Vendor Sourcing and Management: The First 100 Days Post-Signature — Build a Governance Plan

Vendor Sourcing and Management: The First 100 Days Post-Signature — Build a Governance Plan

This IDC study lays out actions that buyers should take in the first 100 days of a contract to capture the value embedded in contracts by defining a governance plan. Contracts are complex and require participation of cross-functional internal teams such as information technology (IT), global procurement, finance, legal, project management, audit, and risk and compliance. The lack of a governance plan and associated tools and technology results in unwarranted change orders, invoicing errors, delivery delays, and decline in customer satisfaction. IDC research shows that this results in 10–15% increase in cost and expenses post-signature and eventually increases business operating expenses. This study presents a list of activities that sourcing executives and vendor governance and supplier management (VGSM) teams should incorporate in the governance plan. It is designed for IT initiative owners, vendor and sourcing management (VSM) staff, and senior managers of other disciplines who are involved in managing IT and business processes.This study focuses on outsourcing services, vendor sourcing and management, and worksource transformation."As enterprises face increasing pressure on expense reduction, ITO and BPO management teams will be forced to adopt effective governance models," says Rajeev Agarwal, adjunct analyst with IDC's Research Network. "Organizations that don't invest in vendor governance and supplier management will find that they are not realizing 100% value from the contractual relationship."

IDC Opinion
In This Study
Situation Overview
Vendor and Sourcing Life Cycle
Post-Signature Governance Plan
Build Transition Plan
Build Contract Abstract or Summary
Identify Noncontract Requirements
Identify Obligations and Deliverables
Define/Manage Requirements to Go from Transition to Steady State
Document Ongoing Performance Management — Measures and Metrics
Understand Pricing, Invoicing, and Approval Processes
Identify Regulatory, Policy Compliance, and Risk Management Requirements and Remediation
Understand Project Completion and Contract Closure Process
Future Outlook
Essential Guidance
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