Why Vendor Management?

There are several reasons why organizations require a Disciplined Agile^® (DA^™) approach to vendor management:

1. Complexity and competition are increasing. Simply put, we can't do it alone anymore.
2. Effective partnering reduces overall risk. Effective vendor management can help our organizations to reduce risk several ways. First, we address skills-related and capacity-related risks through hiring contractors or outsourcing some aspects of our work to organizations with greater expertise in it. Second, by partnering with other organizations to bring a new offering to market we spread the risk of that venture across organizations. Yes, there are inherent risks to working with partners, risks that are mitigated through effective governance strategies and adoption of the DA mindset for vendor management. Third, by purchasing big-ticket or specialized items via sourcing specialists we reduce the risk of making inappropriate purchases.
3. We deliver more, and do so quicker, to our customers. By working with external organizations we extend our ability to deliver new or enhanced offerings to our customers, thereby providing greater value to them. As you see in Figure 1, working with external partners expands the potential number of people we can collaborate with.
4. We can expand our market reach and impact. By working with vendors, either via a customer-supplier relationship or through a true partnering relationship, we can expand our value streams or even create new ones. We do this through building more robust offerings – products and services.