By establishing a central Vendor Management Office, a complex IT environment streamlines and improves service provider relationships.
Faced with the challenge of managing more than 3,500 IT vendors, a major global pharmaceutical and health products firm sought to create a Vendor Management Office (VMO) to oversee its key strategic vendor relationships. Primary objectives were to achieve negotiated cost savings from its vendor contracts, obtain business value from vendor innovations and improve operational performance.
Imagining IT Differently
Experts at ISG developed and delivered the VMO design and implementation roadmap within the accelerated timeframe of the client’s project plan. The solution created job descriptions and a competency assessment model to enable the rapid staffing of the 35-person VMO. ISG advisors also developed a vendor segmenting model and scoring mechanisms to categorize vendors into four tiers, with defined relationship management goals: invest, sustain, divest and niche. The new VMO organizational structure defined detailed operational processes to deliver relationship management, performance management, contract administration and financial management to an initial set of about 40 vendors.
Future Made Possible
To assist with organizational change management (OCM), ISG conducted a detailed stakeholder analysis, established metrics to measure VMO success, and developed a communications/change management plan and a risk and mitigation analysis to support the VMO implementation roadmap.