Select a Security Outsourcing Partner

Outsource the right functions to secure your business.

Analyst Perspective

Understanding your security needs and remaining accountable is the key to selecting the right partner.

The need for specialized security services is fast becoming a necessity to most organizations. However, resource challenges will always mean that organizations will still have to take practical measures to ensure that the time, quality, and service that they require from outsourcing partners have been carefully crafted and packaged to elicit the right services that cover all their needs and requirements.

Organizations must ensure that security partners are aligned not only with their needs and requirements, but also with the corporate culture. Rather than introducing hindrances to daily operations, security partners must support business goals and protect the organization’s interests at all times.

And as always, outsource only your responsibilities and do not outsource your accountability, as that will cost you in the long run.

Danny Hammond
Research Analyst
Security, Risk, Privacy & Compliance Practice
Info-Tech Research Group

Executive Summary

Info-Tech Insight

Mitigate security risks by developing an end-to-end process that ensures you are outsourcing your responsibilities and not your accountability.

Your Challenge

This research is designed to help organizations select an effective security outsourcing partner.

• A security outsourcing partner is a third-party service provider that offers security services on a contractual basis depending on client needs and requirements.
• An effective outsourcing partner can help an organization improve its security posture by providing access to more specialized security experts, tools, and technologies.
• One of the main challenges with selecting a security outsourcing partner is finding a partner that is a good fit for the organization's unique security needs and requirements.
• Security outsourcing partners typically have access to sensitive information and systems, so proper controls and safeguards must be in place to protect all sensitive assets.
• Without careful evaluation and due diligence to ensure that the partner is a good fit for the organization's security needs and requirements, it can be challenging to select an outsourcing partner.

Outsourcing is effective, but only if done right

• 83% of decision makers with in-house cybersecurity teams are considering outsourcing to an MSP (Syntax, 2021).
• 77% of IT leaders said cyberattacks were more frequent (Syntax, 2021).
• 51% of businesses suffered a data breach caused by a third party (Ponemon, 2021).

Common Obstacles

The problem with selecting an outsourcing partner isn’t a lack of qualified partners, it’s the lack of clarity about an organization's specific security needs.

• Most organizations do not have a clear understanding of their current security posture, their security goals, and the specific security services they require. Without a clear understanding of their needs, organizations may struggle to identify a partner that can meet their requirements.
• Breakdowns and lack of communication can be a significant obstacle, especially when clear lines of communication with partners, including regular check-ins, reporting, and incident response protocols, have not been clearly established.
• Ensuring that security partner's systems and processes integrate seamlessly with existing systems can be a challenge for most organizations. This is in addition to making sure that security partners have the necessary access and permissions to perform their services effectively.
• Adhering to security policies is rarely a priority to users, as compliance often feels like an interference to daily workflow. For a lot of organizations, security policies are not having the desired effect.

Source: IBM, 2022 Cost of a Data Breach; N=537.

Info-Tech’s methodology for selecting a security outsourcing partner

Determine your responsibilities

Determine what responsibilities you can outsource to a service partner. Analyze which responsibilities you should outsource versus keep in-house? Do you require a service partner based on identified responsibilities?

Scope your requirements

Refine the list of role-based requirements, variables, and features you will require. Use a well-known list of critical security controls as a framework to determine these activities and send out RFPs to pick the best candidate for your organization.

Manage your outsourcing program

Adopt a program to manage your third-party service security outsourcing. Trust your managed security service providers (MSSP) but verify their results to ensure you get the service level you were promised.

Select a Security Outsourcing Partner

Blueprint benefits

Insight summary

Overarching insight: You can outsource your responsibilities but not your accountability.

Determine what to outsource: Assess your responsibilities to determine which ones you can outsource. It is vital that an understanding of how outsourcing will affect the organization, and what cost savings, if any, to expect from outsourcing is clear in order to generate a list of responsibilities that can/should be outsourced.

Select the right partner: Create a list of variables to evaluate the MSSPs and determine which features are important to you. Evaluate all potential MSSPs and determine which one is right for your organization

Manage your MSSP: Align the MSSP to your organization. Adopt a program to monitor the MSSP which includes a long-term strategy to manage the MSSP.

Identifying security needs and requirements = Effective outsourcing program: Understanding your own security needs and requirements is key. Ensure your RFP covers the entire scope of your requirements; work with your identified partner on updates and adaptation, where necessary; and always monitor alignment to business objectives.

Measure the value of this blueprint

After each Info-Tech experience, we ask our members to quantify the real-time savings, monetary impact, and project improvements our research helped them achieve.

Overall Impact: 8.9 /10

Overall Average Cost Saved: $22,950

Overall Average Days Saved: 9

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit
"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful."

Guided Implementation
"Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track."

Workshop
"We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."

Consulting
"Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project."

Diagnostics and consistent frameworks are used throughout all four options.

Elevate Your Vendor Management Initiative

Transform Your VMI From Tactical to Strategic to Maximize Its Impact and Value

EXECUTIVE BRIEF

Analyst Perspective

Transform your VMI into a strategic contributor to ensure its longevity.

