The IT ecosystem on the maturity ladder of Vendor Management.

  • Time:dinsdag, 30 mei 2017 09:00

In previous articles (in Dutch) I have explained what the preconditions are when implementing and managing an IT ecosystem. I believe that the ecosystem is a maturity step within the vendor management competence.

I have noticed that Vendor Management as a competence has evolved within IT, matured in value but implemented different within companies. I have tried to capture those differences and have plot them in a maturity model I made myself. This to give insights in the vendor management roadmap and the added value it can bring to the business.

Below the model with five maturity levels for the Vendor Management competence. You need to look at this model as a roadmap for generating more value from your vendors, for your business partners. I will briefly explain the different levels below. For more information please contact me using the details at the end of this article.

Vendor Management Maturity Model

This model guides you from a more operational approach towards a strategic collaboration platform. Each maturity level will deliver more value towards your business partners and will increase the level of control over your IT vendors.

First level: Processes.

When encountered with an IT contract, most customers start with focusing on the operational processes. Often the ITIL processes are used to manage services and PRINCE2/PMI is used to manage the projects from an operational perspective. Process managers, service managers and project managers are the key players in the relationship with the IT vendors. Vendors are managed primarily through basic reporting which are shared through structured meetings. I call this maturity level the ‘process’ level and it is the basic level within vendor management. It is an important level, this will lay the fundament for your vendor file which will grow with facts and figures.

Second level: Contract.

From this fundament the step towards overall contract performance management is the next maturity level within vendor management. In this maturity level the vendor is managed from an overall contractual perspective. Not just the services are measured and managed but also the other obligations mentioned in the contract. Topics regarding innovation, financials, security and contract, next to services and projects, are now measured, valued and discussed.

This level also pushes the customer to organize itself internally. The performance of the different topics needs to be shared with those involved in managing the vendor. The vendor manager should organize these internal meetings to discuss and share the performance from the different perspectives. By informing each other you are empowering yourself as a team from a governance perspective. one voiceYou will increase your control regarding the vendor’s performance. Now you will have a dashboard with the specific contractual obligations measured and valued. By sharing the contract performance internally you are able to speak with one voice towards the vendor. It is very powerful when you as a customer can share the specific vendor’s improvement areas in every meeting you have with that vendor. Think about One Company, One Voice.

Third level: Personas.

IT organizations know that they have to differentiate their services to meet the end user’s needs. In my perception the end user journey is as important as the customer journey. In order to group the end user’s needs Personas are used. Each Persona described a specific group of users with specific needs from IT. In this maturity level the Persona is used in managing the vendor(s). Instead of generic sla-reports, the performance of specific personas are measured, valued and improved. The persona is defined through all the IT layers; network, hosting, database, application and the end user device. From a governance perspective you may have to change your meetings. You might need to invite all the vendors involved with delivering the service for that specific persona. If you combine this with your end user group meetings you are actually managing the IT value chains from end to end.

Fourth level: IT ecosystem.

IT outsourcing is gradually moving away from office automation. Currently IT is moving rapidly towards the business processes and has an increasing impact on the competitive position of the business. Having acknowledged that you might want to consider your relationship with your tier-1 vendors. In the market you see more and more IT ecosystems arise. This to increase the level of collaboration and in, jointly as a group, executing the IT strategy. When your position in the market is increasingly determined by the use of IT you need to work with your vendor towards the future. Having jointly agreed strategies is one of the characteristics of this maturity level.

Please bare in mind that this level requires the ability and willingness to collaborate with external partners within the IT domain. You will need to organize and manage collaborative behavior. You might even want to agree on the mandatory behavioral aspects within the IT ecosystem. Openness and trust are important ingredients for a successful IT ecosystem

Fifth level: Ecosystem.

In this maturity level we leave the IT domain and position vendor management on the strategic organizational level. The concept of owning or buying a competence is losing its ground. Sharing is the new concept and you see that organizations are more willing to work together without the M&A department being involved. Vendor management has a strategic role in screening the market for improving the ecosystem and the shared value. On CxO-level ecosystems are established with a long term perspective. Within the traditional supply chain domains these ecosystems are more common. From an IT domain still rare.

Concluding

So as you can see I have plotted the IT ecosystem on the right side of the maturity model. I am convinced that having an ecosystem will bring additional value to all partners involved but especially for the business partners. Please keep in mind that we cannot skip maturity levels. Allow yourself to grow into it. I have tried to briefly explain my vendor management maturity model. For comments and/or more info please contact me through email. There is more to share and learn from each other.

 

Warm regards,

Arno Gerrits
Governance Masters

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