Why IT Vendor Management Makes Sense

Principal Jonathan Shaw offers commentary on the value of formalized IT vendor management, including a discussion on the challenges of ad-hoc vendor management and how to realize key benefits by establishing an IT Vendor Management Office that is responsible for overseeing the entire vendor lifecycle and for “bridging the gap” between IT and the corporate procurement organizations to better enable vendor relationships that drive strategic benefits. Sample excerpt: “As 60-70% of an enterprise’s IT budget is spent on hardware, software, and external vendor services, maximizing the value derived from IT vendors is key to delivering efficient IT services. Further, the increasing use of outsourcing, out-tasking and cloud computing means that vendors are now playing a fundamental role in IT’s delivery of services to the end-user. Given these two factors, effective vendor management has become an essential competency for every IT organization; arguably as important as any internal technology, service management, or program management capability.”