Comments for 360° Vendor Management http://360vendormanagement.com Best Practices in Outsourcing and Vendor Management Thu, 05 May 2011 13:47:00 +0000 http://wordpress.org/?v=2.9.2 hourly 1 Comment on Outsourcing Governance and “Who Owns Supplier Performance Management?” by Steven Grimmett http://360vendormanagement.com/2009/12/16/outsourcing-governance-and-who-owns-supplier-performance-management/comment-page-1/#comment-1212 Steven Grimmett Tue, 22 Mar 2011 18:05:41 +0000 http://360vendormanagement.com/?p=376#comment-1212 I'm a Vendor Management professional based in the UK. Primarily focused at this time on the management of Telecoms Outsourcing Agreements. Originally the role of a vendor manager was seen as a means to identify and subsequently enforce contractual obligations, but in my case this has developed into and industry expert. Involved in everything from transactional business as usual management and tracking, all the way to overarching cross function and cross tower strategies and operating models. This is the key element to the role I have "subject matter Expert". Telecoms was and is still seen as something of a black art with Telecoms vendors seen as predatory and opportunitistic. Creating relationships based on mistrust. Poor focus on delivery and commercial management from the vendors adds to this impression that the customer is being ripped off. In fact what I found was that the behaviours on both sides of the agreement meant it was doomed to fail from the outset. A poorly defined beginning will result in a poor agreement and subsequently a poor deliver and experience for the customer. Lots of focus on cutting the right deal and nothing on how we actually make those requirements materialise in real life. Or measurement of success against original expectations. What also came to light over time was that procurement, although very adept at cost negotiation, are not necessarily as competent at any form of relationship or performance management. Their targets are in direct opposition to operational and delivery focused staff for creating win win situations from long term strategic relationships. Once that cost target has been achieved its time to move onto the next challenge, leaving someone else to deal with the contract that’s left behind. This also means they have less concern over the fit for purpose nature of the contract that’s negotiated, this is the most critical and some would say obvious reason why operational teams rarely end up with what they want or need. Ultimately I am still trying to define what a company expects from Vendor Management. It differs from company to company depending on what they deem of importance and how the company is structured. It’s seen to cover a multitude of sins, from strategic sourcing, contract negotiations, supplier performance management, ect……. Some key themes are evolving. 1. Innovation - create, proliferate and market innovations, to be able to spot what is innovative and how that could bring additional value to our organisation. Key problem is the ability to take a product from your vendor base, productise and commercialise this out to your customers with the minimum amount of effort and cost, while maximising margin and revenue. 2. Intangible relationship management - Creating genuine relationships built on trust and respect, intangible benefits that cannot be measured as such but their "value" is worth its weight in gold. The good cop to procurements bad cop. 3. Marking Procurement - Procurement goals tend to be one dimensional, focusing primarily on the cost avoidance and cost reductions achieved. Even when these are at the risk of operational efficiency or long term growth. You cannot apply the same procurement strategies to paper clips as you can to global outsourced agreements. 4. Business Acumen - To be less focused on the obvious benefits, bring subject matter expertise into a proposal. Scoring matrixes on RFP's are all well and good but they cannot replace entrepreneurialism, gut feelings and experience. 5. Engagement – Communication is critical to the success of any relationship. Vendor management is seen as a conduit for creating this communication strategy, operational supplier management should focus on the day to day service reviews, metrics ad measurements. With Vendor Management focusing on the high level strategic direct of the relationships. 