Effective IT Vendor Management Strategies

This assignment discusses the importance of IT vendor management in the IT industry. It outlines six steps to manage a healthy relationship with vendors, including developing a detailed strategy, selecting the right criteria, and negotiating contracts. The risks and results of poor IT vendor management are also highlighted. The reference list provides additional sources for further research.

Running head: IMPLEMENTATION OF IT VENDOR MANAGEMENT
Implementation of IT Vendor Management
Name of the Student
Name of the University
Author Note

1IMPLEMENTATION OF IT VENDOR MANAGEMENT
Question: As an IT leader, how would you approach managing the IT vendor relationship?
What are the risks and the result?
The IT industry outsources many services that costs almost half the budget of individual
projects. Therefore, IT vendor relationship is an important aspect that I would like to address
here. There are six steps that I would utilize to manage a healthy relationship with the vendors.
 A detailed and vendor specific strategy must be developed that not only fulfils the needs
of the organization but also that of the vendor. Every vendor is and the product or
services they are offering is unique (Bullen, LeFave & Selig, 2017). Thus, separate plans
must be designed for individual vendors. These plans will include transparency, honesty
and involving them in the process. Integrating honesty and transparency would aid in
developing mutual trust between the organization and the vendors as they would work in
alliance to achieve their goals and objectives. Organizations usually do not take the help
of the vendors in the problem-solving process. However, they can be very creative when
it comes to providing solutions to different problems.
 The vendor selection criteria must be identified and established by the stakeholders as
this list would determine the standards of the vendors participating in the bidding
process. Selecting the right criteria reduces any form of biasing towards vendors and it
would also provide an opportunity to work with vendors who respect and align with the
organization’s ethical values.
 A bid document must be created to standardize the bidding process. This document is
formal in nature and it aids in documenting the process of Request for Quotation (RFQ),
Request for Information (RFI) or Request for Proposal (RFP). The questions that are
aimed at selecting the vendors in the bid document must be carefully designed to

2IMPLEMENTATION OF IT VENDOR MANAGEMENT
evaluate the potential vendors as candidates suitable to fulfill the organization’s needs
(Roberts, 2014).
 The suppliers would be selected in an unbiased method. To accomplish this step, the
selection criteria must account for more than the cost saving condition. Most
organizations only opt for vendors who give quote low prices in the bidding process.
However, experienced IT leaders must focus on quality as well (Schmidt, 2017). Hence,
they would choose vendors who would provide quality products and services in fair price
and adhere to the ethics of the organization.
 Contract negotiation is an important strategy as the terms of agreement are developed in
this procedure. The IT vendor partnership is dependent on the terms of contract agreed
upon by both parties. Thus, it is vital that the terms accommodate the needs of the
organization and the vendor.
 Long-term benefits must be focused in instead of short-time benefits as the organization
will incur more cost by switching vendors frequently.
Risks: The IT industry is becoming more focused on creating various initiatives that boost
strategy in the business. This has created the need for a rapid change in the technology employed
by the company and implementation of the latest security standards (St. John, Guynes &
Vedder, 2014). The finance department is responsible for creating a budget for equipment
procurement. These pose significant risks towards the IT vendor relationship.
Result: The result being significant improvement in the relationship between the IT
department and the vendors.

3IMPLEMENTATION OF IT VENDOR MANAGEMENT
Reference List
Bullen, C. V., LeFave, R., & Selig, G. J. (2017). Client–Vendor Relationship Management in
Global Sourcing. In Global Sourcing Of Services: Strategies, Issues And Challenges (pp.
301-333).
Roberts, D. (2014). Managing the Vendor Relationship. Unleashing the Power of IT, 2nd
edition: Bringing People, Business, and Technology Together, 129-146.
Schmidt, N. (2017). The client-vendor relationship in information technology outsourcing:
constituents, quality, and culture.
St. John, J., Guynes, C. S., & Vedder, R. (2014). The client–vendor offshore relationship:
success factors. Information Systems Management, 31(2), 120-125.