Many organizations with VMOs have been able to generate impressive cost savings by standardizing their IT procurement efforts. There is an increased focus on managing relationships and have a strategic alignment with identified services and solutions partners by performing vendor stratification.

While setting up VMO a clear alignment with IT mission and business plans is essential. Some of key factors when setting up VMO are:

• Establish scope of VMO - Is VMO measuring success of an large outsourcing engagement, or you are monitoring multiple vendors
• Define the processes and entities that will be involved with VMO
• Get buy in from the business
• Clearly demarcate roles and responsibilities and set up governance structure
• Define the metrics to measure success of VMO
• Develop tools and templates
• Training and implementation
• Dashboard for status update
• Continual refinement of metrics

Usually it takes any where between 2-4 months to establish a VMO from scratch.