By the time you start using this blueprint, you should have established a solid foundation for your vendor management initiative (VMI) and implemented many or all of the principles outlined in Info-Tech’s blueprint Jump Start Your Vendor Management (the Jump Start blueprint). This blueprint (the Elevate blueprint) is meant to continue the evolutionary or maturation process of your VMI. Many of the items presented here will build on and refer to the elements from the Jump Start blueprint. The goal of the Elevate blueprint is to assist in the migration of your VMI from transactional to strategic. Why? Simply put, the more strategic the VMI, the more value it adds and the more impact it has on the organization as a whole. While the day-to-day, transactional aspect of running a VMI will never go away, getting stuck in transactional mode is a horrible place for the VMI and its team members: The VMI will never live up to its potential. The work won’t be enjoyable or rewarding for most people. The VMI will be seen paper pushers, gatekeepers, and other things that don’t add value or should be avoided. Being reactive (i.e. putting out fires all day) is exhausting and provides little or no control over the work and workflow. Lastly, the VMI’s return on investment will be low, and unless it was established due to regulatory, audit, or other influences, the VMI could be disbanded. Minimal resources will be available to the VMI…just enough to keep it alive and obtain whatever checkmark needs to be earned to satisfy the original need for its creation. To prevent these tragic things from happening, transform the VMI into a strategic contributor and partner internally. This Elevate blueprint provides a roadmap and guidance to get your journey started. Focus on expanding your understanding of customer/vendor dynamics, improving the skills, competencies, and knowledge of the VMI’s team members, contributing value beyond the savings aspect, and building a solid brand internally and with your vendors. This requires a conscious effort and a proactive approach to vendor management…not to mention treating your internal “clients” with respect and providing great customer service. At the end of the day, ask yourself one question: If your internal clients had to pay for your services, would they? If you can answer yes, you are well on your way to being strategic. If not, you still have some work to do. Long live the strategic VMI!

Phil Bode Principal Research Director, Vendor Management Info-Tech Research Group

Executive Summary

Info-Tech Insight

The VMI must continue to mature and evolve, or it will languish, atrophy, and possibly be disbanded.

• A transactional approach to vendor management ignores the multi-faceted dynamics in play and limits the VMI’s potential value.
• Improving the VMI’s impact starts with the VMI’s personnel – their skills, knowledge, competencies, and relationships.
• Adding value to the organization requires time to build trust and understand the landscape (internal and external).

*Source: Information Services Group, Inc., 2022.

Executive Summary

Your Challenge

Spend on managed service providers and as-a-service providers continues to increase. In addition, IT services vendors continue to be active in the mergers and acquisitions arena. This increases the need for a VMI to help with the changing IT vendor landscape.

Source: Information Services Group, Inc., 2022.

Executive Summary

Common Obstacles

When organizations execute, renew, or renegotiate a contract, there is an “expected value” associated with that contract. Without a robust VMI, most of the expected value will never be realized. With a robust VMI, the realized value significantly exceeds the expected value during the contract term.

Source: Based on findings from Geller & Company, 2003.

Executive Summary

Info-Tech’s Approach

A sound, cyclical approach to vendor management will help ensure your VMI meets your needs and stays in alignment with your organization as they both change (i.e. mature and evolve).

Vendor Management Process

1. Plan

• Review and Update Existing Plan Materials

• Vendor Classification Models
• Customer Positioning Model
• 2-Way Scorecards
• Performance Improvement Plan (PIP)
• Relationship Improvement Plan (RIP)
• Vendor-at-a-Glance Reports
• VMI Personnel Competency Evaluation Tool
• Internal Feedback Tool
• VMI ROI Calculation Tools
• Vendor Recognition Program

• Classify Vendors and Identify Customer Position
• Assess the Relationship Landscape
• Leverage 2-Way Scorecards
• Implement PIPs and RIPS
• Gather Market Intelligence
• Generate Vendor-at-a-Glance Reports
• Evaluate VMI Personnel
• Improve Professional Skills
• Expand Professional Knowledge
• Create Brand Awareness
• Survey Internal Clients
• Calculate VMI ROI
• Implement Vendor Recognition Program

• Investigate Potential Alliances
• Continue Increasing the VMI's Strategic Value
• Review and Update Governances

• Outcomes
• Better Allocation of VMI Resources
• Measurable Impact of the VMI
• Increased Awareness of the VMI
• Improved Vendor Performance
• Improved Vendor Relationships
• VMI Team Member Development
• Strategic Relationships Internally

Info-Tech’s Methodology for Elevating Your VMI

Insight Summary

Blueprint Deliverables

The four phases of maturing and evolving your vendor management initiative are supported with configurable tools, templates, and checklists to help you stay aligned internally and achieve your goals.

VMI Tools and Templates

Continue building your foundation for your VMI and configure tools and templates to help you manage your vendor relationships.

Key Deliverables:

Info-Tech’s

1. Elevate – COST Model Vendor Classification Tool
2. Elevate – MVP Model Vendor Classification Tool
3. Elevate – OPEN Model Customer Positioning Tool
4. Elevate – Relationship Assessment and Improvement Plan Tool
5. Elevate – Tools and Templates Compendium

A suite of tools and templates to help you upgrade and evolve your vendor management initiative.

Blueprint benefits

Info-Tech offers various levels of support to best suit your needs

Diagnostics and consistent frameworks used throughout all four options

Guided Implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is between 6 to 12 calls over the course of 3 to 6 months.

