‘The goal of the Supplier Management process is to manage suppliers and the services they supply, to provide seamless quality of IT service to the business, ensuring value for money is obtained.’
The Supplier Management process ensures that suppliers and the services they provide are managed to support IT service targets and business expectations. The aim of this section is to raise awareness of the business context of working with partners and suppliers, and how this work can best be directed toward realising business benefit for the organization.
It is essential that Supplier Management processes and planning are involved in all stages of the Service Lifecycle, from strategy and design, through transition and operation, to improvement. The complex business demands require the complete breadth of skills and capability to support provision of a comprehensive set of IT services to a business, therefore the use of value networks and the suppliers and the services they provide are an integral part of any end-to-end solution. Suppliers and the management of suppliers and partners are essential to the provision of quality IT services.
The purpose of the Supplier Management process is to obtain value for money from suppliers and to ensure that suppliers perform to the targets contained within their contracts and agreements, while conforming to all of the terms and conditions.
The main objectives of the Supplier Management process are to:
The Supplier Management process should include the management of all suppliers and contracts needed to support the provision of IT services to the business. Each service provider should have formal processes for the management of all suppliers and contracts. However, the processes should adapt to cater for the importance of the supplier and/or the contract and the potential business impact on the provision of services. Many suppliers provide support services and products that independently have a relatively minor, and fairly indirect, role in value generation, but collectively make a direct and important contribution to value generation and the implementation of the overall business strategy. The greater the contribution the supplier makes to business value, the more effort the service provider should put into the management of the supplier and the more that supplier should be involved in the development and realization of the business strategy. The smaller the supplier’s value contribution, the more likely it is that the relationship will be managed mainly at an operational level, with limited interaction with the business. It may be appropriate in some organizations, particularly large ones, to manage internal teams and suppliers, where different business units may provide support of key elements.
The Supplier Management process should include:
IT Supplier Management often has to comply with organizational or corporate standards, guidelines and requirements, particularly those of corporate legal, finance and purchasing, as illustrated in Figure 4.29.
Figure 4.29 Supplier Management – roles and interfaces
In order to ensure that suppliers provide value for money and meet their service targets, the relationship between each supplier should be owned by an individual within the service provider organization. However, a single individual may own the relationship for one or many suppliers, as illustrated in Figure 4.29. To ensure that relationships are developed in a consistent manner and that suppliers’ performance is appropriately reviewed and managed, roles need to be established for a Supplier Management process owner and a Contracts Manager. In smaller organizations, these separate roles may be combined into a single responsibility.