The ability to effectively manage complex, multi-vendor sourcing arrangements is becoming increasingly important in today’s business enterprises. In many cases, however, vendor management capabilities aren’t adequate to the challenge. As a result, business value erodes, service quality suffers and enterprises are exposed to operational and financial risk.
As a discipline, Vendor Management and Governance (VMG) is gaining boardroom attention for a number of reasons. At a high level, achieving more value from outsourcing is becoming a top priority. A sourcing strategy based on cost reduction alone is no longer sufficient, and executives are recognizing that an effective VMG function can enable the operational transparency and process consistency needed to drive business benefits such as enhanced data analytics and customer insight.
More specifically, the continued growth of complex multi-vendor outsourcing agreements is underscoring the need for effective VMG. As delivery models constantly evolve, and as providers become more numerous and more specialized, the ability to oversee constant change and track multiple moving parts is essential.
More of the CIO Insight post from guest author David England