Workshop Overview

Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889

Using complementary vendor management blueprints

Jump Start Your VMI and Elevate Your VMI

Phase 1 – Plan

Look to the Future and Update Existing Materials

This phase will walk you through the following activities:

This phase helps the VMI stay focused and aligned by reviewing existing materials, updating the existing maturity assessment, and ensuring that the foundational elements of the VMI are up-to-date. The main outcomes from this phase are a current maturity assessment and updated or revised Plan documents.

This phase involves the following participants:

• VMI team
• Applicable stakeholders and executives
• Procurement/Sourcing
• IT
• Others as needed

Phase 1 – Plan

Phase 1 – Plan revisits the foundational elements from the Info-Tech blueprint Jump Start Your Vendor Management Initiative. As the VMI continues to operate and mature, looking backward periodically provides a new perspective and helps the VMI move forward:

• Has anything changed (mission statement, goals, scope, strengths and obstacles, roles and responsibilities, and process mapping)?
• What progress was made against the maturity assessment?
• What is next in the maturity process for the VMI?
• Were some foundational elements overlooked or not done thoroughly due to time constraints, a lack of knowledge, or other factors?

Keep an eye on the past as you begin looking toward the future.

Step 1.1 – Review and update existing Plan materials

Ensure existing materials are current

At this point, the basic framework for your VMI should be in place. However, now is a good time to correct any oversights in your foundational elements. Have you:

• Drafted a mission statement for the VMI and listed its goals, answering the questions “why does the VMI exist” and “what will it achieve”?
• Determined the VMI’s scope, establishing what is in and outside the purview of the VMI?
• Listed the VMI’s strengths and obstacles, identifying what you can leverage and what needs to be managed to ensure smooth sailing?
• Established roles and responsibilities (OIC Chart) for the vendor management lifecycle, defining each internal party’s place in the process?
• Documented process maps, delineating (at a minimum) what the VMI is doing for each step of the vendor management lifecycle?
• Created a charter, establishing an operational structure for the VMI?
• Completed a vendor inventory, identifying the major vendors included in the VMI?
• Conducted a VMI maturity assessment, establishing a baseline and desired future state to work toward?
• Defined the VMI’s structure, documenting the VMI’s place in the organization, its services, and its clients?

If any of these elements is missing, revisit the Info-Tech blueprint Jump Start Your Vendor Management Initiative to complete these components. If they exist, review them and make any required modifications.

Download the Info-Tech blueprint Jump Start Your Vendor Management Initiative

1.1.1 – Review and update existing Plan materials

1 – 6 Hours

1. Meet with the participants and review existing documents and tools created or configured during Phase 1 of the Info-Tech blueprint Jump Start Your Vendor Management Initiative: mission statement and goals, scope, strengths and obstacles, OIC chart, process maps, charter, vendor inventory, maturity assessment, and structure.
2. Update the documents as needed.
3. Redo the maturity assessment if more than 12 months have passed since the initial assessment was conducted.

Download the Info-Tech blueprint Jump Start Your Vendor Management Initiative

Download the Jump - Phase 1 Tools and Templates Compendium

Phase 2 – Build

Create New Tools and Consider Alternatives to Existing Tools

This phase will walk you through the following activities:

This phase helps you configure, create, and understand the tools and templates used to elevate the VMI. The main outcomes from this phase are a clear understanding of the tools that identify which vendors are important to you, tools and concepts to help you take key vendor relationships to the next level, and tools to help you evaluate and improve the VMI and its personnel.

This phase involves the following participants:

• VMI team
• Applicable stakeholders and executives
• Legal
• Marketing
• Others as needed

Phase 2 – Build

Create and configure tools, templates, and processes

Phase 2 – Build is similar to its counterpart in the Info-Tech blueprint Jump Start Your Vendor Management Initiative; this phase focuses on tools, templates, and concepts that help the VMI increase its strategic value and impact. The items referenced in this phase will require your customization or configuration to integrate them within your organization and culture for maximum effect.

One goal of this phase is to provide new ways of looking at things and alternate approaches. (For example, two methods of classifying your vendors are presented for your consideration.) You don’t live in a one-size-fits-all world, and options allow you (or force you) to evaluate what’s possible rather than running with the herd. As you review this phase, keep in mind that some of the concepts presented may not be applicable in your environment…or it may be that they just aren’t applicable right now. Timing, evolution, and maturity will always be factors in how the VMI operates.

Another goal of this phase is to get you thinking about the value the VMI brings to the organization, and just as important, how to capture and report it. Money alone may be at the forefront of most people’s minds when return on investment is brought up, but there are many ways to measure a VMI’s value and impact. This Phase will help you in your pursuit.

Lastly, a VMI must focus on its internal clients, and that starts with the VMI’s personnel. The VMI is a reflection of its team members – what they do, say, and know will determine how the VMI is perceived…and used.

Step 2.1 – Vendor classification model

Determine which classification model works best for your VMI

The classification model in the Info-Tech blueprint Jump Start Your Vendor Management Initiative is simple and easy to use. It provides satisfactory results for the first one or two years of the VMI’s life. After that, a more sophisticated model should be used, one with more parameters or flexibility to accommodate the VMI’s new maturity.

