As mature organizations begin to implement IT Sourcing Strategy & Vendor Management Offices, these initiatives must begin to account and operate in areas of uncertainty that comes along with developing new relationships for sourced products or services. Sourcing Strategy comprises of the philosophy, decisions, and implementation approach in dealing with potential service providers in an organization to achieve its business objectives. Vendor Management empowers an organization to benefit from the excellent service contracted service provider’s offer, while managing costs and mitigation of risks. A mature Information Technology Vendor Management Office, “IT VMO,” will result in a greater value in engagements, and create mutually beneficial relationships between the organization and service providers.
As the Sourcing environment becomes global, perhaps with many unique set of interacting partners, the importance of a proper risk approach management becomes more essential. The risk management of potential third party IT Vendors is not only to establish a framework in which sourcing partners and an organization’s VMO will identify risks, but to develop strategies to mitigate and avoid those risks. However, before IT third party risks can be identified and managed within the IT VMO, there are preliminary elements which must be accounted and measured by each sourcing provider to the organization.
The foundation of an effective IT VMO relies on the maturity and implementation of four key processes risk areas. Within each of these key processes there are two subareas of Vendor Management, each with their own set of risks that can occur during the life of an organization’s IT VMO. Within the Sourcing & VMO lifecycle, these risk areas need to be constantly assessed and mitigated.
As the Sourcing environment becomes global, perhaps with many unique set of interacting partners, the importance of a proper risk approach management becomes more essential. The risk management of potential third party IT Vendors is not only to establish a framework in which sourcing partners and an organization’s VMO will identify risks, but to develop strategies to mitigate and avoid those risks. However, before IT third party risks can be identified and managed within the IT VMO, there are preliminary elements which must be accounted and measured by each sourcing provider to the organization.
The foundation of an effective IT VMO relies on the maturity and implementation of four key processes risk areas. Within each of these key processes there are two subareas of Vendor Management, each with their own set of risks that can occur during the life of an organization’s IT VMO. Within the Sourcing & VMO lifecycle, these risk areas need to be constantly assessed and mitigated.
