By the time you start using this blueprint, you should have established a solid foundation for your vendor management initiative (VMI) and implemented many or all of the principles outlined in Info-Tech’s blueprint Jump Start Your Vendor Management (the Jump Start blueprint). This blueprint (the Elevate blueprint) is meant to continue the evolutionary or maturation process of your VMI. Many of the items presented here will build on and refer to the elements from the Jump Start blueprint. The goal of the Elevate blueprint is to assist in the migration of your VMI from transactional to strategic. Why? Simply put, the more strategic the VMI, the more value it adds and the more impact it has on the organization as a whole.

While the day-to-day, transactional aspect of running a VMI will never go away, getting stuck in transactional mode is a horrible place for the VMI and its team members:

• The VMI will never live up to its potential.
• The work won’t be enjoyable or rewarding for most people.
• The VMI will be seen paper pushers, gatekeepers, and other things that don’t add value or should be avoided.
• Being reactive (i.e. putting out fires all day) is exhausting and provides little or no control over the work and workflow.
• Lastly, the VMI’s return on investment will be low, and unless it was established due to regulatory, audit, or other influences, the VMI could be disbanded. Minimal resources will be available to the VMI…just enough to keep it alive and obtain whatever checkmark needs to be earned to satisfy the original need for its creation.

To prevent these tragic things from happening, transform the VMI into a strategic contributor and partner internally. This Elevate blueprint provides a roadmap and guidance to get your journey started. Focus on expanding your understanding of customer/vendor dynamics, improving the skills, competencies, and knowledge of the VMI’s team members, contributing value beyond the savings aspect, and building a solid brand internally and with your vendors. This requires a conscious effort and a proactive approach to vendor management…not to mention treating your internal “clients” with respect and providing great customer service.

At the end of the day, ask yourself one question: If your internal clients had to pay for your services, would they? If you can answer yes, you are well on your way to being strategic. If not, you still have some work to do. Long live the strategic VMI!

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

Your Challenge

Common Obstacles

Info-Tech’s Approach

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.*

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.

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. Often, 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.

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 and the VMI evolve to add value and impact to the organization that was started with the Info-Tech blueprint Jump Start Your VMI.

38%

2021

16%

2021

47%

2021

Spend on

As-a-Service Providers

Spend on

Managed Services

Providers

IT Services

Merger & Acquisition

Growth

(Transactions)

1.1 Review and Update Existing Plan Materials

2.1 Vendor Classification Models

2.2 Customer Positioning Model

2.3 Two-Way Scorecards

2.4 Performance Improvement Plan (PIP)

2.5 Relationship Improvement Plan (RIP)

2.6 Vendor-at-a-Glance Reports

2.7 VMI Personnel Competency Evaluation Tool

2.8 Internal Feedback Tool

2.9 VMI ROI Calculation

2.10 Vendor Recognition Program

3.1 Classify Vendors & Identify Customer Position

3.2 Assess the Relationship Landscape

3.3 Leverage Two-Way Scorecards

3.4 Implement PIPs and RIPs

3.5 Gather Market Intelligence

3.6 Generate Vendor-at-a-Glance Reports

3.7 Evaluate VMI Personnel

3.8 Improve Professional Skills

3.9 Expand Professional Knowledge

3.10 Create Brand Awareness

3.11 Survey Internal Clients

3.12 Calculate VMI ROI

3.13 Implement Vendor Recognition Program

4.1 Investigate Potential Alliances

4.2 Continue Increasing the VMI’s Strategic Value

4.3 Review and Update

This phase helps the VMI stay focused and aligned by reviewing existing materials, updating the existing maturity assessment, and ensuring that the foundational elements of the VMI are up-to-date.

This phase helps you configure, create, and understand the tools and templates used to elevate the VMI.

This phase helps you begin integrating the new tools and templates into the VMI’s operations.

This phase helps the VMI stay aligned with the overall organization, stay current, and improve its strategic value as it evolves.

An organization’s vendor management initiative must continue to evolve and mature to reach its full strategic value. In the early stages, the vendor management initiative may be seen as transactional, focusing on the day-to-day functions associated with vendor management. The real value of a VMI comes from becoming strategic partner to other functional groups (departments) within your organization.

Developing vendor management personnel is critical to the vendor management initiative’s evolution and maturation. For the VMI to mature, its personnel must mature as well. Their professional skills, competencies, and knowledge must increase over time. Failure to accentuate personal growth within the team limits what the team can achieve and how the team is perceived.

Vendor management is not about imposing your will on vendors; it is about understanding the multifaceted dynamics between your organization and your vendors and charting the appropriate path forward. Resource allocation and relationship expectations flow from these dynamics. Each critical vendor requires an individual plan to build the best possible relationship and to leverage that relationship. What works with one vendor may not work or even be possible with another vendor – even if both vendors are critical to your success.

• Improve VMI performance and value.
• Improve VMI team member performance.
• Build better relationships with critical vendors.
• Measure the impact and contributions provided by the VMI.
• Establish realistic and appropriate expectations for vendor interactions.
• Understand customer positioning to allocate vendor management resources more effectively and more efficiently.