Two models are presented on the following pages. The first is a variation of the COST model used in the Jump Start Your Vendor Management Initiative blueprint. The second is the MVP model, which segments vendors into three categories instead of four and eliminates the 50/50 allocation constraint inherent in a 2x2 model.

Step 2.1 – Vendor classification model

Configure the COST Vendor Classification Tool

If you used the COST classification model in the Jump Start Your Vendor Management Initiative blueprint, you are familiar with its framework: vendors are plotted into a 2x2 matrix based on their spend and switching costs and their value to your operation. The simple variation of this model uses three variables to assess the vendor’s value to your operation and two variables to determine the vendor’s spend and switching cost implications. The COST classification model presented here sticks to the same basic tenets but adds to the number of variables used to plot a vendor’s position within the matrix. Six variables are used to define a vendor’s value and three variables are used to set the spend and switching cost. This provides greater latitude in identifying what makes a vendor important to you.

Step 2.1 – Vendor classification model

Configure the MVP Vendor Classification Tool

Another option for classifying vendors is the MVP classification model. In this model, vendors fall into one of three categories: minor, valued, or principal. Similar to the COST vendor classification model, the MVP classification model requires a user to evaluate statements or questions to assess a vendor’s importance to the organization. In the MVP approach, each question/statement is weighted, and the potential responses to each question/statement are assigned points (100, 33, or 10) based on their impact. Multiplying the weight (expressed as a percentage) for each question/statement by the response points for each question/statement yields a line-item score. The total number of points obtained by a vendor determines its classification category. A vendor receiving a score of 75 or greater would be a principal vendor (similar to a strategic vendor under the COST model); 55 to 74 points would be a valued vendor (similar to operational or tactical vendor); less than 55 points would be a minor vendor (similar to a commodity vendor).

Step 2.1 – Vendor classification model

Which classification model is best?

By now, you may be asking yourself, “Which model should I use? What is the advantage of the MVP model?” Great questions! Both models work well, but the COST model has a limitation inherent in any basic 2x2 model. Since two axes are used in a 2x2 approach, the effective weighting for each axis is 50%. As a result, the weights assigned to an individual element are reduced by 50%. A simple but extreme example will help clarify this issue (hopefully).

Suppose you wanted to use an element such as How integrated with our business processes are the vendor's products/services? and weighted it 100%. Under the 2x2 matrix approach, this element only moves the X-axis score; it has no impact on the Y-axis score. The vendor in this hypothetical could max out the X-axis under the COST model, but additional elements would be needed for the vendor to rise from the tactical quadrant to the strategic quadrant. In the MVP model, if the vendor maxed out the score on that one element (at 100%), the vendor would be at the top of the pyramid and would be a principal vendor.

One model is not necessarily better than the other. Both provide an objective way for you to determine the importance of your vendors. However, if you are using elements that don’t fit neatly into the two axes of the COST model, consider using the MVP model. Play with each and see which one works best in your environment, knowing you can always switch at a later point.

2.1.1 – COST Model Vendor Classification Tool

15 – 45 Minutes

1. Meet with the participants to decide whether you want to use this model or the MVP model (see next page); if you choose this model, configure it for your environment by reviewing Elevate – COST Model Vendor Classification Tool – Tab 2. Set Parameters.
1. Review the questions in column C for each axis (items 1-9), the weights in column D, and the answers/descriptors for each question (columns E, F, G, and H). Make any adjustments necessary to fit your culture, environment, and goals.
2. Using the Jump Start Your Vendor Management blueprint tool Jump - Phase 1 Tools and Templates Compendium – Tab 1.7 Vendor Inventory, sort your vendors by spend; if you used multiple line items for a vendor in the Vendor Inventory Tool, aggregate the spend data for this activity.
3. Adjust the descriptors and values in row 16 (Item 7) to match your actual data. General guidance for establishing the spend ranges is provided in the tool itself.
2. No other modifications should be made to the parameters.

Download the Info-Tech Elevate - COST Model Vendor Classification Tool

2.1.2 – MVP Model Vendor Classification Tool

15 – 45 Minutes

1. Meet with the Participants to decide whether you want to use this model or the COST Model (see previous page); if you choose this model, configure it for your environment by reviewing Elevate – MVP Model Vendor Classification Tool – Tab 2. Set Parameters.
2. Review the questions in column C (Items 1 - 7 ), the answers/descriptors for each question (columns D, E, and F), and the weights in column G. Make any adjustments necessary to fit your culture, environment, and goals.
3. For the answers/descriptors use words and phrases that resonate with your audience and are as intuitive as possible.
4. If you use annualized spend as an element, general guidance for establishing the spend ranges is provided in the tool itself.
5. When assigning a weight value to a question, refrain from going below 5%; weights below this threshold will have minimal to no impact on a vendor's score.

