Enterprise Vendor Management: Getting What Vendors Promise

“That’s not what I wanted”… “You said you were going to seamlessly support my apps”… “I thought you understood what the project was”… PROJECT STATUS: RED

Have you ever heard of the Latin term ‘Caveat Emptor’? It means let the buyer beware.  How many times have you heard about someone who purchased a product or service and it is not what they thought they were buying? In countless courtrooms, both large and small, consumers (whether individuals or corporations) are warned about understanding what they are agreeing to, knowing what they are buying and taking responsibility for any agreements they are entering into.  In a way – our computer age has made this easier than ever to do.  So if this is so easy why are there still many vendor disputes or – worse yet for IT organizations –failed projects?

Contract Execution and Compliance is a key part of EMC IT’s Enterprise Vendor Management approach that can have a huge impact on the ongoing success of the work we produce. It is one of four pillars or focus areas we use to address key components of our IT sourcing. The other three pillars, discussed in other blogs in this series, are Strategic Partnership; Partner Selection and Negotiation; and Analytics, Process and Communication.

Whereas effective long-term strategic focus, planning, selection, and negotiation are key components of the Strategic Partnership and Partner Selection and Negotiation pillars, Contract Execution and Compliance activities are all about ensuring that your supplier is delivering what they promised. This process seeks to ensure your agreement is meeting your needs and helps identify areas of IT and business delivery that can be improved.

So what is the value of having dedicated IT Supplier Management staff focus on these tasks that IT project management folks would traditionally just add to their list of responsibilities?

Within EMC IT, we strive to be at the forefront of running IT as a business.  Part of this is having an experienced IT Supplier Management organization focused on the business of IT, how deals are structured, and how well our suppliers are performing.  This does not mean we are testing apps, doing project plans or the like.  It is not even being part of our finance organization – we leave the bean counting to the finance guys. It does mean that we are involved in everything from how a deal is structured to ensuring that a Statement of Work (SOW) covers all of the detailed scope, deliverables and costs. We are also involved in and help manage any project- or supplier-specific “get well plans” if they are needed because a supplier hasn’t met our expectations.  This allows our IT teams to concentrate on what they need to – delivering IT projects on time and on budget with suppliers that support their causes.

Figure 1

As you can see below in Figure 1, Contract Execution and Compliance is much more than making sure a contract lists how much we will owe, is approved, is signed and then stored is a database (all part of ITIL standards).

Seven out of the 11 items in this pillar relate to supplier performance—from monitoring and measuring how well they are delivering to developing, supporting and managing plans to address performance issues.  One key way EMC IT does this is by having IT-specific Quarterly Business Reviews (QBR’s) for our major strategic partners.

As shown in Figure 2, these IT-specific and dedicated sessions cover a wide range of project details and improvement topics.  Although not operationally focused, we have found these QBR’s are particularly useful in holding our major strategic suppliers accountable for delivering on the many promises we hear when they are seeking new business.  These sessions are attended by the key IT stakeholders for major projects the supplier is working on, as well as IT Supplier Management, Procurement, and other interested parties.

Figure 2 — Typical Format of EMC IT Quarterly Business Review

Much of the Contract Execution and Compliance pillar is about the ongoing support and care that someone must own in an organization as projects move through their natural lifecycles.  As your organization adds many projects, and many suppliers to the mix, it can get overwhelming (and out of your control).  Having dedicated staff focused on these activities and supporting our IT teams is how we have proven that we can minimize the impact of these challenges.

For the first two parts of the IT Sourcing series, read:

Part 1 — Strategic IT Partnerships: Framing a Better Sourcing Strategy
Part 2 — Enterprise Vendor Management: Forging the Right IT Partnerships 

About the Author: Michael Dobbin