Vendor Management
May 2, 2006

Issues:
Manage Data Efficiency
Day to Day Relationship
Tools
Communication
Comparing Vendor Bids and Contracts
Multi Vendors
Leverage Vendors - What vendors do we want to be involved with and how to establish which vendor to use.

Data Management:
- Direct reports are accountable
- Have own purchasing department
- Very little outsourcing
- Have SLAs for deliverables
- Managers should collect data
- Break down services to evaluate
- Create business processes
- Share data with senior management

Tools:
- Remedy
- Geneva - Will customize for your company
- Template (to find info and capture data)
- Dashboard - Monitor everything; technology fed; keep track of what DBA does

Define format of SLA:
- What tools is vendor using
- What tools do we want used by vendor
- Best practices of vendor

Contract Comparisons:
- Start with template
- Have vendors respond to template
- Make comparison
- RFI to several vendors (Narrow down to 2 to 4)
- Final process goes to person who wants vendor
- Make sure vendor with lower price has included everything
- Check vendor with high cost - what does his cost cover
- Check why vendors think they are different with quote from other vendors
- Have master agreement for preferred vendors

Vendors:
- COMSYS - Vendor Management System
- Vendors need to be managed as vendors not as partner
- Have rules and go through process no matter who the vendor is
- Have validation team
Check out vendors
Do they have good standards - accreditation
How is vendor in marketplace
What do their customers look like
Have them tell you what companies turned them down and why

Internal vs. External:
- Know costs
- Build detailed business cases to understand costs
- CFO has to know why costs are what they are
- Look at exchange rate

How do you get good level of service and still be cost effective:
- Tell vendor that you want to do business with them, but you have to be cost effective
- Go to CEO (With Facts) and tell him why you want to change vendors
- Educate senior management
- If preferred vendor doesn’t have what you need, tell them

SLA - Metrics:
- Project measurements; process measurements; business measurements
- Tie money to SLA
- If they aren’t meeting levels, they don’t get paid. Keep credit or money in escrow. That way they have chance to improve and get paid from escrow. (Do this on a quarterly basis).
- The sooner you hit their pocket book - the better.
- You can have too many SLAs. If you have too many, there is distrust in the company.
- Have to understand measurements at front line. If people don’t understand the measurements, nothing will change. Make measurements simple.
- Managing perceptions and expectations will give vendors better measurements.
- Write in contracts - service level capability

Evaluating Vendors:
- Cost
- Sometimes personality comes in to play with new vendors
- Make sure vendor knows what you want
- Do you feel comfortable with vendor
- Vendors need to know their customers business

Once you have vendors in place:
- Use same SLAs
- Use same measurements
- Balance scorecards to rate them
- Have managers rate the vendors - what has vendor done for you and how can they improve
and then have vendor rate company. After both sides rate each other have meeting to go over differences.
- Senior managers and directors should do measurements
- If you are close enough and pay attention, you will know how vendors are doing.

Comments/Benefits:
Bid evaluation
Multi-vendor integration
Vendor-Customer
Vendor self-management/Learning what vendors do for other clients
Define & Research RFP/Help level the playing field and screen vendors
Tie dollars to SLA’s/Help drive performance
Sharing ideas/Understanding how industry is working – Keep up with industry standards
Networking
Contract comparison
SLA Metrics