6. Governance – This is fundamentally embroiled into engagement, and is specific to vendors, industries, and organisations. How do you build an engagement model that means we all know what each other is doing, we can have confidence that it’s the right thing, we have just enough control over the relationship to feel in control, but enough poetic licence to ensure we allow new ideas to filter through. I’m a Vendor Management professional based in the UK. Primarily focused at this time on the management of Telecoms Outsourcing Agreements. Originally the role of a vendor manager was seen as a means to identify and subsequently enforce contractual obligations, but in my case this has developed into and industry expert. Involved in everything from transactional business as usual management and tracking, all the way to overarching cross function and cross tower strategies and operating models.
This is the key element to the role I have “subject matter Expert”. Telecoms was and is still seen as something of a black art with Telecoms vendors seen as predatory and opportunitistic. Creating relationships based on mistrust. Poor focus on delivery and commercial management from the vendors adds to this impression that the customer is being ripped off.
In fact what I found was that the behaviours on both sides of the agreement meant it was doomed to fail from the outset. A poorly defined beginning will result in a poor agreement and subsequently a poor deliver and experience for the customer. Lots of focus on cutting the right deal and nothing on how we actually make those requirements materialise in real life. Or measurement of success against original expectations.
What also came to light over time was that procurement, although very adept at cost negotiation, are not necessarily as competent at any form of relationship or performance management. Their targets are in direct opposition to operational and delivery focused staff for creating win win situations from long term strategic relationships.
Once that cost target has been achieved its time to move onto the next challenge, leaving someone else to deal with the contract that’s left behind. This also means they have less concern over the fit for purpose nature of the contract that’s negotiated, this is the most critical and some would say obvious reason why operational teams rarely end up with what they want or need.
Ultimately I am still trying to define what a company expects from Vendor Management. It differs from company to company depending on what they deem of importance and how the company is structured. It’s seen to cover a multitude of sins, from strategic sourcing, contract negotiations, supplier performance management, ect…….
Some key themes are evolving.
1. Innovation – create, proliferate and market innovations, to be able to spot what is innovative and how that could bring additional value to our organisation. Key problem is the ability to take a product from your vendor base, productise and commercialise this out to your customers with the minimum amount of effort and cost, while maximising margin and revenue.
2. Intangible relationship management – Creating genuine relationships built on trust and respect, intangible benefits that cannot be measured as such but their “value” is worth its weight in gold. The good cop to procurements bad cop.
3. Marking Procurement – Procurement goals tend to be one dimensional, focusing primarily on the cost avoidance and cost reductions achieved. Even when these are at the risk of operational efficiency or long term growth. You cannot apply the same procurement strategies to paper clips as you can to global outsourced agreements.
4. Business Acumen – To be less focused on the obvious benefits, bring subject matter expertise into a proposal. Scoring matrixes on RFP’s are all well and good but they cannot replace entrepreneurialism, gut feelings and experience.
5. Engagement – Communication is critical to the success of any relationship. Vendor management is seen as a conduit for creating this communication strategy, operational supplier management should focus on the day to day service reviews, metrics ad measurements. With Vendor Management focusing on the high level strategic direct of the relationships.
6. Governance – This is fundamentally embroiled into engagement, and is specific to vendors, industries, and organisations. How do you build an engagement model that means we all know what each other is doing, we can have confidence that it’s the right thing, we have just enough control over the relationship to feel in control, but enough poetic licence to ensure we allow new ideas to filter through.

