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Wednesday, March 7, 2012

General Principles Used in Supplier Management

Supplier Management is, of course, about negotiating contracts that are consistent with the needs of the business and that support the achievement of targets in the relevant SLAs. It is also about managing the longer-term relationship with suppliers and their continuing performance. It requires positive management throughout the contract lifecycle, monitoring delivery and performance to identify and deal with issues and potential problems before they occur. It involves the renegotiation, renewal and even the termination of contracts as the needs of the business change. It involves monitoring the extent to which contracts continue to deliver good value for money as the marketplace and technological options change over time and this in turn means maintaining a comprehensive base of information about the marketplace and the suppliers that populate it.

In order to benefit fully from the relationship with a supplier, the IT service provider must have a clear understanding of where it wants to be. It needs to understand and articulate its own long-term goals in the context of the business it serves, and to define the services it must design and develop in order to achieve these goals. An analysis of its own resources and capabilities against the resources and capabilities needed to deliver these services will identify areas where external assistance may be required, and this analysis, along with an analysis of risks, will provide a foundation for the development of new or changing relationships with suppliers.

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