Creating a collaborative relationship with key suppliers has been key to operational excellence and effective cooperation. On this journey, it is important to recognize that we do not always share the same objectives and that this is okay. Creating a transparent relationship where we can openly discuss our differences will help us achieve a positive outcome. These things to do not happen by themselves and it takes an orchestrated effort, commitment and leadership to get to value realization.

When a VMO is established as a separate entity from the delivery organization, the focus tends to be on more tactical governance and contract management related activities. However, for value to be delivered it is important to also ensure that underlying operational processes are well defined and that they will enable effective collaboration between supplier teams, between suppliers and with the retained team. This requires that key activities are performed on the same system, e.g. ServiceNow. This foundation allows the client side to more effectively monitor performance and also generate their own KPI’s and service level results. Governance functions are still needed, of course, and the VMO function will get better insights from such an operational model to ensure SLA and consumption review and approvals.

Successful Key third party agreements will support and compliment client organizations by delivering value, managing costs, and meeting the needs of the business function. This requires an active engagement model led by the client to drive program and investment prioritization and defining services with their associated performance measurement. Key suppliers are incorporated as appropriate. This is most effective when retained organization are both empowered and accountable within this engagement model and the VMO takes more of a back-seat.