Download the Info-Tech Elevate – MVP Model Vendor Classification Tool

Step 2.2 – Customer positioning model

Identify how the vendors view your organization

Now that you have configured your choice of vendor classification model (or decided to stick with your original model), it’s time to think about the other side of the coin: How do your vendors view your organization. Why is this important? Because the VMI will have only limited success if you are trying to impose your will on your vendors without regard for how they view the relationship from their perspective. For example, if the vendor is one of your strategic (COST Model) or principal (MVP Model) vendors, but you don’t spend much money with them, you are difficult to work with, and there is no opportunity for future growth, you may have a difficult time getting the vendor to show up for BAMs (business alignment meetings), caring about scorecards, or caring about the relationship period. Our experience at Info-Tech interacting with our members through vendor management workshops, guided implementations, and advisory calls has led us to a significant conclusion on this topic: Most customers tend to overvalue their importance to their vendors. To open your eyes about how your vendors actually view your account, use Info-Tech’s OPEN Model Customer Positioning Tool. (It is based on the supplier preferencing model pioneered by Steele & Court in 1996 in which the standard 2x2 matrix tool for procurement [and eventually vendor management] was repurposed to provide insights from the vendor’s perspective.) For our purposes, think of the OPEN model for customer positioning as a mirror’s reflection of the COST model for vendor classification. The OPEN model provides a more objective way to determine your importance to your vendors. Ultimately, your relationship with each vendor will be plotted into the 2x2 grid, and it will indicate whether your account is viewed as an opportunity, preferred, exploitable, or negligible.

*Adapted from Profitable Purchasing Strategies by Paul T. Steele and Brian H. Court

Step 2.3 – Two-way scorecards

Design a two-way feedback loop with your vendors

As with the vendor classification models discussed in Step 2.1, the two-way scorecards presented here are an extension of the scorecard and feedback material from the Jump Start Your Vendor Management Initiative blueprint. The vendor scorecard in this blueprint provides additional flexibility and sophistication for your scorecarding approach by allowing the individual variables (or evidence indicators) within each measurement category to be evaluated and weighted. (The prior version only allowed the evaluation and weighting at the category level.) On the vendor feedback side, the next evolution is to formalize the feedback and document it in its own scorecard format rather than continuing to list questions in the BAM agenda. The vendor feedback template included with this blueprint provides a sample approach to quantifying the vendor’s feedback and tracking the information. The fundamentals of scorecarding remain the same: Keep your eye on what is important to you. Limit the number of measurement categories and evidence indicators to a reasonable and manageable number. Simple is almost always better than complicated.

2.3.1 – Two-way scorecards (vendor scorecard)

15 – 60 Minutes

1. Meet with the participants to configure the scorecard from Elevate – Tools and Templates Compendium – Tab 2.3.1 Vendor Scorecard to meet your needs:
1. Review the measurement categories and criteria and modify as needed.
2. Weight the measurement categories (Column E) according to their relative importance to each other; make sure the total adds up to 100%.
3. Weight the measurement criteria (Column D) within each measurement category according to their relative importance to each other; make sure the total adds up to 100%.
2. As a reminder, the vendor scorecard is for the vendor overall, not for a specific contract.
3. You can create variations of the scorecard based on vendor categories (e.g. hardware, software, cloud, security, telecom), but avoid the temptation of creating vendor-specific scorecards unless the vendor is unique; conversely, you may want to create two or more scorecards for a vendor that crosses categories (one for each category).

Download the Info-Tech Elevate – Tools and Templates Compendium

2.3.2 – Two-way scorecards (vendor feedback form)

15 – 60 Minutes

1. Meet with the participants to configure the feedback form from Elevate – Tools and Templates Compendium – Tab 2.3.2 Vendor Feedback Form to meet your needs:
1. Review the measurement categories and criteria and modify as needed.
2. Weight the measurement categories (Column E) according to their relative importance to each other; make sure the total adds up to 100%.
3. Weight the measurement criteria (Column D) within each measurement category according to their relative importance to each other; make sure the total adds up to 100%.
2. As a reminder, the vendor feedback form is for the relationship overall and not for a specific contract.
3. You can create variations of the feedback form based on vendor categories (e.g. hardware, software, cloud, security, telecom), but avoid the temptation of creating vendor-specific feedback forms unless the vendor is unique; conversely, you may want to create two or more feedback forms for a vendor that crosses categories and you work with different account management teams (one for each team).

Download the Info-Tech Elevate – Tools and Templates Compendium

Step 2.4 – Performance improvement plan (PIP)

Design your template to help underperforming vendors

It is not uncommon to see performance dips from even the best vendors. However, when poor performance becomes a trend, the vendor manager can work with the vendor to create and implement a performance improvement plan (PIP).

Performance issues can come from a variety of sources:

• Contractual obligations.
• Scorecard items.
• Compliance issues not specified in the contract.
• Other areas/expectations not covered by the scorecard or contract (e.g. vendor personnel showing up late for meetings, vendor personnel not being adequately trained, vendor personnel not being responsive).

PIPs should focus on at least a few key areas:

• The stated performance in the contract or the expected performance.
• The actual performance provided by the vendor.
• The impact of the vendor’s poor performance on the customer.
• A corrective action plan, including steps to be taken by the vendor and due dates and/or review dates.
• The consequences for not improving the performance level.

Info-Tech Insight

PIPs are most effective when the vendor is an operational, strategic, or tactical vendor (COST model) or a principal or valued vendor (MVP model) and when you are an opportunity or preferred customer (OPEN model).