]]> Comment on Outsourcing Governance and “Who Owns Supplier Performance Management?” by Philippe BERTRAND http://360vendormanagement.com/2009/12/16/outsourcing-governance-and-who-owns-supplier-performance-management/comment-page-1/#comment-1211 Philippe BERTRAND Wed, 16 Mar 2011 10:24:08 +0000 http://360vendormanagement.com/?p=376#comment-1211 Measurable KPI's: the objective for every Procurement specialist. Nevertheless there are areas where it is very difficult to implement. Looking particularly into Marketing Services we do often face difficulties to set-up measurable KPI's in SLA's for Design Agencies, PR & PA agencies. This situation can constructively be managed when it's concerning goods but when we are talking about Marketing Services things are getting more difficult and are often depending of subjective aspects and perception. Measurable KPI’s: the objective for every Procurement specialist.
Nevertheless there are areas where it is very difficult to implement.
Looking particularly into Marketing Services we do often face difficulties to set-up measurable KPI’s in SLA’s for Design Agencies, PR & PA agencies.
This situation can constructively be managed when it’s concerning goods but when we are talking about Marketing Services things are getting more difficult and are often depending of subjective aspects and perception.

]]> Comment on Definition of Vendor Management by Gopal Purdhani http://360vendormanagement.com/2007/11/28/definition-of-vendor-management/comment-page-1/#comment-1207 Gopal Purdhani Sun, 23 Jan 2011 04:27:19 +0000 http://360vendormanagement.com/2007/11/28/definition-of-vendor-management/#comment-1207 Tony is right when limiting the thought process to free marketing. In global context where most countries are under-developed and developing, we must consider business being carried out in those and with those countries that is actually three fourth of total commercial transactions. In fact the management refers to the managing of the transactions in totality. Out sourcing is done with the main purpose of concentrating on the real and main objective. We must resort to out sourcing all supporting activities. Main objectives are to be accorded main efforts and involve top management. Gopal Purdhani Tony is right when limiting the thought process to free marketing.
In global context where most countries are under-developed and developing, we must consider business being carried out in those and with those countries that is actually three fourth of total commercial transactions. In fact the management refers to the managing of the transactions in totality.
Out sourcing is done with the main purpose of concentrating on the real and main objective. We must resort to out sourcing all supporting activities.
Main objectives are to be accorded main efforts and involve top management.

Gopal Purdhani

]]> Comment on Pro-Globalism View of Outsourcing and Outsourcing Critics by rca http://360vendormanagement.com/2008/03/28/pro-globalism-view-of-outsourcing-and-outsourcing-critics/comment-page-1/#comment-1198 rca Wed, 19 Jan 2011 10:44:22 +0000 http://360vendormanagement.com/2008/03/28/pro-globalism-view-of-outsourcing-and-outsourcing-critics/#comment-1198 I think the Pro-globalism promoters must view all the pros and cons of outsourcing. The most interesting thing is that globalization make the prices to be lower. If an Indian company have a product at a half of American price, this could be a problems for the Americans, as well. I think the Pro-globalism promoters must view all the pros and cons of outsourcing. The most interesting thing is that globalization make the prices to be lower.

If an Indian company have a product at a half of American price, this could be a problems for the Americans, as well.

]]> Comment on Offshore Outsourcing Vendors, Customers, and Advisors: They Should Know Better by Joe http://360vendormanagement.com/2009/11/16/offshore-outsourcing-vendors-customers-and-advisors-they-should-know-better/comment-page-1/#comment-1177 Joe Mon, 15 Nov 2010 22:56:43 +0000 http://360vendormanagement.com/?p=251#comment-1177 The issue isn't so much one around outsourcing as it is the specific outsourcing model. The traditional method of riffing a bunch of employees and then bringing in lower cost less qualified employees is simply flawed - period. A better approach would be to keep the employees and move them to the outsourcer and the outsourcer through efficiencies gained by using cloud computing models, agile development, and other shared resources is able to consume ony 80% or even less of those employees time and to leverage them onto other projects. Benefits (1) the client doesn't lose the unique and inherent knowledge of the IT staff, (2) the client gets a level of service equal to or better than they currently receive, (3) the IT staff get to keep their jobs, and (4) the IT staff get the opportunitiy to expand their skill set by working on other projects which increases job satisifaction and employee retention and opportunities. This is a much more effective model and allows companies to keep jobs in the USA - which we all need right now and which frankly the State of Texas should have done. I'm not surprised that IBM and many of the other major outsourcers are not leveragin this model - they don't really understand the real definition of cloud computing - they think it is nothing more than hosting existing stale software. Companies like Salesforce and only a few limited others have figured out how to deliver a true cloud platform model. The best combination is a true cloud platform + an outsourcer that knows how to retain and more efficiently leverage IT staff across multiple projects. The issue isn’t so much one around outsourcing as it is the specific outsourcing model. The traditional method of riffing a bunch of employees and then bringing in lower cost less qualified employees is simply flawed – period. A better approach would be to keep the employees and move them to the outsourcer and the outsourcer through efficiencies gained by using cloud computing models, agile development, and other shared resources is able to consume ony 80% or even less of those employees time and to leverage them onto other projects. Benefits (1) the client doesn’t lose the unique and inherent knowledge of the IT staff, (2) the client gets a level of service equal to or better than they currently receive, (3) the IT staff get to keep their jobs, and (4) the IT staff get the opportunitiy to expand their skill set by working on other projects which increases job satisifaction and employee retention and opportunities.

