussing. “Managing vendors” is too narrow because it often ignores many of the reasons organizations create VMIs in the first place: to reduce costs, to improve performance, to improve processes, to improve relationships, to improve communication, and to manage risk better.

Vendor management is a strategic initiative that takes the big picture into account … navigating the cradle to grave lifecycle to get the most out of your interactions and relationships with your vendors. It is flexible and customizable; it is not plug and play or overly prescriptive. Tools, principles, templates, and concepts are adapted rather than adopted as is. Ultimately, you define what vendor management is for your organization.

We look forward to helping you on your vendor management journey no matter what it looks like. But first, let’s have a conversation about how you want to define vendor management in your environment.

This is a picture of Phil Bode, Principal Research Director, Vendor Management at Info-Tech Research Group.

Phil Bode
Principal Research Director, Vendor Management
Info-Tech Research Group

Executive Summary

Your Challenge

Each year, IT organizations “outsource” tasks, activities, functions, and other items. During 2021:

Spend on as-a-service providers increased 38% over 2020.*
Spend on managed service providers increased 16% over 2020.*
IT service providers increased their merger and acquisition numbers by 47% over 2020.*

*Source: Information Services Group, Inc., 2022.

This leads to more spend, less control, and more risk for IT organizations. Managing this becomes a higher priority for IT, but many IT organizations are ill-equipped to do this proactively.

Common Obstacles

As new contracts are negotiated and existing contracts are renegotiated or renewed, there is a perception that the contracts will yield certain results, output, performance, solutions, or outcomes. The hope is that these will provide a measurable expected value to IT and the organization. Oftentimes, much of the expected value is never realized. Many organizations don’t have a VMI to help:

Ensure at least the expected value is achieved.
Improve on the expected value through performance management.
Significantly increase the expected value through a proactive VMI.

Info-Tech’s Approach

Vendor management is a proactive, cross-functional lifecycle. It can be broken down into four phases:

Plan
Build
Run
Review

The Info-Tech process addresses all four phases and provides a step-by-step approach to configure and operate your VMI. The content in this blueprint helps you quickly establish your VMI and set a solid foundation for its growth and maturity.

Info-Tech Insight

Vendor management is not a one-size-fits-all initiative. It must be configured:

For your environment, culture, and goals.
To leverage the strengths of your organization and personnel.
To focus your energy and resources on your critical vendors.

Executive Summary

Your Challenge

Spend on managed service providers and as-a-service providers continues to increase. In addition, IT services vendors continue to be active in the mergers and acquisitions arena. This increases the need for a VMI to help with the changing IT vendor landscape. In 2021, there was increases of:

38%

Spend on As-a-Service Providers

16%

Spend on Managed Services Providers

47%

IT Services Merger & Acquisition Growth (Transactions)

Source: Information Services Group, Inc., 2022.

Executive Summary

Common Obstacles

When organizations execute, renew, or renegotiate a contract, there is an “expected value” associated with that contract. Without a robust VMI, most of the expected value will never be realized. With a robust VMI, the realized value significantly exceeds the expected value during the contract term.

A contract’s realized value with and without a vendor management initiative

Two bars are depicted, showing that vendor collaboration and vendor performance management exceed expected value with a VMI, but without VMI, 75% of a contract's expected value can disappear within 18 months.

Source: Based on findings from Geller & Company, 2003.

Executive Summary

Info-Tech’s Approach

A sound, cyclical approach to vendor management will help you create a VMI that meets your needs and stays in alignment with your organization as they both change (i.e. mature and grow).

