1.650.322.02302009 MSVP vendor summit
Last week, Waverley attended it’s second MSVP vendor summit at the Microsoft campus in Redmond. Like almost everyone else, Microsoft is working hard to manage and reduce costs more effectively and get the most out of the dollars they spend on their vendors. Comparing what’s going on at Microsoft to some other large companies we work with, we see some trends.
Providing services to large companies is going to require more effort on the part of both the procurement departments, the consumers of the services provided and the vendors they work with. Procurement processes will face increased standards and solutions will need to be scalable across groups when possible. In order to control costs, large buyers are centralizing procurement functions and instituting policies regarding RFP’s and PO’s that help ensure buyers are getting more for their money. Governance will be more important than ever. I expect all vendors will have to provide more information to justify costs, work to creatively address the needs of their customers and actively drive their customers to find new ways of doing more with less. Buying in bulk will become more common and those vendors that can be flexible and scale have an advantage. Operational excellence has been and continues to be critical to the success of the vendor/buyer relationship. I expect the buyers of services to work harder to learn from their vendors and not just buy bodies to fix problems. I also expect more limited strategic vendor relationships. Standing still has never been a path to success and will be even less likely to work in this economic environment. Competition is going to drive relationships to be more effective and productive and the innovation that results should improve our mutual interests. We’ve always worked hard to have the best people, management and process and I think that effort should pay off for everyone.
