Case Study #4701 - Vendor Management Process : Superannuation

The Situation

A national Superannuation Manager has an IT portfolio numerous supplier and vendor contracts that range from the provision of equipment, products and commodities, through to the management of software licenses, outsourced services and technical expert resources for projects.

The organisation recognised that their approach to vendor management was inconsistent and was particularly cumbersome when multiple vendors co-contribute in the provision of services to the organisation, or where the services are provided to multiple business units.

Our Approach

The organisation wanted to develop and implement a Vendor Management regime that would allow them to monitor, track and efficiently and effectively manage existing and future IT contract arrangements. Cherub was engaged in a combined consulting / coaching role to work with the Manager responsible for establishing the Vendor Management Framework. 

The fundamental elements of the framework comprised:

  • Establishing a common and consistent vendor management definition and terminology

  • Defining the contract lifecycle and the key activities within the lifecycle

  • Defining the six primary capabilities that make up the Vendor Management role, and understanding the level of contribution each makes at each stage of a contract’s lifecycle

  • Using a RASCI style Responsibility Matrix to define client - vendor management interfaces

  • Developing a Vendor Maturity Level model to rate vendor’s strategic importance using criteria such as contract value, the impact of delivery failure, and availability of alternate vendors

  • Aligning the Vendor Maturity Level model to the RASCI model, appreciating that day to day management, monitoring and reporting would require greater effort for strategically important vendors compared to less strategically important vendors.

Client Benefits

The Vendor Management Framework combines the interactions of Contract Types, Lifecycle Stages, Information Flow and Competency and Proficiency requirements to allow effective and efficient Vendor Management.  Understanding that some vendors require “higher” vendor management effort (monitoring, operational meetings, reporting, service tracking, etc), will enable the organisation to understand its obligations with respect to numbers of resources required from across the organisation to ensure an effective vendor management regime. In turn, these expectations can be incorporated into future contracts or service requests for new services or products, at the Requirements phase of the contract lifecycle, so that respondents will understand their obligations when delivering the requested services to the organisation.

Further Information

For more information, please contact our lead Director for this engagement.
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