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Chapter 5 ■ Service Design<br />

Traditionally organizations have called this process vendor management, as it<br />

is mainly involved in procuring products. But now there are a lot of services that are<br />

obtained through suppliers such as phone connectivity, leased lines, software as a service<br />

(SaaS), and IT professionals.<br />

5.7.4.1 Types of Suppliers<br />

Not all suppliers fall into the same category, and each is as important as another. Every<br />

supplier plays his part in the delivery of IT services, and it is key for the service provider<br />

to identify the types of suppliers and prioritize their importance in a workable fashion. In<br />

other words, some suppliers may have a seat at the table during management meetings<br />

and some don’t. Who makes it or misses out depends on the supplier’s type.<br />

It works the other way as well. A service provider may spend more time with key<br />

suppliers over others. ITIL re<strong>com</strong>mends that the supplier management process spend<br />

more time with key suppliers as their deliveries have the most impact to the delivery of IT<br />

services, and any misalignment will lead to breaches and penalties.<br />

The value and importance of suppliers is best explained through Figure 5-10. The x<br />

axis indicates risk and impact and the y axis shows the value and importance of suppliers.<br />

In this simple matrix, there are four types of suppliers based on the risk, impact, value,<br />

and importance:<br />

1. Strategic suppliers<br />

2. Tactical suppliers<br />

3. Operational suppliers<br />

4. Commodity suppliers<br />

High<br />

Strategic<br />

suppliers<br />

Value and importance<br />

Medium<br />

Operational<br />

suppliers<br />

Tactical<br />

suppliers<br />

Low<br />

Commodity<br />

suppliers<br />

Operational<br />

suppliers<br />

Figure 5-10. Types of suppliers<br />

Low Medium High<br />

Risk and impact<br />

90

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