• Improve vendor accountability.
• Increase collaboration between departments.
• Improve working relationships with your vendors.
• Create a feedback loop to address vendor/customer issues before they get out of hand or are more costly to resolve.
• Increase access to meaningful data and information regarding important vendors.

Call #1: Review status of existing plan materials.

Call #2: Conduct a new maturity assessment.

Call #3: Review optional classification models.

Call #4: Determine customer positioning for top vendors.

Call #5: Configure vendor Scorecards and vendor feedback forms.

Call #6: Discuss PIPs, RIPs, and vendor-at-a-glance reports.

Call #7: VMI personnel competency evaluation tool.

Call #8: Create internal feedback tool and discuss ROI.

Call #9: Identify vendor recognition program attributes and assess the relationship landscape.

Call #10: Gather market intelligence and create brand awareness.

Call #11: Identify potential vendor alliances, review the components of a strategic VMI, and discuss the continuous improvement loop.

Plan/Build Run

Build/Run

Build/Run

Run/Review

1.1 Existing Plan document review and new maturity assessment.

1.2 Optional classification models.

1.3 Customer positioning model.

1.4 Two-way scorecards.

2.1 Performance improvement plans (PIPs).

2.2 Relationship improvement plans (RIPs).

2.3 Vendor-at-a-glance reports.

2.4 VMI personnel competency evaluation tool.

3.1 Internal feedback tool.

3.2 VMI ROI calculation.

3.3 Vendor recognition program.

3.4 Assess the relationship landscape.

3.5 Gather market intelligence.

3.6 Improve professional skills.

4.1 Expand professional knowledge.

4.2 Create brand awareness.

4.3 Investigate potential alliances.

4.4 Continue increasing the VMI’s strategic value.

4.5 Review and update (governances, policies and procedures, lessons learned, internal alignment, and leading practices).

1. Updated plan documents.
2. New maturity assessment.
3. Configured classification model.
4. Customer positioning for top 5 vendors.
5. Configured scorecard and feedback form.

1. Configured performance improvement plan.
2. Configured relationship assessment and relationship improvement plan.
3. Configured 60-second report and completed vendor calendar for one vendor.
4. Configured VMI personnel competency evaluation tool.

1. Configured internal feedback tool.
2. General framework for a vendor recognition program.
3. Completed relationship landscape assessment (representative sample).
4. List of market intelligence to gather for top 5 vendors.

1. Roadmap/plan for improving skills and knowledge for VMI personnel.
2. Action plan for creating brand awareness for the VMI.
3. Action plan for creating brand awareness for each VMI team member.

2.1 Vendor classification models

2.2 Customer positioning model

2.3 Two-way scorecards

2.4 Performance improvement plan (PIP)

2.5 Relationship improvement plan (RIP)

2.6 Vendor-at-a-glance reports

2.7 VMI personnel competency evaluation tool

2.8 Internal feedback tool

2.9 VMI ROI calculation

2.10 Vendor recognition program

3.1 Classify vendors and identify customer position

3.2 Assess the relationship landscape

3.3 Leverage two-way scorecards

3.4 Implement PIPs and RIPs

3.5 Gather market intelligence

3.6 Generate vendor-at-a-glance reports

3.7 Evaluate VMI personnel

3.8 Improve professional skills

3.9 Expand professional knowledge

3.10 Create brand awareness

3.11 Survey internal clients

3.12 Calculate VMI ROI

3.13 Implement vendor recognition program

4.1 Investigate potential alliances

4.2 Continue increasing the VMI’s strategic value

4.3 Review and update

• Documents and tools from Phase 1 of the Info-Tech blueprint Jump Start Your Vendor Management Initiative

• Updated documents and tools from Phase 1 of the Info-Tech blueprint Jump Start Your Vendor Management Initiative

• Documents and tools from Phase 1 of the Info-Tech blueprint Jump Start Your Vendor Management Initiative
• Whiteboard or flip charts (as needed)

• VMI team
• Applicable stakeholders and executives (as needed)

2.1 Vendor classification models

2.2 Customer positioning model

2.3 Two-way scorecards

2.4 Performance improvement plan (PIP)

2.5 Relationship improvement plan (RIP)

2.6 Vendor-at-a-glance reports

2.7 VMI personnel competency evaluation tool

2.8 Internal feedback tool

2.9 VMI ROI calculation

2.10 Vendor recognition program

3.1 Classify vendors and identify customer position

3.2 Assess the relationship landscape

3.3 Leverage two-way scorecards

3.4 Implement PIPs and RIPs

3.5 Gather market intelligence

3.6 Generate vendor-at-a-glance reports

3.7 Evaluate VMI personnel

3.8 Improve professional skills

3.9 Expand professional knowledge

3.10 Create brand awareness

3.11 Survey internal clients

3.12 Calculate VMI ROI

3.13 Implement vendor recognition program

4.1 Investigate potential alliances

4.2 Continue increasing the VMI’s strategic value

4.3 Review and update