segmenting roles and responsibilities within the it vendor ...

11111 IT PROJECT SUPPORT DESKwww.executiveboard.com January 2006IssueBriefSEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE ITVENDOR MANAGEMENT OFFICECONTENTSOccasion for Inquiry(Page 1)Key Findings(Page 1)Staffing the VMO(Page 2)Summary of Results(Page 3)Company Profiles(Pages 4-12)OCCASION FOR INQUIRYTo leverage cost savings, many leading companies have diversified their IT outsourcingportfolios. The expansion of multi-sourcing strategies requires focused initiatives tomanage contract negotiations and vendor performance. While some IT organizationslocate this responsibility in the corporate sourcing function, many organizations havecreated IT vendor management offices (VMOs) to oversee IT-specific outsourcing andvendors . 1TRENDS IN IT MULTI-SOURCINGHow many vendors does your IT organization manage?Survey of 130 CIO’sOne Vendor22%Three or More Vendors36%Two Vendors36%Source: Susannah Patton, “Multiple Choice Answers,” www.cio.com, 1 May, 2005.At many organizations, vendor management strategies have not kept pace with the growthof multi-sourcing. In a 2004 survey of 130 CIOs, 42 percent expressed discontent withexisting IT outsourcing relationships. Experts predict that although multi-sourcing willremain the dominant sourcing model, fewer than 30 percent of enterprises will have formalsourcing strategies and appropriate governance in place by 2007. 2 Discontent with vendorrelationships has increased many IT executives’ interest in creating vendor managementoffices within the IT organization. VMOs track vendor performance metrics to gainleverage in contract negotiations and secure the best quality service from vendors.(pseudonym)Appendix A: Sample JobDescriptions(Page 13)To assist members who are evaluating or restructuring a vendor management office, the ITProject Support Desk presents the following profiles of companies that have deployedefficient, high-value VMOs. Information contained in this brief is based on interviewswith IT executives at profiled companies.KEY FINDINGSTo implement a successful VMO, leading companies consider the following tactics:• Parse responsibilities between IT functional team and contract negotiationteam: IT Directors and project managers often know the appropriate technologyneeded for specific projects. A VMO should either internalize this knowledgethrough staff recruitment or decentralize by allowing these functional experts toassist in drafting RFP’s and negotiating contracts.• Align VMO with the larger organizational structure: Large organizationswith complex operations may benefit from a more decentralized VMO that allowsfor more input from project managers.• Track vendor performance with metrics: Companies use databases and tools totrack feedback and communicate development areas to suppliers.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 2January 2006STAFFING THE VENDOR MANAGEMENT OFFICEVMOs vary widely in size and organizational structure depending on the complexity of the vendor portfolio. Someoffices consist of dozens of employees in one location, while others exist as decentralized “virtual offices” directedthrough vendor management applications. The companies profiled in this study exhibit diverse VMO organizationalstructures. Regardless of structure, most VMOs fulfill the same core responsibilities: negotiate contracts, managevendor relationships, and monitor vendor performance. The typical VMO leverages the following roles: 3ARCHETYPAL ROLES WITHIN THE VMODirector of VMOVMO Directors develop and implement a model to evaluate, select, and manage vendors. In addition todefining contract and management guidelines, directors set budgetary parameters and act as the final arbiter ofservice level disputes. The typical VMO requires a director to collaborate with financial, legal, and technicalteams. Consequently, leading companies staff the director position with a senior executive who has therequisite strategic oversight to manage groups with myriad skill sets.Vendor ManagerVendor Managers report to the director and implement the strategic vision of the VMO. Managersengage vendors in negotiations and leverage Service Level Agreements (SLAs) to improve qualityand cost effectiveness of vendor services. Managers often develop expertise in a particular ITFunctional domain, including software, infrastructure, or telecommunications. For the position ofVendor Manager, companies may leverage internal staff with specific domain knowledge or hireformer vendor staff members.Performance AnalystPerformance Analysts monitor vendor performance and provide metrics to supportthe vendor manager in renegotiating contracts and service level management.Performance Analysts analyze complex data sets to gauge service levels anddetermine root causes of underperformance.Contract SpecialistContract Specialists support the manager in negotiation and contract management,and often