|
Vendor Management Systems
Common sense strategies like these are a good start, but they only go so far. To really analyze vendors' bids and performance, CIOs are beginning to rely on vendor management systems, a series of software programs that take IT governance into account to help companies write requests for proposals (RFPs) as well as score bids and track vendor performance against various metrics.
The tools are out there. They include Chimes CVM Centralized Vendor Management by Ensemble Chimes Global, Click Commerce's Contract Management and Service Management Solution and ITM Software's ITM vendor relationship management application. Contingent staffing software includes ProcureStaff, IQNavigator, Beeline, Fieldglass, Taleo, Peopleclick and PeopleNet.
But most people don't use this type of application yet. In a Forrester study of 292 enterprises with centralized vendor management offices, one-quarter to one-third say they use software for contract management, service-level agreements (SLAs) or service delivery management.
Marguerite Raaen is a consultant who has served as CIO and in other executive IT positions in numerous companies, including the U.S. Department of Education and British telecom company Cable & Wireless. She has hired consultants to teach her staff about vendor management tools, including enterprise data management (EDM) software that tracks the progress and quality of a vendor's work; lifecycle management software that tracks the lifecycle of IT assets; and eCPIC, the federal government's system for getting the most out of IT investments (the acronym stands for Electronic Capital Planning and Investment Control).
Some larger midsized firms are pushing the vendor management process out to the vendors themselves. Brady says Forrester heard from several companies that "are now expecting their vendors to measure their own performance and bring it to them." One company told Forrester it had developed a PowerPoint template that it gives to every strategic vendor -- ranging from the SAPs of the world to server providers like Sun Microsystems -- to fill in the blanks and present the results quarterly. The questions track how vendors meet deadlines, budgets and other SLAs.
Bring in the Business Folks
Since vendor management tools work only as well as the people using them, companies have paid special attention to the people they hire to be contract watchdogs, giving preference to those with business backgrounds like an MBA or business analyst experience. People who track contracts should also be certified, as should the vendors themselves, Raaen says.
Raaen has made a habit of hiring consultants to teach her staff how to write RFPs and airtight contracts with appropriate SLAs. The training also covers how to review bids and use the whole alphabet soup of industry standards, including the Capability Maturity Model Integration, a method of process improvement that was developed by the Software Engineering Institute at Carnegie Mellon University.
To pay for this training at smaller organizations, she has had experts give talks about the standards during ice cream socials or pizza parties. She likes to invest in training because the consequences of failure are high. "If you have a number of applications that go belly up, the sales guys go insane, the finance guys go insane, the procurement people go insane, and then you're let go," she says. "So what you start to do when you're given a budget is you start carving out a certain percentage of that to manage risk." For Raaen, that percentage is seven or eight.
In addition to benefiting from the training itself, "I want to have the ability to prove that I minimized risk so that if anything went wrong, I can show that I hired vendors to write performance-based contracts for my RFPs and that I hired vendors to teach us how to do EDM," she says.
|