2.4.1 – Performance improvement plan (PIP)

15 – 30 Minutes

1. Meet with the participants to review the two options for PIPs: Elevate – Tools and Templates Compendium – Tabs 2.4.1 and 2.4.2. Decide whether you want to use one or both options.
2. Modify, add, or delete elements from either or both options to meet your needs.
3. If you want to add signature lines for acknowledgement by the parties or other elements that may have legal implications, check with your legal advisors.

Download the Info-Tech Elevate – Tools and Templates Compendium

Step 2.5 – Relationship improvement plan (RIP)

Identify key relationship indicators for your vendors

Relationships are often taken for granted, and many faulty assumptions are made by both parties in the relationship: good relationships will stay good, bad relationships will stay bad, and relationships don’t require any work. In the vendor management space, these assumptions can derail the entire VMI and diminish the value added to your organization by vendors.

To complicate matters, relationships are multi-faceted. They can occur:

• On an organization-to-organization, working level.
• Do your roadmaps align with the vendors?
• Do the parties meet their contractual obligations?
• Do the parties meet their day-to-day requirements (meetings, invoices, responses to inquiries)?
• On an individual, personnel-to-personnel basis.
• Do you have a good relationship with the account manager?
• Does your project manager work well with the vendor’s project manager?
• Do your executives have good relationships with their counterparts at the vendor?

Improving or maintaining a relationship will not happen by accident. There must be a concerted effort to achieve the desired results (or get as close as possible). A relationship improvement plan can be used to improve or maintain a relationship with the vendor and the individuals who make up the vendor’s organization.

Step 2.5 – Relationship improvement plan (RIP)

Identify key relationship indicators for your vendors (continued)

Improving relationships (or even maintaining them) requires a plan. The first step is to understand the current situation: Is the relationship good, bad, or somewhere in between? While the analysis will be somewhat subjective, it can be made more objective than merely thinking about relationships emotionally or intuitively. Relationships can be assessed based on the presence and quality of certain traits, factors, and elements. For example, you may think communication is important in a relationship. However, that is too abstract and subjective; to be more objective, you would need to identify the indicators or qualities of good communication. For a vendor relationship, they might include (but wouldn’t necessarily be limited to):

• Vendor communication is accurate and complete.
• Vendor personnel respond to inquiries on a timely basis.
• Vendor personnel communications are easy to understand.
• Vendor personnel communicate with you in your preferred manner (text, email, phone).
• Vendor personnel discuss the pros and cons of vendor products/services being presented.

Evaluating these statements on a predefined and consistent scale establishes the baseline necessary to conduct a gap analysis. The second half of the equation is the future state. Using the same criteria, what would or should the communication component look like a year from now? After that is determined, a plan can be created to improve the deficient areas and maintain the acceptable areas.

Although this example focused on one category, the same methodology can be used for additional categories. It all starts with the simple question that requires a complex answer, “What traits are important to you and are indicators of a good relationship?”

2.5.1 – Relationship Improvement Plan (RIP)

15 – 60 Minutes

1. Meet with the participants to configure the relationship indicators in Elevate – Relationship Assessment and Improvement Plan tool – Tab 2. Set Parameters.
2. Review the 60 relationship indicators in column E of Tab 2. Set Parameters.
3. Identify any relationship indicators that are important to you but that are missing from the prepopulated list.
4. Add the relationship indicators you identified in step 3 above in the space provided at the end of column E of Tab 2. Set Parameters. There is space for up to 15 additional relationship indicators.

Download the Info-Tech Elevate – Relationship Assessment and Improvement Plan tool

Step 2.6 – Vendor-at-a-glance reports

Configure executive and stakeholder reports

Executives and stakeholders (“E&S”) discuss vendors during internal meetings and often meet directly with vendors as well. Having a solid working knowledge of all the critical vendors used by an organization is nearly impossible for E&S. Without situational awareness, though, E&S can appear uninformed, can be at the mercy of others with better information, and can be led astray by misinformation. To prevent these and other issues from derailing the E&S, two essential vendor-at-a-glance reports can be used.

The first report is the 60-Second Report. As the name implies, the report can be reviewed and digested in roughly a minute. The report provides a lot of information on one page in a combination of graphics, icons, charts, and words.

The second report is a vendor calendar. Although it is a simple document, the Vendor Calendar is a powerful communication tool to keep E&S informed of upcoming events with a vendor. The purpose is not to replace the automated calendaring systems (e.g. Outlook), but to supplement them.

Combined, the 60-Second Report and the Vendor Calendar provide E&S with an overview of the information required for any high-level meeting with a vendor or to discuss a vendor.

2.6.1 – Vendor-at-a-glance reports (60-Second Report)

30 – 90 Minutes

1. Meet with the participants to review the sample 60-Second Report and the Checklist of Potential Topics in Elevate – Tools and Templates Compendium – Tab 2.6.1 V-at-a-G 60-Second Report.
2. Identify topics of interest and ways to convey the data/information. (Make sure the data sources are valid and the data are easy to obtain.)
3. Create a framework for the report and populate the fields with sample data. Use one printed page as a guideline for the framework; if it doesn’t fit on one page, adjust the amount of content until it does. If you adjust the margins, font, size of the graphic content, and other items, make sure you don’t reduce the size too much. The brain needs white space to more easily absorb the content, and people shouldn’t have to squint to read the content!
4. Share the mockup with the intended audience and get their feedback. Use an iterative approach until you are satisfied that no further changes are necessary (or reasonable). Keep in mind that you will not be able to please everyone!