work closely with the corporate legal team. Contract Specialists analyzeand audit complex contracts, monitor key contracts, and manage contract disputes.For the position of Contract Specialist, companies seek out employees with stronglegal and negotiation skills, and the ability to leverage vendor performance data innegotiations.Financial AnalystFinancial Analysts support the vendor manager in determining the vendor’sfinancial viability. Analysts standardize ordering and billing procedures, analyzevendor spend data, and audit vendor work. For the position of Financial Analyst,companies leverage employees with strong quantitative skills and the ability todraw business implications from spend data.Note: Please see Appendix A, pages 13-16 for sample job descriptions of the positions above.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 3January 2006SUMMARY OF RESULTSCompany Capsule VMO Structure VMO Key RolesYum! Brands, Inc., is the second largestfast-food franchise in the world with over $9billion in 2004 revenues.Page 4McDonald’s Corporation, is the world’slargest fast-food corporation by sales, withover $19 billion in 2004 revenues.Page 7(pseudonym)Beta Co. is a leading provider of diversifiedfinancial services, with over $17 billion in2004 revenues.Page 10Nordea Bank AB is a leader inScandinavian banking with over $14 billionin 2004 revenues.Page 12Yum! Brands, Inc. has establisheda centralized VMO withContract/Vendor Managers (CVM)facilitating the life cycle of alltechnology contracts . Each CVMfocuses on specific functional areaswithin the organization to leadnegotiation efforts, monitor theperformance of the vendorthroughout the contract term,manage compliance items, andconduct vendor reviews.McDonald’s Corporation segmentsvendor management into fourresponsibilities: ContractManagement, FinancialManagement, PerformanceManagement, and RelationshipManagement.Beta Co. established a highlydecentralized, “virtual” VMO. A“relationship owner” databaseallows the VMO director toflexibly manage a large number ofrelationship owners.Nordea’s Group Support andProcurement organizationmaintains a regionalized structure.Strategy and policy setting arecoordinated at the central levelwhile vendor relationship andperformance management aredivided among each mainoperating region.All of the CVMs report directly tothe Director of Procurement andVendor Management and aresupported by a Legal Support staffcomprised of paralegals andattorneys. This focused structureallows the CVM’s to understandthe client’s business and tailor theestablished methodology to supportthat client’s business.One senior director oversees acontract manager and financialmanager, among other functions.Another senior director overseesthree performance managers,among other functions. Finally,five full time employees embeddedwithin the architecture groupprovide relationship managementto key client areas. Together, theseemployees provide methodologyand best practices in vendormanagement across the companies.The VMO director oversees 40relationship owners embeddedwithin IS. The director alsooversees an associate director andcontract specialist who managecontract negotiations for selectedvendors. Beta Co.’s decentralizedVMO allows the director todetermine on a case by case basiswhether the technical expertise ofrelationship owners supersedes thenegotiating expertise of theassociate director and contractspecialist.The head of group support andprocurement along with a sourcingunit provides strategic guidanceand sourcing policies. A generalprocurement unit coordinatesregional units and ensuresenterprise wide implementation ofstrategy. A separate procurementprojects unit administers specialprojects across the regions,including IT procurement and e-procurement.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 4January 2006PRACTICE PROFILE: YUM! BRANDSYum! Brands, Inc. runs a centralized VMO to provide services to the organization forall technology related contracts. The company assigns Contract/Vendor Managers tospecific organizational groups to manage RFP requirements definition, vendor selection,contract negotiation, and vendor performance.Company CapsuleIndustry: Retail Food Service2004 Sales: $5-10 billion2004 Employees: over 50,0001. How has your company segregated roles and responsibilities within the VMO?The VMO includes the Director of Procurement and Vendor Management, fiveContract/Vendor Managers (CVM), two paralegals and one contract administrator. TheVMO assigns CVM support to each branch of the IT organization, following theorganizational structure:1) Field Systems2) Infrastructure (Network Infrastructure, Enterprise Architecture, Data Center,Telecommunications)3) Corporate Systems4) Project Management Office5) InternationalThe CVMs focus on contract negotiation, vendor relationship management, and vendorperformance, monitoring any contract with a technology component. During negotiations,each CVM