How to Build a VMO: Lessons Learned and Keys to Success

Executives today manage increasingly complex contracts and service delivery structures, and must meet increasingly high expectations regarding business value, continuous improvement and compliance to a changing regulatory landscape.

In this environment, the Vendor Management Office (VMO) has emerged as a critical governance and oversight tool. Designed to facilitate collaboration within the sourcing model as well as alignment between the sourcing model and the business, the VMO is uniquely positioned to act as a bridge that connects myriad stakeholders and aligns operations with business strategy. In many cases, however, VMOs fail to fulfill their potential, reverting to a cost-focused role of managing contract minutiae rather than ensuring value realization.

This ISG white paper – co-authored by a senior VMO executive with a leading North American insurance firm – examines opportunities and challenges related to the VMO, and outlines the key success factors and lessons learned related to deploying and managing vendor management initiatives.