Download the Info-Tech Elevate – Tools and Templates Compendium

2.6.2 – Vendor-at-a-glance reports (vendor calendar)

15 – 30 Minutes

1. Meet with the participants to review the sample Vendor Calendar format in Elevate – Tools and Templates Compendium – Tab 2.6.2 V-at-a-G Vendor Calendar.
2. Brainstorm as a team to identify items to include in the calendar (e.g. business alignment meeting dates, conference dates, contract renewals).
3. Determine whether you want the Vendor Calendar to be:
1. A calendar year or a fiscal year (if they are different in your organization)
2. A rolling twelve-month calendar or a fixed calendar.
4. Decide whether the fill color for each month should change based on your answers in 3, above. For example, you might want a color scheme by quarter or by year (if you choose a rolling twelve-month calendar).
5. Share the mockup with the intended audience to get their feedback. Use an iterative approach until you are satisfied that no further changes are necessary (or reasonable). Keep in mind you will not be able to please everyone!

Download the Info-Tech Elevate – Tools and Templates Compendium

Step 2.7 – VMI personnel competency evaluation tool

Identify skills, competencies, and knowledge required for success

By now, you have built and begun managing the VMI’s 3-year roadmap and 90-day plans to help you navigate the VMI’s day-to-day operational path. To complement these plans, it is time to build a roadmap for the VMI’s personnel as well. It doesn’t matter whether VMI is just you, you and some part-time personnel, a robust and fully staffed vendor management office, or some other point on the vendor management spectrum. The VMI is a reflection of its personnel, and they must improve their skills, competencies, and knowledge (“S/C/K”) over time for the VMI to reach its potential. As the adage says, “What got you here won’t get you there.” To get there requires a plan that starts with creating an inventory of the VMI’s team members’ S/C/K. Initially, focus on two items: What S/C/K does the VMI currently have across its personnel? What S/C/K does the VMI need to get to the next level? Conducting an assessment of and developing an improvement plan for each team member will be addressed later in this blueprint. (See steps 3.7 – Evaluate VMI Personnel, 3.8 – Improve Professional Skills, and 3.9 - Expand Professional Knowledge.)

2.7.1 – VMI Personnel Competency Evaluation Tool

15 – 60 Minutes

1. Review the two options of the competency matrix found in Elevate – Tools and Templates Compendium tabs 2.7.1 and 2.7.2 and decide which format you want to use.
2. Review and modify as needed the prepopulated list of skills, competencies, knowledge, and other intellectual assets found in section 1 of the template option you selected in step 1. The list you use should reflect items that are important to your VMI's mission, goals, scope, charter, and operations.
3. No changes are required to Sections 2 and 3. They are dashboards and will be updated automatically based on any changes you make to the skills, competencies, knowledge, and other intellectual assets elements in section 1.

Download the Info-Tech Elevate – Tools and Templates Compendium.

Step 2.8 – Internal feedback tool

Create a user-friendly survey to learn about the VMI’s impact on the organization

Step 2.8 – Internal feedback tool

Create a user-friendly survey to learn about the VMI’s impact on the organization (continued)

4. Pay attention to your vocabulary and phrasing; use simple words. The goal is to communicate effectively and solicit feedback, and that all starts with the respondents being able to understand what you are asking or seeking. 5. Use response scales and keep the answer choices balanced. You want the respondents to find an answer that matches their feedback. For example, potential answers such as “strongly agree, agree, neutral, disagree, strongly disagree” are better than “strongly agree, agree, other.” 6. To improve your response rate, keep your survey short. Most people don’t like surveys, but they really hate long surveys. Make every question count, and keep the average response time to a maximum of a couple of minutes. 7. Watch out for “absolutes;” they can hurt the quality of your responses. Avoid using language such as always, never, all, and every in your questions or statements. They tend to polarize the evaluation and make it feel like an all-or-nothing situation. 8. Ask one question at a time or request evaluation of one statement at a time. Combining two topics into the same question or statement (double-barreled questions or statements) makes it difficult for the respondent to determine how to answer if both parts require different answers, for example, “During your last interaction with the VMI, how would you rate our assistance and friendliness?”

2.8.1 – Internal Feedback Tool

15 – 60 Minutes

1. Meet with the participants and review the information in Elevate – Phase 2 Tools and Templates Compendium – Tab 2.8.
2. Two types of surveys are referenced in tab 2.8: a general awareness survey and a specific interaction survey. Decide whether you want to create one or both for your VMI.
1. For a general awareness survey, review the questions in part 1 of tab 2.8 and make any changes required to meet your needs. Try to keep the number of questions to seven or less. Determine who will receive the survey and how often it will be used.
2. For a specific interaction survey, review the questions in Part 2 of Tab 2.8. Select up to 7 questions you want to use, making changes to existing questions or creating your own. The goal of this survey is to solicit feedback immediately after one of your internal clients has used the VMI’s services. You may need multiple variations of the survey based on the types of interactions or services the VMI provides.
3. Balance the length of the surveys against the information you are seeking and the time required for the respondents to complete the survey.

