Procurement/IT Specific Lessons and Observations: Forrester’s Sourcing and Vendor Management Forum

It was a pleasure to attend Forrester's Sourcing and Vendor Management Forum last week. Even though I did not necessarily agree with all the points in the content of every presenter, the keynotes were of a uniformly high quality and Forrester continues to prove itself to me as the analyst firm with the greatest focus on event/speaking presentation style, storylines and overall quality control and consistency. Forrester is one firm that knows how to polish content. This was true a decade ago, and it's true today. If you've not been to a Forrester event and you're in the procurement or supply chain world, definitely put it on your list to try. Both the analyst-led and practitioner-led keynotes provided significant useful fodder and insight. Rather than offer a general summary of the two-day event, I'll provide a few high-level lessons and observations.

Some of these ideas came not from the presentations, but rather general networking discussions and interactions I had with analysts, practitioners and other vendors in attendance. To keep this post succinct, I'll offer the condensed version of these points today and refer back to them in future posts:

  • IT organizations and procurement specialists have a lot to teach corporate procurement about vendor and supplier performance management. It's my belief that IT is generally ahead of most other functional areas in vendor management when it comes to managing and working with key suppliers outside of the negotiation/contracting phases
  • IT does not think about risk management enough when it comes to both basic (e.g., supplier financial/operational viability) and more advanced use cases
  • Most IT sourcing and negotiation sophistication is relatively basic at this point. Larger negotiations would benefit from the application of optimization and related non zero-sum-game price discovery tools
  • IT sourcing and vendor management can be as important to the top line (from a growth expansion perspective, especially geographically) as it is to the bottom line
  • Cloud deployment approaches are enabling business users to make more decisions independent of IT, which presents both risk and opportunity -- many organizations are not fully aware of the "sourcing" decisions that business users make every day when it comes to technology
  • Services procurement/VMS is largely disconnected from the broader IT sourcing and vendor management discussion. We need to build greater bridges between VMS/MSP and related considerations and issues, especially as services procurement within IT moves to embrace SOW and project-based models on a more frequent basis
  • The universe of potential "deal advisers" in IT sourcing and IT outsourcing/BPO is confusing to those who aren't initiated. A combination of tech analyst firms (e.g., Forrester, Gartner) as well as large SIs as well as deal advisers in the BPO space and independent consultants are capable of providing good advice. Yet make sure your potential adviser knows the area that they're advising on (e.g., "cloud" is not the same as enterprise, nor is P2P the same as HCM)

What do you think about the intersection of IT and related services procurement areas with the broader sourcing and vendor management portfolio? I'd be curious to start an ongoing discussion about what procurement can apply from specific IT lessons to other categories (as well as what IT and vendor management organizations can learn and apply from centralized procurement efforts).

Jason Busch

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