Supplier Management

This is an excerpt, you will find more detailed descriptions in the book.

Supplier Management is the process which defines, negotiates with, measures and evaluates the suppliers that are involved in delivering IT services.


The purpose of Supplier Management is to create an integrated delivery of IT services for the business, and also to provide a channel for cooperation between the IT organization and its suppliers.

Activities to achieve the purpose of Supplier Management are:

  • Negotiate and sign contracts with suppliers
  • Administer contracts with suppliers
  • Ensure that the value of the service is higher than the cost
  • Ensure that contracts with suppliers accord with the services delivered to the business
  • Manage relations with suppliers
  • Create and administer a policy for suppliers


Supplier Management comprises all suppliers and contracts needed to ensure delivery of IT services to the business. The more the supplier delivers, the more resources the IT organization must allocate to manage the supplier. With outsourced environments, the supplier should also be involved in the strategic questions. For smaller suppliers, a purely operational collaboration is sufficient.

Supplier Management includes:

  • Developing and establishing a policy
  • Administering supplier and contract databases
  • Categorizing suppliers including risk analysis
  • Evaluating contracts and suppliers on an ongoing basis
  • Drawing up, negotiating and signing contracts with suppliers
  • Revising, renewing and terminating contracts


Supplier Management consists of two parts, signing new contracts and administering existing ones.

The following activities are performed in connection with new contracts:

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