oversees a dedicated functional team of business unit end users with thenecessary technological expertise for the project. The CVM leads this cross functionalteam in creating an RFP, identifying optimal vendor candidates, hosting vendorconferences, and developing vendor relationships. This functional team, in conjunctionwith the CVM, guides the vendor selection process until the final contracting phase.The core negotiation team, comprised of the client sponsor, the CVM, and a paralegal,fully engage the vendors in final negotiations, collaborating with the Legal and Financedepartments to negotiate optimal service level agreements.Having generated a contract, the CVM then maintains vendor and contract information ina database to measure vendor performance, track contracts renewals, and managecompliance issues.2. What is the reporting structure of your VMO?The VMO directly reports to the Yum! Brands Project Management Office (PMO). AllContract/Vendor Managers report to the Director of Procurement and VendorManagement. The team is supported by two Paralegals and one Contract Adminstratorwho perform the intitial legal review and then engage the attorneys, as needed. TheFinance department interfaces with the team on projects meeting specified criteria.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 5January 2006VMO REPORTING STRUCTURE - YUM! BRANDS, INC.CIOPMOFinanceDepartmentDirector, Procurement andVendor MgmtProvides strategic guidanceDefines contract standardsCollaborates with legal teamLegalDepartmentContract/VendorManagerField SystemsContract/VendorManagerCorporate SystemsContract/VendorManagerInfrastructure(Network & Architecture)PMO and InternationalContract/VendorManagerInfrastructure(Data Center)Contract/VendorManagerInfrastructure(Telecommunications)Sr. ParalegalParalegalContractAdministratorSource: Yum! Brands, Inc.3. How do you demonstrate the value of the VMO to the whole organization?The VMO demonstrates value by leveraging consistent vendor management processesand risk assesment for the organization. The processes are stringent enough to protect theorganization, while flexible enough to meet the needs of particular deals .The VMO also increases the efficacy and responsiveness of the negotiation and renewalprocesses. With a separate CVM to oversee contract negotiations, the IT team fosters amore positive relationship with vendors. The VMO reduces contract risk through tightlymanaged negotiations. Futhermore, the VMO positively affects the organization bytracking contract renewals and leveraging performance metrics to renegotiate contracts .In particular, the VMO secures damages and credits when vendors fail to meetperformance goals outlined in service level agreements. To demonstrate value tobusiness, the VMO tracks savings and cost avoidance quarterly and reports them annually.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 6January 2006GOOD COP, BAD COP VENDOR MANAGEMENT“The vendor management office allows the IT functional team to maintain a positive relationship withvendors, while the contract manager side handles vendor deficiencies. The team uses thisdichotomy to manage vendors to maximize the vendor relationship.”- Vice President of Global Infrastructure, Yum! BrandsYum! Brands, Inc.’s CVMs have both the technical expertise to define contractrequirements and the business expertise to negotiate optimal contracts. Overall, the ITstaff fosters positive relationships with vendors by transferring ownership of negotiationto the CVM ’s.Source: Research Interviews, IT Project Support Desk, Yum! Brands, Inc., October 2005.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 7January 2006PRACTICE PROFILE: MCDONALD’S CORPORATIONMcDonald’s Corporation has a VMO that provides policy and governance for vendormanagement to line managers, while line managers handle the functional details of thecompany’s primary outsourcing relationship with ACS.1. How has your company segmented roles and responsibilities within the VMO?Company CapsuleIndustry: Retail Food Services2004 Sales: over $19 billion2004 Employees: 438,000McDonald’s constructed a VMO organizational model proposed by outsourcingconsultant TPI, dividing responsibilities into four areas:1) Contract Management – Coordinates contract negotiation administration2) Relationship Management – Ensures stakeholder satisfaction3) Performance Management – Ensures compliance with contract service levelsand defines new services4) Financial Management – Validates and manages payments to the supplier,chargeback to the clients and performs due diligence on new services pricingMost VMO employees work primarily in performance management, which divides intothree functional areas: mainframe and server, network, and end-user computing. Theperformance management team works closely with the primary IT supplier, ACS, toensure service level delivery. In addition, the VMO assigns one full time employee tocontract