WGroup assessed the client's existing vendor management practices and built a case for a new Vendor Management Office (VMO). They designed and implemented a new VMO that was embraced by leadership. The new VMO delivered results including significant cost reductions, risk mitigation, and a highly effective organization with clear responsibilities and processes.
1. Opportunity
As an organization grows, important
functions are often constrained within a
framework that may have worked well
at one time, but can no longer support
expanded needs and activities. For this
client, an industry leader in healthcare
and life sciences, vendor management
had long been administered through
its Corporate Procurement function,
but senior management recognized
the need for change. WGroup, because
of its extensive experience with
VMOs and its deep knowledge of the
health care and life sciences industry,
was selected to develop a detailed
assessment of the client’s existing
vendor management. WGroup was
also asked to make recommendations
based on the assessment for the
design and implementation of
a fully functioning VMO.
WGroup looked at the entire vendor
management operation, including the
organization, processes, technology and
tools, to determine what was working
and what was not. WGroup discovered
critical needs and opportunities in
vendor management and sourcing,
including due diligence, governance,
contract management, RFX processes,
vendor strategies, IT strategy
alignment, demand management,
performance management, industry
research, metrics and analytics.
The WGroup team carefully built
the business case to move forward
with a VMO. First they identified
significant impact opportunities. For
example, they determined that a new
VMO organization would significantly
reduce run-rate operating expenses,
and would clarify and expand vendor
and sourcing responsibilities and
skills.They also showed how a VMO
would establishment consistency with
controls to eliminate key risks with
costs, compliance, operating, etc.
Next they demonstrated how the
instillation of a process-driven
organization would promote
consistency and performance, and
create an important shift from an
organization of generalists to one of
specialists with required skills.The
new organization would effectively
eliminate contracts signed without
due diligence and governance.The
formation of vendor strategies would
achieve a single view of vendors and
spend, vendor master, and contract
repository, while aligning vendor
strategies with IT strategies.
Finally, the WGroup team showed
that a VMO would establish new
credibility and relationships with
stakeholders.The new organization
would also substantially increase
leverage with vendors. Moreover, the
client would be able to create new
governance teams to drive transparency,
revise and enforce policies, and foster
a new results-focused culture.
Senior management fully embraced
WGroup’s fact-based findings,
recognized the magnitude of the
impact opportunity, and quickly
engaged WGroup to proceed with
implementation of the VMO.
Drive Your Business
Vendor Management Office
(VMO)
WGroup Leads Strategy, Design, Implementation and
Operations of World Class VMO for Fortune 20 Client
Health Care & Life Sciences | Vendor Management
1
Drawing on its
specialized expertise
in vendor management,
WGroup assessed the
client’s existing vendor
management and
sourcing practices, built
the business case for a
VMO, and designed and
deployed a new VMO that
was fully embraced by IT
and business leadership.