The Trouble with Vendor Management

Michael Vizard
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Real Questions for BI Vendors

Click through to see the questions Ann discovered that can make a tangible difference in your diligence.

Most IT organizations don't really have a good handle on how any given vendor that they rely on is actually performing. In reality, the vendors they hate are usually not performing nearly as bad as the IT management thinks and, conversely, the vendors they like are not nearly as good as everybody seems to think. The problem is that the performance of these vendors over any extended period of time is not really being measured, so all anybody has to go by is some anecdotal evidence and the occasional report that was run for one specific period of time.

Clearly, IT organizations need a better way to manage vendors if for no other reason than vendors like to go around IT to make claims in front of executive management that usually have little to no basis in actual fact. The problem is, however, that far too many IT organizations are relying on spreadsheets that provide little context or insight into how a vendor is performing.

One company trying to address this issue is Apptio, which recently added a vendor relationship module to the spring 2011 release of its IT financial management tools. Available as a software-as-a-service (SaaS) application, the basic idea behind Apptio and several other similar tools is to give IT managers a more sophisticated set of applications for managing IT. The latest release of Apptio, for example, includes a set of demand forecasting tools as well.


The one thing that IT organizations can count on is that vendors are essentially compiling a dossier on them, which is usually stored in a customer relationship management (CRM) system. A vendor relationship module is essentially the inverse of a CRM application, only with the emphasis being on how to manage a supplier rather than an end customer. So it behooves an IT organization to have some sort of vendor management system in place if only to protect themselves from baseless claims.

As Chris Pick, chief marketing officer for Apptio notes, in this age of outsourcing and cloud computing, managing primary vendors and sub-contractors is getting more complex all the time. The end result is that not nearly as many things are being measured within the context of a service-level agreement (SLA), which effectively makes those agreements generally useless. The only way to put any teeth back into those agreements is to start measuring vendor performance, because as the old adage goes, things measured are usually things done.

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Aug 13, 2012 10:37 PM Marcella Hughes Marcella Hughes  says:
Most IT organizations don't really have a good handle on how any given vendor that they rely on is actually performing. Reply

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