Over the past few years, many companies have taken the first steps in setting up an IT Vendor \n\nManagement Office (VMO), but many are still very much in the early stages of refining what exactly the role of the VMO is within the organization. \n\nAnd the definition of a VMO can vary widely across companies \u2014 ranging from a broad marketing term used to describe the process or a \n\nspecific term used to refer to a dedicated group of staff who oversee and manage suppliers.The Vendor Management BibleThe scope of the dedicated team's responsibilities also varies. In organizations where sourcing and purchasing teams are not actively involved \n\nthroughout the life cycle or where there is a low level of process maturity, the VMO can take on a more holistic role. The VMO's responsibilities can \n\nspan from RFP creation, vendor evaluation, negotiation, contract management, vendor relationship, to ongoing performance management. When this is the case, Forrester's research has found that the VMO does not necessarily own the pre-contract steps but is a driving force behind \n\npromoting best practices, providing contract and negotiation templates, facilitating communication, and helping define the vendor key performance \n\nmetrics. This is becoming particularly prevalent as companies realize it's nearly impossible to govern vendors effectively if they haven't included the \n\nappropriate terms and requirements into the selection and contracting \u2014 pushing VMOs to participate actively in these steps early on. CIOs and other sourcing professionals charged with measuring the efficacy of their companies VMO offices should do the following: \u2022 Provide guidance during the RFP creation project. One of the most important services a VMO can provide is high-quality guidance \n\nduring RFP creation. By getting involved early on, the VMO can not only provide templates and best practices but also help bridge the requirements \n\nsilos between multiple business units. Look to gather stakeholder feedback specifically on how well the VMO helps ensure consistency and \n\ntransparency throughout the process, performs vendor risk assessment, brings industry research to bear to identify competitive candidates, identifies \n\nexisting vendor relationship to leverage \u2014 all while not adding unnecessary cycle time to the sourcing event.\u2022 Develop a more structured approach to negotiations. Companies that might have previously treated vendor negotiations as more of \n\nan art than a science are starting to appreciate the value a formal negotiation methodology can bring. And many of these companies are looking to the \n\nVMO for help. Have stakeholders assess how well the VMO enables a more formalized negotiation approach, leverages existing performance metrics \n\nfor renegotiations, collaborates across finance and legal to put the right set of SLAs in place, and ultimately realizes vendor concessions that would not \n\notherwise have been achieved. \u2022 Help put better contracts in place. VMOs can also play a significant role in contract review and ongoing management. Initially, the \n\nVMO should be a source of templates that have been vetted and are written in favor of your company. Survey stakeholders on how effective but also \n\nflexible these contract templates are, as well as the VMO's contract review methodology itself. Once the contract is in place, look to gather feedback on \n\nhow well the VMO is effectively monitoring key contracts for compliance issues and resolving conflicts with the vendors \u2014 again, while not \n\nadding unnecessary cycle time to the contract review and management process.\u2022 Regularly evaluate relationship and performance management. By having a VMO own the negotiation and contract management \n\nprocess, business managers can report that their day-to-day working relationships with the vendors improves. Look to measure your own business \n\nleaders' perspectives on this, as well as how effective the VMO is on reporting potential performance issues in a consistent and transparent way, \n\nresponding quickly to vendor questions, and ultimately driving out higher quality at a lower cost from suppliers. VMOs should also be measured on how \n\nwell they improve key vendor relationships with initiatives like vendor recognition programs. \u2022 Solicit feedback on VMO performance. To better understand stakeholder perception and actively solicit feedback during and after \n\neach sourcing event, Forrester recently assembled a 40-question survey \n\n(registration required) to measure the level of internal user satisfaction. Companies can use the entire survey if the VMO is involved throughout the \n\nsourcing life cycle or scale it back to include only post-contract activities as needed. Similarly, this survey can be used to gauge the performance of a \n\nbroader sourcing group that has responsibility for the full life cycle. The key is the set of responsibilities, not the title of the group. In the early stages of \n\nVMO development look to roll out frequent feedback surveys and interviews. As the VMO matures, quarterly or even yearly should be sufficient. Patrick Connaughton is a Senior Analyst at Forrester Research, where he serves Sourcing & Vendor Management professionals. To \n\ndownload a copy of the survey mentioned above, please visit www.forrester.com\/ciovmosurvey.