This is a much more effective model and allows companies to keep jobs in the USA – which we all need right now and which frankly the State of Texas should have done. I’m not surprised that IBM and many of the other major outsourcers are not leveragin this model – they don’t really understand the real definition of cloud computing – they think it is nothing more than hosting existing stale software. Companies like Salesforce and only a few limited others have figured out how to deliver a true cloud platform model. The best combination is a true cloud platform + an outsourcer that knows how to retain and more efficiently leverage IT staff across multiple projects.

]]> Comment on Outsourcing Contract Incentives: What is a Pound of Carrots Worth? by Incentives « NET(net), Inc. http://360vendormanagement.com/2008/04/01/outsourcing-contract-incentives-what-is-a-pound-of-carrots-worth/comment-page-1/#comment-1174 Incentives « NET(net), Inc. Thu, 13 May 2010 16:01:31 +0000 http://360vendormanagement.com/2008/04/01/outsourcing-contract-incentives-what-is-a-pound-of-carrots-worth/#comment-1174 [...] is known as an incentive payment.  Over at 360° Vendor Management, Tony started the conversation by talking about how to use incentives.  Except for some specific things like requirements [...] [...] is known as an incentive payment.  Over at 360° Vendor Management, Tony started the conversation by talking about how to use incentives.  Except for some specific things like requirements [...]

]]> Comment on IT Outsourcing Metrics: A Good Example of Management Controls by IT Services http://360vendormanagement.com/2009/11/30/it-outsourcing-metrics-a-good-example-of-management-controls/comment-page-1/#comment-1171 IT Services Tue, 30 Mar 2010 10:06:40 +0000 http://360vendormanagement.com/?p=325#comment-1171 That's interesting that BPO vendor managers can use the same approach, as different transaction types require different service levels, but, by breaking the into clear categories, vendor performance of each transaction type can be evaluated. Nice blog. That’s interesting that BPO vendor managers can use the same approach, as different transaction types require different service levels, but, by breaking the into clear categories, vendor performance of each transaction type can be evaluated. Nice blog.

]]> Comment on Outsourcing Vendor Management Organizations by Vendor Management Organisation (VMO) | Offshoring as a Service http://360vendormanagement.com/2007/03/26/outsourcing-vendor-management-organizations/comment-page-1/#comment-1168 Vendor Management Organisation (VMO) | Offshoring as a Service Fri, 26 Mar 2010 15:31:11 +0000 http://360vendormanagement.com/2007/03/26/outsourcing-vendor-management-organizations/#comment-1168 [...] should this organisation belong? In-Line VMO? VMO Governance Teams? Centralized Corporate VMO? Read Outsourcing Vendor Management Organizations for more input. It is a complex organisation because it has to be placed correctly, a governance [...] [...] should this organisation belong? In-Line VMO? VMO Governance Teams? Centralized Corporate VMO? Read Outsourcing Vendor Management Organizations for more input. It is a complex organisation because it has to be placed correctly, a governance [...]

]]> Comment on Vendors or Partners? by Dipali Patankar http://360vendormanagement.com/2008/03/13/vendors-or-partners/comment-page-1/#comment-1167 Dipali Patankar Thu, 25 Mar 2010 09:34:23 +0000 http://360vendormanagement.com/2008/03/13/vendors-or-partners/#comment-1167 At a ground level, the teams should work as partners. However you do need a formal customer:vendor relationship at a higher level. This seperation of entities requires dedication and commitment from both parties and at a senior level in both companies. At a ground level, the teams should work as partners. However you do need a formal customer:vendor relationship at a higher level. This seperation of entities requires dedication and commitment from both parties and at a senior level in both companies.

]]> Comment on A Cozy Stable for Outsourcing Vendor Management Professionals by Brad Rubin http://360vendormanagement.com/2010/03/02/a-cozy-stable-for-outsourcing-vendor-management-professionals/comment-page-1/#comment-1165 Brad Rubin Wed, 03 Mar 2010 19:05:37 +0000 http://360vendormanagement.com/?p=381#comment-1165 Very nice gentleman. Congratulations! Very nice gentleman. Congratulations!

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