management, five employees to relationship management, and one employee tofinancial management.The VMO provides the methodologies and guidance to manage all other technologyvendors , while daily vendor management resides with line managers. Specifically, theVMO offers negotiation skills to build vendor contracts and provides dashboards andmetrics to assess vendor performance while ensuring that line managers regularly engagevendors in performance reviews.VMO PROVIDES BEST PRACTICES“The VMO advises on best practices and supplier management. While the methodology componentresides with the VMO, the execution of supplier management or vendor management is notcentralized; this responsibility resides with the line managers. We use the same approach tomanaging other technology suppliers we use to manage our infrastructure outsourcing supplier.”2. What is the reporting structure of your VMO?- Senior Director, Global Technology SourcingMcDonald’s CorporationThe primary VMO responsibilities, contract negotiation and performance management,divide into two reporting branches, both of which report directly to the Chief TechnologyOfficer.The first branch, led by the Senior Director of Global Technology Sourcing, handlescontract pricing and negotiations for the technology outsourcing relationship. A globaltechnology procurement team, supported by one full-time contract specialist, report intothe Senior Director. A finance team and finance manager indirectly report to the SeniorDirector, and report directly into the CFO organization.The second branch, led by the Senior Director of IS Shared Services Delivery, overseesvendor performance management. The Senior Director is supported by service deliverymanagers for three functional areas: mainframe and server, network, and end-usercomputing. In addition, corporate information assurance reports into this area.A third reporting branch, Architecture and Standards, houses full time vendorrelationship managers for five major client areas.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 8January 2006VMO Reporting Structure - McDonald’s CorporationCIOCTOSr. Director, EnterpriseInfrastructure SharedServices(outsourcing functionsonly)Architecture and StandardsSr. Director, InfrastructureShared ServicesDelivery Management(outsourcing functionsonly)Performance ManagementSr. Director, GlobalTechnology Sourcing(outsourcing functionsonly)Pricing and NegotiationArchitecture andStandards Managers(3)Service DeliveryManagerMainframe and ServerGlobal TechnologyProcurement TeamRelationship Managers(5)RelationshipManagementService DeliveryManagerNetworkService DeliveryManagers (2)End-User ComputingOutsource ContractAdministratorContract ManagementSupplier PerformanceManagementMethodologyI/S FinancialManagement TeamFinance ManagerFinancialManagementSource: McDonald’s Corporation3. How do you monitor vendor performance?The vendor management team employs metrics to assess supplier performance againstquality, time, and financial dashboards. These metrics are reviewed in a series ofmeetings:Weekly –A weekly new services meeting identifies potential misunderstandings betweenthe company and suppliers. These meetings resolve disagreements over whether newservices fall within the scope of base services outlined in the contract.Monthly – In the monthly leadership meeting, a broader performance management teamassesses the health of the vendor relationship. A series of reports present vendor© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 9January 2006performance metrics in a stoplight dashboard, with red, yellow, and green indicatingwhether the vendor is meeting pre-determined service levels .The weekly and monthly teams review standard operational metrics, including help desksatisfaction, help desk answering time, and hardware or software service availability.The metrics are prioritized into two tiers:• Tier One metrics trigger financial penalties when the supplier fails to meetcritical service levels• Tier Two metrics do not hold the supplier liable for financial penalties, but doserve as warning signs for the vendor relationshipAnnual – During annual budgeting exercises, the VMO performs comprehensiveevaluations of the supplier relationship’s business value. In conjunction with servicelevel agreements, the VMO constructs a business case to define the size of thegovernance organization necessary and the size of the budget necessary for variouscomponents of the agreement. Annual reviews assess whether the VMO delivers on thisbase business case each year.Overall, McDonald’s segments VMO positions by responsibility, embedding eachresponsibility into separate reporting branches of the larger IS organization. Theembedded VMO provides best practices in vendor management and allows line managersto execute best practices.Source: Research Interviews, IT Project Support Desk, McDonald’s Corporation, October 2005.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 10January 2006PRACTICE PROFILE: BETA CO.