This is an image of Info-Tech's approach to VMI. It includes the following four steps: 01 - Plan; 02 - Build; 03 - Run; 04 - Review

Info-Tech’s Methodology for Creating and Operating Your VMI

	Phase 1: Plan	Phase 2: Build	Phase 3: Run	Phase 4: Review
Phase Steps	1.1 Mission Statement and Goals 1.2 Scope 1.3 Strengths and Obstacles 1.4 Roles and Responsibilities 1.5 Process Mapping 1.6 Charter 1.7 Vendor Inventory 1.8 Maturity Assessment 1.9 Structure	2.1 Classification Model 2.2 Risk Assessment Tool 2.3 Scorecards and Feedback 2.4 Business Alignment Meeting Agenda 2.5 Relationship Alignment Document 2.6 Vendor Orientation 2.7 Job Descriptions 2.8 Policies and Procedures 2.9 3-Year Roadmap 2.10 90-Day Plan 2.11 Quick Wins 2.12 Reports	3.1 Classify Vendors 3.2 Conduct Internal “Kickoff” Meeting 3.3 Conduct Vendor Orientation 3.4 Compile Scorecards 3.5 Conduct Business Alignment Meetings 3.6 Work the 90-Day Plan 3.7 Manage the 3-Year Roadmap 3.8 Measure and Monitor Risk 3.9 Issue Reports 3.10 Develop/Improve Vendor Relationships 3.11 Contribute to Other Processes	4.1 Assess Compliance 4.2 Incorporate Leading Practices 4.3 Leverage Lessons Learned 4.4 Maintain Internal Alignment 4.5 Update Governances
Phase Outcomes	This phase helps you organize your VMI and document internal processes, relationships, roles, and responsibilities. The main outcomes from this phase are organizational documents, a baseline VMI maturity level, and a desired future state for the VMI.	This phase helps you configure and create the tools and templates that will help you run the VMI. The main outcomes from this phase are a clear understanding of which vendors are important to you, the tools to manage the vendor relationships, and an implementation plan.	This phase helps you begin operating the VMI. The main outcomes from this phase are guidance and the steps required to implement your VMI.	This phase helps the VMI identify what it should stop doing, start doing, and continue doing as it improves and matures. The main outcomes from this phase are ways to advance the VMI and maintain internal alignment.

Insight Summary

Insight 1

Vendor management is not “plug and play” – each organization’s vendor management initiative (VMI) needs to fit its culture, environment, and goals. While there are commonalities and leading practices associated with vendor management, your initiative won’t look exactly like another organization’s. The key is to adapt vendor management principles to fit your needs.

Insight 2

All vendors are not of equal importance to your organization. Internal resources are a scarce commodity and should be deployed so that they provide the best return on the organization’s investment. Classifying or segmenting your vendors allows you to focus your efforts on the most important vendors first, allowing your VMI to have the greatest impact possible.

Insight 3

Having a solid foundation is critical to the VMI’s ongoing success. Whether you will be creating a formal vendor management office or using vendor management techniques, tools, and templates “informally,” starting with the basics is essential. Make sure you understand why the VMI exists and what it hopes to achieve, what is in and out of scope for the VMI, what strengths the VMI can leverage and the obstacles it will have to address, and how it will work with other areas within your organization.

Blueprint Deliverables

The four phases of creating and running a vendor management initiative are supported with configurable tools, templates, and checklists to help you stay aligned internally and achieve your goals.

VMI Tools and Templates

Build a solid foundation for your VMI and configure tools and templates to help you manage your vendor relationships.

Key Deliverables:

Jump – Phase 1 Tools and Templates Compendium
Jump – Phase 2 Tools and Templates Compendium
Jump – Phase 2 Vendor Classification Tool
Jump – Phase 2 Vendor Risk Assessment Tool

A suite of tools and templates to help you create and implement your vendor management initiative.

Jump Start Your Vendor Management Initiative visualization

Create and implement a vendor management framework to begin obtaining measurable results in 90 days.

About Info-Tech

Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.

We produce unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. We partner closely with IT teams to provide everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.

What Is a Blueprint?

A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your IT problems.

Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.

Table of Contents

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Guided Implementation 1: Plan

Call 1: Mission statement and goals, scope, and strengths and obstacles.
Call 2: Roles and responsibilities and process mapping.
Call 3: Charter and vendor inventory.
Call 4: Maturity assessment and VMI structure.

Guided Implementation 2: Build and Run

Call 1: Classification model.
Call 2: Risk assessment.
Call 3: Scorecards and feedback and business alignment meetings.
Call 4: Relationship alignment document, vendor orientation, and job descriptions.
Call 5: Policies and procedures and reports.
Call 6: 3-year roadmap.
Call 7: 90-day plan and quick wins.