Creating a Strategic Roadmap for Vendor Management

Cloud delivery models, regulations, reduced cycle times and an increasingly digital economy demand radical changes to vendor management.

Vendor management (VM) as a formal discipline is rapidly emerging as enterprises demand more from vendors in order to deliver value and innovation.

Today’s VM leaders face challenges that go well beyond cost optimization and vendor performance monitoring, according to Christopher Ambrose, research vice president at Gartner. Digital business, the effects of consumerization, and disruptive forces such as cloud models and mobile applications are driving a need to execute VM functions with increasing speed and precision.

On the positive side, VM leaders have greater access than ever to increasingly advanced technologies, tools and capabilities with which to execute their programs. New methods are emerging that take advantage of big data analytics and advanced solutions to help evaluate and monitor vendor risk, compliance and performance. Collaboration tools can link stakeholders, as well as vendors, into VM processes to enable a “360 degree” view of strategic vendor relationships and progress toward business outcomes.

It’s not surprising then that VM was high on the agenda at Gartner’s recent IT Financial, Procurement & Asset Management and Sourcing &Strategic Vendor Relationships Summits.

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“In many highly regulated industries, such as banking and financial services, VM functions are no longer optional,” said Mr. Ambrose. “Although regulatory pressures are growing, improving VM should not just be a response to regulations, but rather a desire to apply a better and more standardized discipline to the management of the life cycle of vendor relationships. Advanced VM methods are emerging that accelerate maturity, moving VM from reactive monitoring and reporting functions to proactive, business-critical disciplines.”

Gartner has outlined a vision for the future state of VM by examining the current state and related gaps that require bridging. This strategic roadmap includes a migration plan that will support a more strategic VM culture.


“The discipline of VM is swiftly transforming, both in terms of its depth and reach, in order to support business goals, drive value through the vendor ecosystem and minimize exposure to risks introduced by vendors,” said Mr. Ambrose. “By 2017, CIOs will develop vendor relationship skills as a top-five competency to extract business value and innovation from strategic vendors.”


Gartner clients can learn more in the report 2015 Strategic Roadmap for Vendor Management by Christopher Ambrose, et al.

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