(pseudonym)Company CapsuleIndustry: Financial Services2003 Sales: over $10 billion2003 Employees: under 10,000Beta Co. manages vendors through a highly decentralized “virtual” VMO. Thisdecentralized organization generates minimal VMO staffing requirements and optimalflexibility for the contract negotiation team. This model is applied to both outsourcingvendors and other transaction-oriented vendors.1. How has your company segmented roles and responsibilities within the VMO?Beta Co. divides responsibilities between relationship management and contractnegotiation:Relationship Management – the Director of the VMO identifies and managesrelationship owners for each major vendor and ensures that the owner remains engagedwith the vendor. With the exception those assigned to global partners, relationshipmanagers are not dedicated vendor management staff. For global partners, a dedicatedDirector of Offshore Relationships exists. The relationship owners oversee all aspects ofdaily management. These owners have visibility into services provided and performance.In addition, owners track vendors’ financial stability and potential for acquisition.Beta Co. assigns relationship owners to manage the company’s tier one vendors. Thesevendors represent the largest and fastest growing vendor relationships. Relationshipowners are embedded within relevant business units. The owners’ titles vary withcontract size:• Vice Presidents serve as relationship owners to tier one or strategic vendors• Directors serve as relationship owners to tier two vendors• Deputy Portfolio Directors serve as relationship owners to tier three vendorsContract Negotiation – Typically, relationship owners manage daily operationalinteractions with vendors, while VMO staff manages contract negotiation through directinvolvement and utilization of the company’s corporate sourcing resources . The VMOstaff comprises a director to provide strategic guidance to negotiations, an associatedirector working with corporate procurement to oversee significant negotiations andprovide operational guidance, and a contract specialist who works with the legaldepartment. Together, these employees provide best practices in contract negotiation andallow relationship owners to avoid potentially adversarial interactions with the vendor.Some relationship owners have the specialized technical knowledge necessary tonegotiate optimal agreements. In these cases the VMO cedes control of contractnegotiation to the relationship owner. Overall, the highly decentralized nature of BetaCo.’s VMO allows for maximum flexibility in terms of contract negotiation.FLEXIBLE OWNERSHIP OF CONTRACT NEGOTIATION“If we feel that someone who is embedded in IS will obtain a better deal than we can, then thatperson will take the lead role in negotiations. . . In some cases, the key negotiating edge stemsfrom deep product knowledge.”- Director of IS Financial Management,Beta Co.The VMO maintains a centralized database with all of the relationship owners and thecorresponding vendors. The company is developing a separate tool to track contractterms. The VMO director would like to further consolidate these two informationstreams in a central database and track the frequency of interactions between therelationship owner and the vendor counterpart. Through this tool, the VMO expects totighten oversight without increasing personnel.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 11January 20062. What is the reporting structure of your VMO?As a virtual organization, there is no direct reporting relationship between the Director ofVMO and the relationship owners. The associate director provides the director withstrategic and operational support and serves as the primary interface with corporatesourcing. The contract specialist works with the legal department to provide the directorwith legal expertise.VMO REPORTING STRUCTURE - BETA CO.Director of VMOOversees relationship owners through databaseAligns contract negotiations with strategic andbudgetary parametersCorporateSourcingRelationship Owners40 FTEs MaintainOperational Relationshipswith VendorsAssociate DirectorConducts ContractNegotiationsContract SpecialistReviews Contractswith Law Dept.LawDepartmentSource: Beta Co.3. How do you demonstrate the value of the VMO to the whole organization?The VMO drives value by providing consistency to the vendor management process andleveraging skills from across the organization. In particular, the VMO secures timebefore negotiations to solidify negotiation strategy and determine ownership of theproceedings between corporate sourcing, the associate director or relationship owner.Beta Co. measures the value of the VMO by tracking negotiation successes, includingrationalizing the supply base and utilizing preferred vendors. However, the VMO doesnot systematically quantify benefits. The VMO often creates intangible or qualitativebenefits including increased contract flexibility or reduced risk.The VMO also gauges success through an annual internal satisfaction survey of ISdirectors. The survey asks participants to provide feedback on the VMO’s enterprisevalue. Through the survey, directors assess VMO value by weighing savings, efficiency,contracts, or other intangible benefits and providing qualitative feedback through acomments section.Beta Co.’s virtual VMO allows for flexible ownership of vendor management withminimal VMO staffing. A central database of relationship owners is vital to managing adiffuse VMO.Source: Research Interviews, IT Project Support Desk, Beta Co., October 2005.