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Vendor Sourcing and Management — Enhancing Outsourcing Governance with the Vendor Sourcing and Management Office

Vendor Sourcing and Management — Enhancing Outsourcing Governance with the Vendor Sourcing and Management OfficeThis IDC study highlights exemplary outsourcing practices that can be replicated by complex organizations with significant outsourcing arrangements. Many organizations find it difficult to effectively govern one or more complex outsourcing deals, to deliver value and reduce risks. CIOs and chief procurement officers will find this study useful as it provides a model and suggestions for an enterprisewide capability to improve the governance and management of outsourcing. This study profiles four large anonymous organizations, each providing examples of how the VSMO provides a consistent organizationwide role for coordination of the outsourcing portfolio. This coordination reduces outsourcing risk and improves the value of the outsourcing relationship. This study underscores the importance of a coordinated enterprisewide VSMO to oversee governance of the outsourcing portfolio. The VSMO will reduce risk, as required by regulators (e.g., bank and insurance firm), or will confirm value for money (e.g., government) or will help achieve global product line growth and profitability (e.g., consumer products company).This study focuses on outsourcing services, vendor and sourcing management, and worksource transformation."The complexities of managing multiple vendors across many lines of business can lead to poor performance or outright outsourcing failure," says Ron Babin, adjunct advisor with IDC's IT Executive Program (IEP)."Those organizations that implement a governance office to oversee and coordinate enterprise outsourcing projects will gain the benefits of more reliable delivery of services and fewer failed or disappointing outsourcing projects."

IDC Opinion
In This Study
Situation Overview
A North American Bank
A U.S. Health Insurer
A Large Provincial Government
A Global Consumer Products Company
VSMO Focus Summary
The VSMO Provides a Consistent Outsourcing Life Cycle
The VSMO Reduces Outsourcing Risks
The VSMO Monitors Risks and Anticipates Outsourcing Problems
Future Outlook
Essential Guidance
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