Service Design
Supplier Management
Introduction
Supplier Management aligns with corporate requirements and other IT and Service
Management processes.
Objectives
The purpose of Supplier Management is to obtain value for money from suppliers and ensure suppliersperform according to the contracts and agreements.
Objectives of Supplier Management are:
• Obtain value for money from supplier and contracts.
• Ensure that underpinning contracts and agreements with suppliers are aligned to business needs, support, targetsin SLRs and SLAs.
• Manage relationships with suppliers.
• Manage supplier performance.
• Provide assistance in managing,negotiating and agreeingon the contracts with suppliers.
• Maintain a supplier policy and a supporting Supplier and Contract Database
(SCD).
Supplier Management managesthe contract lifecycle.The contract lifecycle contains integral processes that ensure contracts are maintained and managedproperly.
Processes carried out by SupplierManagement include:
• Evaluation of new suppliers and contracts.
• Supplier categorization and maintenance of the Supplier and Contracts
Database (SCD).
• Establishing new suppliers and contracts.
• Supplier and contract management performance.
• Contract renewal and/or termination.
Many Key Performance Indicators (KPIs) canbe used to assess the effectiveness and efficiency of the Supplier Management processes and activities. Some of the metrics include:
• Business protection from poor supplier performance or disruption
• Alignment of supporting services and their targets with business needs and targets
• The availability of services is not compromisedby supplier performance
• Clear ownership and awareness of supplier and contractual issues
Scope
The supplier management process should include:
• Implementation and enforcement of the supplier policy
• Maintenance of an SCMIS
• Supplier and contract categorization and risk assessment
• Supplier and contract evaluation and selection
• Development, negotiation and agreement of contracts
• Contract review, renewal and termination
• Management of suppliersand supplier performance
• Identification of improvement opportunities forinclusion in the CSI register, and the implementation of service and supplier improvement plans
• Maintenance of standard contracts, terms and conditions
• Management of contractual dispute resolution
• Management of sub-contracted suppliers
Supplier Categorization
Some form of categorization scheme should exist within the supplier management process to categorize the supplier and their importance to the service provider and the servicesprovided to the business.
One of the best methods for categorizing suppliers is based on assessing the risk and impact associated with using the supplier,and the value and importanceof the supplier and its services to the business.
The amountof time and effort spent managing the supplierand the relationship can then be appropriate to its categorization.
Roles
The responsibilities of a Supplier Managerinclude:
• The achievement of the process goals.
• Assistance for SLAs, contractsand agreements.
• Value for money is obtained from all IT suppliers.
• Consistency of all IT supplier processes.
• All suppliers and contracts are reviewed and risk-assessed on a regular basis.
More details on the responsibilities of a SupplierManager:
• Assist in developing and reviewing SLAs, contracts, agreements and documentations.
• Ensure value for money is obtained.
• Ensure all IT supplier processes are consistent.
• Maintain and review Supplier and Contracts database (SCD).
• Review and risk assessment of all suppliers and contracts.
• Ensure underpinningcontracts, agreements and SLAs align with the business.
• Ensure all supporting services are scoped and documented.
• Ensure all roles and relationships documentedand maintained.
• Review contracts and SLAs.
• Update contracts or SLAs when required and proceed with Change
Management.
• Monitor, report and review supplier performance.
• Ensure changes are assessed.
• Coordinate and support all individual IT supplier and contract managers.
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