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE IT VENDOR MANAGEMENT OFFICE PAGE 12January 2006PRACTICE PROFILE: NORDEA BANK AB 4Company CapsuleIndustry: Financial Services2003 Sales: over $14 billion2003 Employees: 29,000Nordea Bank AB runs a regionalized VMO with total spend of €1.2 billion. Fifty-sevenFTE’s support company operations in Denmark, Norway, Sweden, and Finland. Theregionalized VMO enables Nordea Bank to coordinate strategy as country-specific teamsengage vendors and monitor vendor performance.Group Support and ProcurementNordea Bank is a leader in Scandinavian banking, providing retail and corporate banking,asset management, and insurance. After numerous acquisitions, the companyconsolidated operations across the Nordic area under the Nordea Bank brand. Thecompany’s current focus is the integration of the former national Nordic banks and thecreation of a single European company.Nordea’s Group Support and Procurement organization maintains a centralized structureto capture efficiencies and ensure proper coordination. However, while strategy- andpolicy-setting are coordinated at the corporate level, country specific teams maintainownership over consumption management and support supplier relationships and overseeperformance management activities in each of the company’s main operating regions –the only exception is travel spend, which is completely centralized to maximize leverage.VMO REPORTING STRUCTURE – NORDEA BANK ABHead of Group Support andProcurementSourcing UnitSets group policy, conducts project risk assessments,and issues handbook for sourcing best practicesGeneral ProcurementDirects local procurement organizationsCo-located with Accounts PayableProcurement ProjectsAdministers special projects (including e-procurement initatives) across the regionsto ensure effective project managementLocal Procurement/AccountsPayable DenmarkIT ProcurementLocal Procurement/AccountsPayable SwedenProject ManagersLocal Procurement/AccountsPayable NorwayLocal Procurement/AccountsPayable FinlandNordic Travel ManagementSource: Procurement Strategy Council, A Model of Effectiveness, Corporate Executive Board, December 2004.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE VENDOR MANAGEMENT OFFICE PAGE 13January 2006APPENDIX A: SAMPLE JOB DESCRIPTIONSDirector of VMOExpedia is looking for highly talented Director, Vendor Management who is interested in joining our newly formedand growing Project Management Office (PMO). Expedia has always been passionate about technical innovation andwe are now looking for individuals who are equally as passionate about the process of delivering those innovations.This is an amazing opportunity to help build a new division within the world’s largest on-line seller of travel.The Director, Vendor Management has responsibility for developing, implementing and operating the model forresource vendor management. Some global travel will be required.Responsibilities Include:v Working with the technology leadership team, develop sourcing and relationship management strategies.v Develop and maintain a process by which vendors are evaluated, selected and managed in accordancewith established guidelines and best practices (RFI/RFP, Scorecards, Performance Metrics, governance,issue escalation/response processes, etc.)v Manage the process for directing work toward the appropriate onshore or offshore supplier, includingproject evaluation, risk assessment, and managing the input and output to offshore vendor.v Responsible for the actual service levels delivered from suppliers, including associated costs againstcontracted levels of service.v Act as the escalation point for issues relating to supplier performance or deviations from original workestimates, taking action to remedy the issues and managing through to resolution.v Partner with GBTech, IT and other key stakeholders to ensure the appropriate infrastructure andprocesses are in place to support our sourcing model(s).v Responsible for establishing and monitoring the vendor performance against contract terms and SLAs.Conduct periodic vendor reviews/evaluations that consider project-level performance as well as theholistic vendor relationship.v Serve as a primary liaison between Legal, Procurement, project managers and other key stakeholders inthe