| Vendor Management Office or VMO is a framework | | | | Vendor performance - Manual or partially automated |
| for managing and governing your outsourcing vendors | | | | processes do not fully monitor the vendor |
| that ensures your desired business outcomes are | | | | performance and lack an ongoing vendor review. |
| achieved through your outsourcing efforts. However | | | | They demand considerable time of project personnel |
| certain factors when not taken care of can hinder | | | | in feeding data and extracting and interpreting results. |
| your efforts in setting up an agile and flexible vendor | | | | Proof of Concept - More often than not clients seek |
| governance framework. Let's look at the most | | | | value, but fail to ask for a proof firsthand, a demo of |
| prominent ones: | | | | the system/ infrastructure/ application at the client |
| SLA Maze - Often SLAs are too many, generic, and | | | | premises with the help of client "people and data" is |
| are not properly spelt out that makes it difficult for both | | | | not always run by the vendor beforehand. |
| client and the vendor to understand and execute them. | | | | Vendor Selection and Negotiation - Negotiate with the |
| Communication Barrier - Most of the times we only | | | | top two. After evaluating multiple vendors, carry out |
| see top-down communication that involves senior | | | | contract negotiations with the final two, and not just |
| management and executives. Bottom-up | | | | the final one. This increases competition and chances |
| communication that generally involves technical team | | | | of getting a vendor with the top choice. |
| responsible for execution and delivery is either missing | | | | Keeping Compliance out of Contract - Client often |
| or given a secondary treatment. Thus organizations fail | | | | overlook whether the offered product by his vendor is |
| to have a two sided view of their contracts. | | | | compliant to all legislations and regulations. Once the |
| What about Qualitative Outcomes? - KRAs/ KPIs | | | | product is implemented at the client end, any |
| (Key Result Areas/ Key Performance Indicators) are | | | | compliance risk and cost of non compliance may have |
| employed to assess vendor performance, these | | | | to be borne by the client and can affect the product |
| metrics measure and track quantitative outcomes of | | | | performance. |
| the outsourcing contract but leave the qualitative facet | | | | Infrequent Vendor Evaluations - Most organizations |
| of the contract that are important to your organization. | | | | carry out vendor evaluations at randomly defined |
| Qualitative outcomes such as customer/ employee | | | | periods. The period may be monthly, quarterly, annually |
| satisfaction, stakeholder expectation, client-vendor | | | | or at the start, somewhere middle, and the end of |
| expectation mismatch, long term relationship with the | | | | contract. More frequent evaluations may result in |
| vendor are indispensable for the maximum contract | | | | weekly or monthly evaluations. Lack of well thought |
| value realization. | | | | out ongoing evaluations leads to overlooking |
| Endless Meetings - Does carrying on innumerable, | | | | performance inefficiencies and required improvement |
| lengthy meetings yield the expected results? Not | | | | areas. |
| always. Most often the result of these meetings is | | | | Don't buy Solution, buy Features - A solution is a |
| ever piling cumbersome status reports that further | | | | broad-based term. Often 70% of the solution is |
| complicate the overall project and load the project | | | | generalized and 50% is customized to the client needs. |
| personnel. | | | | However this may lead to a client paying for the |
| Lack of a single consistent tool for measuring the | | | | features which are not of use to him. |