Service Design Supplier Management in ITIL – ITIL Course

Service Design

Supplier Management
Supplier Management  aligns with corporate requirements  and other IT and Service
Management processes.
The purpose  of Supplier  Management  is to obtain value for money from suppliers and ensure suppliersperform according to the contracts and agreements.
Objectives of Supplier Management are:
•   Obtain value for money from supplier and contracts.
•              Ensure that underpinning contracts and agreements with suppliers are aligned to business needs, support, targetsin SLRs and SLAs.
•   Manage relationships with suppliers.
•   Manage supplier performance.
•              Provide assistance in managing,negotiating and agreeingon the contracts with suppliers.
•   Maintain  a supplier  policy  and a supporting  Supplier  and Contract  Database
Supplier Management managesthe contract lifecycle.The contract lifecycle contains integral processes that ensure contracts are maintained and managedproperly.
Processes carried out by SupplierManagement include:
•   Evaluation of new suppliers and contracts.
•   Supplier   categorization   and   maintenance   of  the   Supplier   an Contracts
Database (SCD).
•   Establishing new suppliers and contracts.
•   Supplier and contract management performance.
•   Contract renewal and/or termination.

Many Key Performance  Indicators  (KPIs) canbe used to assess the effectiveness and efficiency  of the Supplier  Management  processes  and activities.  Some of the metrics include:
•   Business protection from poor supplier performance or disruption
•              Alignment  of supporting  services  and  their  targets  with  business  needs  and targets
•   The availability of services is not compromisedby supplier performance
•   Clear ownership and awareness of supplier and contractual issues
The supplier management process should include:
•   Implementation and enforcement of the supplier policy
•   Maintenance of an SCMIS
•   Supplier and contract categorization and risk assessment
•   Supplier and contract evaluation and selection
•   Development, negotiation and agreement of contracts
•   Contract review, renewal and termination
•   Management of suppliersand supplier performance
•              Identification  of improvement  opportunities  forinclusion  in the CSI register, and the implementation of service and supplier improvement plans
•   Maintenance of standard contracts, terms and conditions
•   Management of contractual dispute resolution
•   Management of sub-contracted suppliers
Supplier Categorization
Some form of categorization  scheme should exist within the supplier  management process to categorize the supplier and their importance to the service provider and the servicesprovided to the business.
One of the best methods for categorizing  suppliers  is based on assessing  the risk and impact associated with using the supplier,and the value and importanceof the supplier and its services to the business.
The amountof time and effort spent managing the supplierand the relationship can then be appropriate to its categorization.

The responsibilities of a Supplier Managerinclude:
•   The achievement of the process goals.
•   Assistance for SLAs, contractsand agreements.
•   Value for money is obtained from all IT suppliers.
•   Consistency of all IT supplier processes.
•   All suppliers and contracts are reviewed and risk-assessed on a regular basis.
More details on the responsibilities of a SupplierManager:
•              Assist   in   developing   an reviewing   SLAs contracts,   agreements   and documentations.
•   Ensure value for money is obtained.
•   Ensure all IT supplier processes are consistent.
•   Maintain and review Supplier and Contracts database (SCD).
•   Review and risk assessment of all suppliers and contracts.
•   Ensure underpinningcontracts, agreements and SLAs align with the business.
•   Ensure all supporting services are scoped and documented.
•   Ensure all roles and relationships documentedand maintained.
•   Review contracts and SLAs.
•   Update   contracts   or   SLA when   required   and   proceed   with   Change
•   Monitor, report and review supplier performance.
•   Ensure changes are assessed.
•   Coordinate and support all individual IT supplier and contract managers.

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