Worked on this with a Team in Scrum Coaching Retreat Goa 2016 Amit Kulkarni Carlos Martin Anand Sulur Murugan Jeyaprakash Rajaram JP Subrahmaniam SRV

1. Vendor Management Manifesto
By
Amit Kulkarni, CSP, CSM, CSPO
Gaurav Rastogi, CSP, CSM, CSPO
Carlos Martin
Jeyaprakash Rajaram (JP), CSP, CSM
Anand Sulur Murugan, CSM
Subrahmaniam SRV (Subbu), CSP, CSM
Executive Sponsorship
Madhur Kathuria, CST, CEC

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Contents
1 Introduction.................................................................................................................3
1.1 The Governance .................................................................................................4
1.2 The Roles ...............................................................................................................4
1.3 The Objective of this Manifesto.........................................................................4
2 The Opening Statement............................................................................................5
3 The Twelve Principles .................................................................................................6
3.1 Risk Sharing over Risk Transfer ............................................................................6
3.2 Featured Based Payments over Milestone Based..........................................6
3.3 Outcome Based Productivity over Utilization Based .....................................6
3.4 Team Based Ownership over Management Based ......................................6
3.5 One Team over Partnership...............................................................................6
3.6 Long Term Relationships over Fungible Contracts .........................................6
3.7 End to End Contracts over Horizontal Contracts ...........................................6
3.8 Focus on Products over Activities .....................................................................7
3.9 Business KPI over Operational KPI (Key Performance Indicators)................7
3.10 Transparency over Bureaucracy ...................................................................7
3.11 Respond over React........................................................................................7
3.12 Contingency in Scope over Contingency in Time and Cost....................7
4 The process for coming up with the Manifesto .....................................................8

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1 Introduction
In a Customer-Supplier environment, the primary stakeholders are
The Customer’s Management
(Includes the Vendor Management Team)
Product Owner
Scrum Master Team
The Supplier Management

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1.1 The Governance
The delivery team is governed by contracts. There are 2 types of contract we will
be considering
 The Master Contract : This is a contract signed between the Customer and
Supplier Management teams and governs the entire set of Scrum projects
being executed.
 The individual work order level contracts: This is a contract which will
govern the detailed work to be done by teams.
This manifesto will take into account both the type of contract
1.2 The Roles
The roles covered under this Manifesto are as follows
The Customer Management This is the management team of the customer
The Vendor Management
Team
Vendor Management team will work on behalf of the
Customer Management team in preparing the contract
and negotiating the same with the Supplier’s
management
The Team The team will consist of multiple Scrum teams working
on the projects governed under the Master Contract.
They will end up working under the individual Work
Orders signed up with the customer.
The Supplier Management The Supplier Management team will negotiate the
terms and conditions of the Master Contract of the
contract along with the The Customer Management
team (and the Vendor Management team).
1.3 The Objective of this Manifesto
The Objective of this Manifesto is to define guiding principles around the
Customer-Supplier working environment with regards to working on Scrum
projects. The assumptions made are
 The environment is customer-supplier (i.e. an outsourced environment)
 The environment is distributed and may not be co-located
 The environment involves multiple vendors

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2 The Opening Statement
The Customers and Suppliers are integrated elements of a working environment
in a project. The Customers and Suppliers will work together with a common
goal and that is “Producing Value for the End Customer”. This manifesto supports
the Agile Manifesto Value “Customer Collaboration over Contract Negotiation”.
There are 12 principles which will support the Agile Value and are presented
below in a format of Left over Right. The items on the right are valued more than
the left.

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3 The Twelve Principles
3.1 Risk Sharing over Risk Transfer
The Customer Management and Supplier Management should own the risk
collectively to create a joint ownership.
3.2 Featured Based Payments over Milestone Based
Payments are based on Business value i.e. payments are made when features
are completed or released or when Business Value is delivered).
3.3 Outcome Based Productivity over Utilization Based
Productivity should be measured in the Scrum Projects. However, the contract
should propose productivity measures based on the business value generated
vs the utilization of the resources.
3.4 Team Based Ownership over Management Based
Commitments in a contract should be endorsed by the teams. The contracts
should support the endorsement of teams for the work to be executed by the
teams.
3.5 One Team over Partnership
Culture of one team one vision will lead to a long-lasting relationship and create
a win-win for the Customer and Supplier.
3.6 Long Term Relationships over Fungible Contracts
Considering Profit, Stability and Business Value as 3 pillars for a Customer-Supplier
relationship to provide business value, it is important to have long-term
commitments that leads to more ownerships and alignment to the vision of the
Customer.
3.7 End to End Contracts over Horizontal Contracts
Contracts should be made based on Products/Feature Based Deliverables
(Vertical Slice or end-to-end) over activity/skill-based based contract (Horizontal
slice e.g. Development, Testing, Acceptance etc)

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Customer Management mindset must facilitate cross-functional (Vertical Slice)
contracts.
3.8 Focus on Products over Activities
Focus on product delivery rather than on delivering activities.
3.9 Business KPI over Operational KPI (Key Performance
Indicators)
Focus on Business KPI over Operational KPI will give opportunity to bring down
the cost of correction thus increasing the value yielded by the organization.
3.10 Transparency over Bureaucracy
Transparent Culture between Customer and Supplier will facilitate collaboration
and reduction in escalation and bureaucracy.
3.11 Respond over React
Contracts Governance should enable alignment between customer and
Supplier Management so that potential escalations are responded at the
earliest.
3.12 Contingency in Scope over Contingency in Time and
Cost
Contracts should enable high-priority changes to be incorporated even late in
the delivery cycle without increasing the time and cost of the project.

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4 The process for coming up with the Manifesto
The team came together during the Scrum Coaching Retreat at Goa on 31st
Jan, 1st Feb and 2nd Feb and discussed and deliberated over how the contracts
should be structured to enable Agile implementations.
 The team was assembled on 31st Jan


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 Executive Guidance and Sponsorship was provided by Madhur Kathuria,
CST and organizer of the Scrum Retreat at Goa.

 The team decided a backlog at the start of the Sprint 0 on 31st January

 During the first sprint, the team worked on “Mindset of Supplier’s
Management”, “Mindset of the Vendor Management / Customer
Management” and “Mindset of the team” with regards to Contracts and
Work Orders.
 During the Second Sprint, the team worked on items related to the
changes required in the Fixed Price (FP) contract, Time and Material
Contracts (T&M) and Master Contract to enable agility.
 The Sprints and progress was tracked meticulously

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


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

 During the First and Second Sprint, while discussing the items, the team
came up with Guiding Principles on Vendor Management process.

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
 During the Third and Final Sprint, a Vendor Management Manifesto was
prepared and the Manifesto documented.