As companies continue to increase their strategic reliance on vendors, outsourced services, and collaborative alliances, business leaders need to rethink their vendor management office (VMO). Though traditionally perceived as tactical execution support groups for managing vendor relationships, VMOs can play a key role in driving the innovation agenda and collaboration within the service provider ecosystem. Best-in-class VMOs are tightly aligned with a company’s strategic and tactical business objectives, so they can push transformation outcomes, ensure a seamless cross-service provider collaboration, and solidify a true foundation for innovation. Deriving great value from vendor relationships, VMOs also serve a vital role in executing business objectives as they push organizations towards achieving targeted business outcomes over the long term.

With the growing role of vendors in the delivery of IT and business services, vendor management should be considered a core competency of every organization. A vendor management office is not just a contracts management function—it’s designed to extract innovation and value, govern suppliers, and leverage a strategic relationship to bring new and advanced capabilities to the enterprise.

Our Wavestone experts guide our clients through the development of a true vendor management office that will align vendor success to business value, drive speed and efficiency with external partners, produce innovation to enable new business models, and provide cost savings to fuel transformation.

Wavestone VMO Capability Development Process

Wavestone VMO Capability Development Process

Situation Assessment

Understand executive direction and requirements, and build the initial business case.

Direction and Foundation

Develop organizational charter, policies, roles, responsibilities, artifacts, dashboards, and guiding principles.

Service Definition

Develop the scope of services, organizational structure, operating processes, and metrics.

Implementation Roadmap

Develop and execute the implementation plan.

Vendor Strategy and Plan

Perform spend analysis and develop the vendor strategy. Identify opportunities for supplier cost optimization by consolidating existing agreements with overlapping technical capabilities.

At Wavestone, we know that achieving a successful VMO implementation requires a comprehensive approach and methodology that can seamlessly weave the multiple processes, responsibilities, policies, tools, and technologies together in every vendor management organization relationship. From start to finish, we offer a detailed, step-by-step process that includes strategy assessment and design, implementation and optimization, and ongoing management and support as we help our clients develop a self-funding vendor management organization. 

Strategy Brief

The Best-in-class Vendor Management Office Playbook

Why every organization needs a VMO and what it takes to be best-in-class.

Featured Expert

  • Featured Expert - Bill Fowler

    Bill Fowler

    Managing Principal

    • Bill Fowler has designed and led large complex consulting engagements for Fortune 500 clients and has worked on some of the world’s largest outsourcing agreements.
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