More Benefit to Come

Although enterprises that have a formal vendor management group clearly gain both monetary and strategic advantages, IDC's Pucciarelli believes there's still more value to be had - from better management tools. "The biggest procurement analysis infrastructure in IT is Excel," he says. Some useful technologies in place for supply chain management are now being adopted for IT vendor management, Pucciarelli says. He expects more offerings in the next five years.

But technology can only support your people and process, he adds. "You need a team that steps back and understands the business value," concurs consultant Hurwitz.

Why haven't more enterprises formalized their vendor management practices? Some fear that top-down control will lead to excesses, such as confusing initial price savings with long-term value, says Forrester's Cecere. And some companies are too small or have too few vendors to need more than a CIO's focus on the issue, he says.

Others don't see vendors as entities to manage strategically, says Achievo's Mathaisel: "If you want a master/slave relationship with your vendor, this is a waste of time." The remaining enterprises should reconsider their opposition to the idea of formal vendor management, he says; "it is very much worth the effort".