contract negotiation process. Act a single point of contact for all vendor contract activities.v Work closely with Technology leadership team to develop and deliver continuous improvements to thequality, delivery and support of the Statements of Work, Requirements, internal operating model and theCapability Maturity Model.v Consult with project managers, project teams, GBTech and key stakeholders on the vendor managementprocesses and effective techniques for successfully engaging vendor resources in project activities.Experience and Educational Requirements:v 8+ years experience in technical vendor management for large scale system initiatives and outsourcingpartnerships, including specific experience managing vendors for offshore work.v 6+ years experience managing projects in a complex technical environment.v 4+ years experience building and leading a teamv Track record of high performance and delivery through others.v Excellent interpersonal skills including teamwork, issue resolution, negotiation, and customerrelationship management.v High degree of competency with project management and software development lifecycle best practices.v Demonstrated ability to anticipate, mitigate, and resolve conflicts across workgroups.v Experience in developing and executing plans, meeting deadlines and operating under time constraints.v Proven ability to influence change is criticalv Excellent communication skills, including the ability to present business and technical issues, ideas, andrecommendations clearly in verbal, written and presentation formats.v Bachelors degree in Computer Science, Mathematics, Physical Sciences, Engineering, IT, or related fieldSource: Expedia, www.monster.com.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE VENDOR MANAGEMENT OFFICE PAGE 14January 2006Vendor ManagerConvergys currently seeks a Vendor Management Center of Excellence Manger who will be responsible for overalldomain and contractual expertise during the RFP and imp lementation process. The Vendor Management COEManager will execute the transition from implementation to on-going operations and will also focus on tracking,measuring, reporting, and analyzing of vendor performance.Responsibilities Include:v Vendor Management during RFP processv Leads Vendor Management Tower during client implementationv Act as a domain subject matter expert (Benefits, Payroll, or Recruiting etc.) in vendor contractnegotiationsv Understand the Scope of Services that the vendor providesv Understand Service Levelsv Assist Vendor Leader in creation and implementation of standard global contract databasev Utilize and maintain vendor contract database for on-going contracts and future implementationsv Monitors vendor performance by using measurement, reporting and analysis toolsv Monitors vendor escalation/improvement efforts as neededv Partners with vendors and internal teams to deliver solutions and effect changev Assist Vendor Leader in delivering against all aspects of the Vendor Management ProgramExperience and Educational Requirements:v BS/BA in Business Management, Human Resources or related fieldv Minimum 4 years experience in working with Vendors in a large Shared Services / HR Operationsenvironmentv Knowledge of the HR domains as well as the HR vendors in that space, such as Benefits, Payroll,Recruiting, etc.v Strong analytical, organizational, and communication skills.v Exceptional interpersonal skills and the ability to build strong relationships with vendorsv Strong Excel, PowerPoint, and Word skillsSource: Convergys, www.monster.com.Performance AnalystToys ‘R’ Us currently has a dynamic position available based in our Global Store Support Center in Wayne, NewJersey, for an Analyst in our Vendor Performance Group.The Vendor Performance Analyst is responsible for the development, interpretation and communication of root causeanalysis of opportunities for improvement in the TRU supply chain. The Analyst assists the Vendor PartnershipManager in coordination and execution of cross-functional initiatives that result from the analysis, includingcompliance management, process mapping and alignment, vendor engagement, and project representation.Qualified applicants will possess a BS degree in Logistics/Supply Chain, 3-4 years experience in a supply chaincapacity with a focus on improving supply chain processes. Prior vendor compliance experience a plus – retailindustry focus helpful. Ability to identify root cause supply chain issues and implement change. Knowledgeof spreadsheet and database analysis. Must be able to interpret and analyze large amounts of data and makerecommendations on such. Excellent verbal and written communication skills. Proficient in MS Word, Excel,Access, and Powerpoint.Source: Toys ‘R’ Us, www.monster.com.