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'Counsellors' to keep vendor-client marriages sweet
And stop contracts ending in divorce

By Nick Heath

Published: Thursday 27 March 2008

An increasing number of companies buying IT products and services are hoping to avoid contract problems or even a messy divorce by setting up a 'vendor management office' (VMO) to keep tighter control of suppliers, according to a report by Forrester Research.

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VMOs are essentially marriage counsellors for IT vendors and clients, helping to stop them from straying from the bliss of their contract service level agreements.

A team of experts within the VMO help choose the best vendors, negotiate discounts, monitor their performance and reinforce best practice.

The survey of 1,000 IT decision makers found 51 per cent of those from Europe had formalised VMOs, as had 47 per cent in the US.

Almost half (48 per cent) of respondents said vendor management capabilities were either on the agenda or a critical priority.

John C McCarthy, principal analyst with Forrester Research, said in a statement: "These efforts represent a key part of firms' strategy to bring more maturity and process discipline to IT and take an 'activist sourcing' approach."

The report says the VMOs can also help focus spending by assessing the account's importance to the supplier and drive supplier accountability by scoring vendor performance.