Due to a number of high-profile outsourcing failures, companies are now taking a deeper look at the whole outsourcing processes. In their investigation, they have realized that it is in their best interest to have better management over vendors. This management starts at the beginning of the relationship and not just at the end. Having witnessed these blunders, has opened the eyes of many a business about the necessary move of the market world to a more decentralization of technology and realization of expected value to new technology.
The VMO manages and facilitates contracts across three crucial departments on a regular basis. Each of them has different sets of skills, methods, and processes. The job is only made more complicated by the fact that the VMO has to work multiple departments and supplier relationships both in the operational and strategic levels. Whether you choose to have a very structured approach to your staffing of this positing or more laid back is of very little difference.
Helping IT sourcing be more effective is an imperative for businesses today. For this to be achived stronger realtionships with vendors have to be established. A VMO can accomplish getting better rate negotiations and demand consolidation through stronger vendor relationships.
There are not hard set rules for a VMO, but an effective VMO is able to abide by 8 guiding principals:
1. Manage VMO as a business with in a business
2. Leverage consolidated purchasing power
3. Continuously manage contractual relationships with suppliers
4. Treat suppliers as an extension of internal resources
5. Use the minimum numbers of suppliers possible
6. Select the highest valued supplier; not the lowest purchasing price
7. Negotiate win/win deals with all suppliers that balance risk, speed, and performance
8. Actively monitor, manage, and improve supplier performance
A VMO can bring tools to the business that will abundantly improve the time cycle and reduce costs. No matter how formally the position is executed, these 8 guidlines help reduce cost risk and improve vendor relationship.
The VMO manages and facilitates contracts across three crucial departments on a regular basis. Each of them has different sets of skills, methods, and processes. The job is only made more complicated by the fact that the VMO has to work multiple departments and supplier relationships both in the operational and strategic levels. Whether you choose to have a very structured approach to your staffing of this positing or more laid back is of very little difference.
Helping IT sourcing be more effective is an imperative for businesses today. For this to be achived stronger realtionships with vendors have to be established. A VMO can accomplish getting better rate negotiations and demand consolidation through stronger vendor relationships.
There are not hard set rules for a VMO, but an effective VMO is able to abide by 8 guiding principals:
1. Manage VMO as a business with in a business
2. Leverage consolidated purchasing power
3. Continuously manage contractual relationships with suppliers
4. Treat suppliers as an extension of internal resources
5. Use the minimum numbers of suppliers possible
6. Select the highest valued supplier; not the lowest purchasing price
7. Negotiate win/win deals with all suppliers that balance risk, speed, and performance
8. Actively monitor, manage, and improve supplier performance
A VMO can bring tools to the business that will abundantly improve the time cycle and reduce costs. No matter how formally the position is executed, these 8 guidlines help reduce cost risk and improve vendor relationship.
About the Author:
Joseph B. Kappernick works with companies to help them reduce their logistics and shipping costs. Please visit NPI to learn more about transportation vendor cost reduction
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