You can blame the cloud or the rise of the niche vendors, but few in IT management would doubt that running an IT department is a much more complex task than it once was.
Vendor management is increasingly important skill according to analysts because new ways of delivering IT services introduce a high degree of risk that requires tight control. Analyst Gartner has put together a four-step strategy which it says can help:
Governance. The first thing is to set out the lines of responsibility, Gartner says. Identify the potential opportunities and set out who is responsible for them. This may seem blindingly obvious — you need to establish responsibilities before you embark on any strategy — but what is interesting is Gartner's emphasis on the fact that these lines should be flexible from the get-go. As ever, it is a case that you don't know what you don't know and you won't until you get going.
People and organisations. You should have people experienced in sourcing products and services, cost management and contract negotiation but to manage vendors in the digital era will often require new, or better, skills. These will include skills in data analytics, risk management and financial competency but above all, Gartner says, skills in collaboration. What you need, they say, is "a multi-talented layer of employees" but they don't say much about how you are going to source these multi-talented paragons.
Processes and tools. Vendor management will increasingly be recognised as a distinct skill in its own right and a core part of an IT managers responsibilities, Gartner reckons, so smart C-level execs would do well to start honing their skills in this area. They should be keeping a close eye on newcomers to their field of interest and be in a position to assess their potential usefulness. Above all, they should be in a position to brief their more senior colleagues and especially in the cloud area.
Analytics and trending. Gartner assumes that most IT departments already know all about using internal, historical data for review purposes. What they need to focus on now, the analysts believe, is all of the external sources that can be used and can be useful. "Merging internal and external data and tracking trends … will lead to better vendor intelligence," Gartner says. "This will help with current vendor decisions, such as who to include in a request for proposal."
Ovum analyst, Gary Barnett agreed that it is a challenging time to be an IT managers as their role changes. "They have to stop hugging the servers and start hugging the business people," he said. "IT managers have to understand how their role has changed."
The best analogy, he thought, was with the sherpa. "IT managers are sherpas. The sherpas do all the work while others take all the credit. That is how it is and that is how it is for IT people they know that when they deliver a smart new application others will line up to take credit for it, it is just one of those things."
As Gartner points out a new group of vendors — including Apple, Amazon and Google — "has grown from a strong consumer-focused heritage and is appearing in the vendor ecosystem of many enterprises". Along with these vendors, there are also new niche, agile and innovative suppliers that are small and unvetted — usually privately held entities that may have been in business for only five years or less. As the analysts point out, many of these vendors will have attractive offers but at the same time they will create great challenges, not least the fact that some of them will not be around for long.
Experienced IT managers know all about this of course because they will have seen the cycle of new vendors coming and going before — perhaps many times. But the key awareness of both the risks and the opportunities and the better that awareness is the better an organisations chances of success. Gartner’s IT Financial, Procurement and Asset Management Summit will be held on the 17-18 September in London.