Vendor Management Office (VMO) is a relatively new concept and many companies have already implemented a VMO. But we know that each company may have a different way of implementing a VMO as there is no real standard that is being followed, at least not yet.

Some companies simply put together a centralized team to manage suppliers whereas others have a very holistic approach to implementing all the processes and procedures needed to create a robust Vendor Management Office in which the entire scope from RFP creation to vendor performance management is clearly outlined.

VMOs help promote best practices and common process and here are some key roles they can perform:

1. VMO's as RFP Initiators and Managers: VMO's can be a great asset during the RFP creation process. Why? Because by providing common templates and a common process to review and understand the RFP responses, a VMO can drive consistency, transparency, and efficiency throughout the RFP lifecycle. Most organizations need the guidance that their purchasing organization can provide, we know because we've worked with many companies where the business customer really doesn't know how to manage the RFP process and is relying on the purchasing team to help them jumpstart and manage that process. A VMO can help the business constituents with their insight into conducting risk assessments, benchmark studies, and bringing other data to the table to help identify the best candidates for awarding the project to.
   
   
2. VMO's as Negotiation Experts: It's quite natural actually, when you think about it, VMO's must really be the ones who not only conduct the negotiation but also establish best practices, common processes, and performance measurement metrics for vendor negotiations. An effective VMO is instrumental in creating the processes necessary to have a repeatable vendor negotiation process. They also are best utilized for reviewing all contracts as they come up for renewal and managing any issues that may crop up during the contractual term.
   
   
3. VMO's as Vendor Relationship Managers: VMO's should ideally be empowered to create better vendor relationships. That's because they are the liaison between the vendors and the business constituents when it comes to managing expectations, implementing cost reduction strategies, and other. Gone are the days when purchasing folks can demand a price reduction; now it's more important to implement vendor recognition programs to help vendors work hand-in-hand with the VMO's and business constituents to innovate and improve the quality and price of each item purchased.

Vendor Management Offices can become THE hub where an organization can immediately see tangible savings, better and more common processes, and improved relationships with vendors and internal business constituents. If you've not implemented a VMO yet, what are you waiting for?