I was recently discussing vendor management with a group of telecom, mobility, and IT management industry professionals. We were debating the efficacy of various tactics to reduce relationship friction that leads to inevitable separation if not resolved. Vendor scorecards, get well plans, scope of work revisions, technology upgrades, and many other topics were explored. It was a lively dialog.

One of the participants changed the trajectory of the conversation by asking: Has anyone ever separated from a vendor when there was no friction and the products and services worked as advertised? People paused and reflected. One after another said they had.

Then, she asked: Why? We no longer required their services. We upgraded our technology. We changed our strategy. Then, the statement that summarized the why’s was uttered: In each of these cases the vendors no longer delivered business value.

As it turns out, lack of business value is a universal relationship killer. Lack of value can be caused by products and services that don’t work to spec or professional services that don’t perform as committed. Alternatively, everything could work exactly as advertised but the value delivered no longer meets the business needs.

Vendor managers know how to leverage various vendor management techniques to guide vendors towards optimal performance. In the end, though, business value delivered is the make-or-break factor for all business relationships and the most effective vendor managers understand how to translate and measure business value delivered by each relationship they manage.

Photo of Tim Colwell
Tim is Executive Vice President at AOTMP®

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