Measuring your Vendor Management Office Performance

All Vendor Management Offices (VMO) are not created equal. Roles, responsibilities, and overall scope varies from company to company. Sometimes it's simply a phrase to describe a process implemented and other times a Vendor Management Office may just mean a centralized team doing all the buying. A Vendor Management Office that is not mature may not participate in the total life cycle of the buying process. And then there is the mature Vendor Management Office where they are involved from RFP creation to vendor search, conducting benchmarking studies, handling vendor negotiation, managing post-contract vendor relationships, and ongoingly overseeing the contracts to ensure compliance.

A mature Vendor Management Office drives best practices by ensuring the creation and regular usage of templates all the way through the process from creating RFP's and contract negotiations to even communication management and measuring vendor performance through pre-defined performance metrics.

But how to measure vendor management office performance? Here are three top areas where you can focus to evaluate your VMO performance:

Consitency and Transparency: Is the Vendor Management Office providing guidance, consistency and transparency throughout the sourcing process? Are there mature templates that have been created and regularly used for every single sourcing opportunity? Is vendor risk assessment, benchmarking data, and creating guidelines for pre and post sourcing being handled as a routine practice?

Structured Approach: Is the Vendor Management Office providing a structured approach to negotiations? Is there a formal negotiation methodology in place rather than simply relying on the art of negotiation? Are all stakeholders including legal, finance, and operations involved in the negotiations and final contract creation?

Effective Contracts? Is the Vendor Management Office helping the company create more effective contracts? Are they flexible? Do they include measures for managing compliance issues and resolving conflicts with vendors? Are they nimble and easily modifiable?

You should regularly evaluate the performance of your Vendor Management Office. The Vendor Management Office should own the negotiation and contract management process. This will allow internal business customers to conduct day to day operational management with vendors without drowning in contractual issues.

Vendor Management Office performance should also be evaluated on how well they improve vendor relationships and how well they've converted vendors from simply selling goods and services to becoming partners in creating innovation and better products and services.

Contact us today to learn how we can help you effectively create, enhance, or manage your vendor management office needs.

Currently rated 4.0 by 1 people

Currently 4/5 Stars.
1
2
3
4
5

Categories: Vendor Management | Vendors

Posted by merveille.n on Friday, September 03, 2010 5:24 PM

Permalink

Vendor Management Office Performance MeasurementIt's time for a VMO (Vendor Management Office)!Oracle Vendor Management Applications a Must for Vendor Management Teams?

Comments

Comments are closed

Gurus Speak

We provide insights on best practices, news and events related to outsourcing

About Sourcing Gurus

Categories

Archive

Recent posts

Authors

Disclaimer

Measuring your Vendor Management Office Performance

Related posts

Comments