Does your organisation follow ITIL Supplier Management best practice?

The aim of the Supplier Management process within ITIL® (as detailed in the Service Design manual) is to ensure that:

  • The organisation obtains value for money from suppliers and contracts.
  • Contracts with suppliers are fully aligned with the organisation’s needs.
  • All contracts support and are aligned with targets in supplier level requirements (SLRs) and service level agreements (SLAs), and are to be managed in conjunction with Service Level Management.
  • Supplier relationships are managed.
  • Supplier contracts are correctly negotiated and managed through the entire contract lifecycle.
  • The organisation has a supplier policy and a supporting supplier and contract management information system (SCMIS).

But how many organisations can really say they have a coherent process for supplier management? Not very many, I believe, particularly among small to medium-sized organisations. In my experience, it is only when organisations start to mature and grow above 70 to 80 people that they really start to consider the benefits a coherent supplier management process can bring.

Many processes for supplier management in smaller organisations tend to be informal and undocumented, in my experience. I doubt that many of these organisations have even considered the benefits that a formal process for managing suppliers and contracts can bring, let alone started with such basics as categorising suppliers or creating a supplier policy.

I must admit that, prior to working at IT Governance, and having been an IT manager, I hadn’t considered many of the benefits that adopting supplier management best practice could bring. It’s only now, when I understand the benefits, that I can see the real value.

Are you employing ITIL Supplier Management best practice within your organisation? Has your organisation attempted to employ Supplier Management best practice and failed? What are your experiences? Do you find the guidance in Service Design confusing?

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  1. Howard Smith 14th January 2015