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE VENDOR MANAGEMENT OFFICE PAGE 15November 2005Financial AnalystA Financial Analyst – Category Spend /National Vendor Programs will provide analytical, accounting, complianceand financial reporting support for the Purchasing Effectiveness Group (PEG) relative to MercerHR national vendorprograms and spend categories (such as Travel, Courier Services, Office Equipment, and Wireless Services).Responsibilities Include:v Obtain and analyze vendor and internal A/P spend data for each category/program, noting the trends andinvestigating and reporting on potential issuesv Prepare standard and ad-hoc reports and memos for internal clients and senior managementv Audit, monitor and report compliance within each category/programv Establish ordering and billing procedures for new vendor programsv Commu nicate category/program announcements and “best practices” throughout MercerHR, and toother Mercer and MMC companiesv Interact with other functions (finance, operations, legal, HR, marketing, IT) at various levels throughoutMercerHRv Assist with special MercerHR and MMC wide projects.Experience and Educational Requirements:v Strong Excel, PowerPoint, and Word skillsv Candidate must posses a finance/accounting related degree from a university/graduate schoolv Two to three years' experience in auditing, internal controls, and financial reporting is a plusv Strong working knowledge of Microsoft Excel, Word, Powerpoint, and Outlookv Knowledge of Access and Hyperion Enterprise is a plusv Excellent communication skills and the ability to effectively communicate to internal clients and seniormanagement through verbal or written communicationsv Strong analytical skills and the ability to interpret financial data while understanding the related businessimplicationsv Ability to manage multiple assignmentsSource: MercerHR, www.monster.com.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE VENDOR MANAGEMENT OFFICE PAGE 16November 2005Contract SpecialistProfit Enhancement Services, a fast-growing business process outsourcer (BPO) focused on telecommunicationsspend management for large enterprises seeks a dynamic and aggressive vendor contract manager. This positiondemands a person who is able to analyze and understand telecom contract compliance and has the ability to advocateaggressively but professionally on behalf of clients.Responsibilities Include:v Work with PES service delivery team to acquire and analyze data related to the creation of vendordisputesv Manage the dispute resolution process from end-to-end including needed escalation proceduresv Interface with subcontractors to schedule project deliverables related to dispute back-upv Serve in a client-facing role to communicate key informationv Analyze and audit complex contracts and assess compliance issues related to bill and adherence togeneral Ts & Csv Monitor key vendor contracts for PES clientsv Project management vendor-related tasksv Negotiate and track the implementation of new contractsExperience and Educational Requirements:v B.S.v Minimum 5 years experience in either purchasing, a role interacting with telecom vendors, or generalcontract management.v Proficient in the use of software tools - MS Office along with web-based ASP systemsv Show tangible experience related to the development of negotiating skillsv Subject-matter expertise in telecom an assetSource: Profit Enhancement Services, www.monster.com.© 2006 Corporate Executive Board. All Rights Reserved.

SEGMENTING ROLES AND RESPONSIBILITIES WITHIN THE VENDOR MANAGEMENT OFFICE PAGE 17November 20051 Susannah Patton, “A New Way to Manage Vendors,” www.cio.com, 1 Feb, 2005.2 Susannah Patton, “Multiple Choice Answers,” www.cio.com, 1 May, 2005.3 Author Unknown, “The Vendor Management,” www.processor.com, 17 June, 2005.4 Procurement Strategy Council, A Model of Effectiveness, Corporate Executive Board, December 2004.Professional Services Note:The Corporate Executive Board has worked to ensure the accuracy of the information it provides to its members. This projectrelies upon data obtained from many sources, however, and the Corporate Executive Board cannot guarantee the accuracy of theinformation or its analysis in all cases. Furthermore, the Corporate Executive Board is not engaged in rendering legal,accounting, or other professional services. Its projects should not be construed as professional advice on any particular set of factsor circumstances. Members requiring such services are advised to consult an appropriate professional. Neither CorporateExecutive Board nor its programs are responsible for any claims or losses that may arise from any errors or omissions in theirreports, whether caused by Corporate Executive Board or its sources.Corporate Executive Board2000 Pennsylvania Ave NWWashington, DC 20006Telephone: 202-777-5000Facsimile: 202-777-5964www.cio.executiveboard.comwww.iec.executiveboard.comwww.aec.executiveboard.comwww.irec.executiveboard.comwww.pmo.executiveboard.comwww.eaec.executiveboard.comwww.dcoc.executiveboard.com© 2006 Corporate Executive Board. All Rights Reserved.