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.

2. the executive-level experience to design
and install the entire VMO, but was
able to establish continuity throughout
the extended transition. WGroup
provided day-to-day operational
guidance in high-quality services to
the client’s customer base, managing
risk, establishing new processes for the
stakeholder community, establishing
leverage models for vendors, and
creating vendor strategies.
Results
By integrating new processes and
organizational roles into the client’s
existing culture, WGroup fulfilled
the client’s objective of creating
a fully functioning VMO with
world-class capabilities.This new
VMO is delivering the results and
value as promised, including:
• A highly effective VMO
organization deployed and fully
embraced by IT leaders across
the enterprise and business
• Significant reduction of IT run-
rate expenses, as well as portfolio
cost reduction, with sustainable
reduction processes in place
• Material reduction of risks
Approach
Because of complexity impacting
staff, processes, policy, culture and
technology, transformation to a
VMO required intense planning
involving dozens of leaders from
across the company. WGroup
brought teams of people together to
drive thought leadership in design
as well as critical oversight for the
implementation. Other teams
were established to “operationalize”
the VMO, with representatives
across key functions collaborating
to ensure wide adoption of VMO
processes, standards and practices.
With much at stake, WGroup began
the transformation by enlisting the
help of the CIO to communicate to
IT staff the value of a VMO. With
that established, WGroup worked
with HR and the change leadership
team to develop critical change and
communication plans. WGroup also
delivered detailed job descriptions
for each position within the new
organization and assessed whether
current staff could fill those positions.
Next, a hiring plan was developed
to fill positions that could not be
filled with existing personnel.
Working with the numerous teams
and committees involved in the
implementation including legal
and finance, WGroup established
guidelines, principles, client
relationship management strategies,
a governance model, and the
entire structure of the VMO.
Insights and Advice
Several factors, including the size
and complexity of the organization
and the degree to which the vendor
management function was entrenched
with IT, dictated from the beginning
that transforming this client’s vendor
management to a VMO would require
exceptional effort from a partner with
VMO experience and expertise. The
senior team that WGroup brought to
this engagement not only possessed
Contact Us
WGroup
301 Lindenwood Drive, Suite 301
Malvern, PA 19355
610-854-2700
Copyright © 2012 WGroup. All Rights Reserved.2
013_MCKVMCS_110812
About WGroup
Founded in 1995, WGroup is a boutique management consulting firm
that provides Strategy, Management and Execution Services to
optimize business performance, minimize cost and create value. Our
consultants have years of experience, both as industry executives and
trusted advisors, to help clients think through complicated and pressing
challenges to drive their business forward.
For more information on WGroup, visit http://thinkwgroup.com
• A new service culture with
clients and stakeholders
• Comprehensive due diligence
and transparency
• New VMO governance and
operating teams driving
transparency over all IT vendor
and sourcing processes, risk
management and value creation
• Vendor strategies aligned with
IT strategies, vendor scorecards,
and vendor engagement models
• Responsibilities, processes and
metrics defined with clarity of
specialized critical skills , and
expertise, driving consistency
• A new level of transparency
and collaboration with the
internal client’s stakeholders
• Metrics and accountability
for the client service portfolio
and VMO operations
• Critical analytics, including:
–– Expense reduction
–– Vendor performance
–– Risk and compliance
• A customer service culture