A recent article over on SIG on How to Build A World Class Vendor Management Organization noted that the most important element of success was execution. Execution that involves the:

• identification and allocation of appropriate resources (people)
• identification and implementation of enabling technology
• development of policies in collaboration with key stakeholders
• documentation of processes and workflows for key programs
• application of segmentation strategy to align resources
• pilot strategy and program that supports Business Units and Suppliers
• testing, refinement, and redesign of processes as required
• communication, communication, and communication

This is all good, and everything that should be done in the establishment of a Vendor Management Organization, but an organization would do the exact same if it was establishing a Global Procurement Organization. Or if was establishing a Shared Services Organization. Or if was establishing a Consulting Services Organization. No matter what organization is being established, it will not be successful without:

• people who know what they are doing
• technology to support them
• policies to guide them
• processes to enable them
• strategies to make the best use of resources available
• support from affected Business Units (which is won through incremental wins)
• adaptability to changing circumstances and
• constant communication

In other words, the article contained good advice, but nothing specific to VMOs.

So what is the real key to a good VMO?

A focus on the vendor. It may take different forms, but the vendor, and its success, should come first as vendor success enables organizational success.