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Northeastern Regional Bank Vendor Management Office Development
Background
The bank’s Information Services (IS) executives recognized a need for centralized vendor management. They took the first steps in developing a vendor management office (VMO) and reassigned existing employees to staff it. They had developed a vendor scorecard, defined a couple of contract templates, began gathering IT category contracts, and started building the framework for the IT VMO structure. While much was accomplished in a short period, the IS executives wanted to hasten the development and maturity of the VMO and begin offering its capabilities as an enterprise-wide shared service.
Approach
The W Group performed an assessment of the VMO’s strategic sourcing, vendor management, and contract management practices, encompassing its policies and processes, systems, and resources. Information was gathered from interviews with IS executives, VMO resources, and internal constituents. The W Group reviewed IT contracts, spending data, existing VMO tools and systems, and other sources of information. The bank’s practices were compared to high-value practices from the VMOs of other companies, and gaps were identified. Based on the bank’s vision, The W Group developed a customized project plan to address gaps and further enhance the VMO service offerings. The W Group worked collaboratively with the bank’s VMO resources and the combined teams jointly:
Achieved enterprise-wide VMO scope and authority through board-approved vendor management policy revisions, that now require VMO review on all contracts before approval, mandate use of the VMO contract repository, and have the VMO pre-qualify third parties for regulatory compliance.
Defined and trained staff members on all VMO business processes.
Selected and implemented a contract management tool, gathered contracts, and transitioned records into the tool.
Recommended and oversaw the implementation of vendor database enhancements.
Defined the VMO organizational structure and job descriptions, and recruited a category manager.
Introduced the VMO relationship manager role and communications methodology.
Results
Our collaboration led to functional improvements, including:
An enterprise-wide VMO with the authority and ability to monitor and oversee regulatory compliance
Implemented organizational structure, skills, and processes for VMO to derive optimal value from key vendor relationships using the VMO’s disciplined approach to strategic sourcing and management.
These efforts will allow the client a better view of their spending and relationships, leading to identification of future opportunities and increased cost savings.
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