Download the Info-Tech Elevate –Tools and Templates Compendium

Step 2.9 – VMI ROI calculation

Identify ROI variables to track

After the VMI has been operating for a year or two, questions may begin to surface about the value the VMI provides. “We’re making an investment in the VMI. What are we getting in return?” “Does the VMI provide us with any tangible benefits, or is it another mandatory area like Internal Audit?” To keep the naysayers at bay, start tracking the value the VMI adds to the organization or the return on investment (ROI) provided.

The easy thing to focus on is money: hard-dollar savings, soft-dollar savings, and cost avoidance. However, the VMI often plays a critical role in vendor-facing activities that lead to saving time, improving performance, and managing risk. All of these are quantifiable and trackable. In addition, internal customer satisfaction (step 2.8 and step 3.11) can provide examples of the VMI’s impact beyond the four pillars of money, time, performance, and risk.

VMI ROI is a multifaceted and complex topic that is beyond the scope of this blueprint. However, you can do a deep (or shallow) dive on this topic by downloading and reading Info-Tech’s blueprint Capture and Market the ROI of Your VMO to plot your path for tracking and reporting the VMI’s ROI or value.

Download the Info-Tech blueprint Capture and Market the ROI of Your VMO

2.9.1 – VMI ROI calculation

2 – 4 Hours

1. Meet with the participants to review the Info-Tech blueprint Capture and Market the ROI of Your VMO.
2. Identify your ROI maturity level using the tools from that blueprint.
3. Develop a game plan for measuring and reporting your ROI.
4. Configure the tools to meet your needs.
5. Gain approval from applicable stakeholders or executives.

Download the Info-Tech blueprint Capture and Market the ROI of Your VMO

Step 2.10 – Vendor recognition program

Address the foundational elements of your program

A vendor recognition program can provide many benefits to your organization. Obtaining those benefits requires a solid plan and the following foundational elements:

• Internal alignment: The program must align with your organization’s principles and culture. A vendor recognition program that accentuates value and collaboration will not succeed in a customer environment that operates with a “lowest cost wins/price is the only thing we care about” mentality.
• Funding: Not every program requires extensive funding (or any funding), but more formal vendor recognition programs do require some investment. Underfunding will make your program look cheap and unimpressive. For example, a certificate of appreciation printed on plain paper using a Word template doesn’t send the same message as a nice plaque engraved with the winner’s name.
• Support: Executive buy-in and support are essential. Without this, only the most informal vendor recognition programs stand a chance of surviving. Executives and stakeholders are often directly involved in formal programs, and this broadens the appeal of the program from the vendor’s perspective.
• Designated leader: Someone needs to be in charge of the vendor recognition program. This doesn’t mean only one person is doing all the work, but it does require one person to lead the effort and drive the program forward. Much like the VMI itself, there are things the leader will be able to do themselves and things that will require the input, assistance, and participation from others throughout the organization.

Step 2.10 – Vendor recognition program

Leverage the advantages of recognizing vendors

As with any project, there are advantages and disadvantages with implementing and operating a vendor recognition program.

Advantages:

• The Pygmalion effect may come into play; the vendors’ performance can be influenced by your expectations as conveyed through the program.
• There may be some prestige for the vendor associated with winning one of your awards or receiving recognition.
• Vendor recognition programs can be viewed as a competition, and this can improve vendor performance as it relates to the program and program categories.
• The program can provide additional feedback to the vendor on what's important to you and help the vendor focus on those items.
• The vendors’ executives may have an increased awareness of your organization, which can help build relationships.
• Performance gains can be maintained or increased. Vendors are competitive by nature. Once a vendor wins an award or receives the recognition, it will strive to win again the following year (or measurement period).

Step 2.10 – Vendor recognition program

Manage the disadvantages of recognizing vendors

Just as a coin has two sides, there are two sides to a vendor recognition program. Advantages must be weighed against disadvantages, or at the very least, you must be aware of the potential disadvantages.

Disadvantages:

• The program may require funding, depending upon the scope and type of awards, rewards, and recognition being provided.
• Some vendors who don’t qualify for the program or who fail to win may get hurt feelings. This may alienate them.
• In addition to hurt feelings from being excluded or finishing outside of the winner’s circle, some vendors may believe the program shows favoritism to certain vendors or is too subjective.
• Some vendors may not “participate” in the program; they may not understand the WIIFM (what’s in it for me). You may have to “sell” the benefits and advantages of participation to the vendors.
• Participation may vary by size of vendor. The award, reward, or recognition may mean more to small and mid-sized companies than large companies.

Step 2.10 – Vendor recognition program

Create your program’s framework

There is no one-size-fits-all approach to creating a vendor recognition program. Your program should align with your goals. For example, do you want to drive performance and collaboration, or do you want to recognize vendors that exceed your expectations? While these are not mutually exclusive, the first step is to identify your goals. Next, focus on whether you want a formal or informal program. An informal program could consist of sending thank-you emails or notes to vendor personnel who go above and beyond; a formal program could consist of objective criteria announced and measured annually, with the winners receiving plaques, publicity, and/or recognition at a formal award ceremony with your executives. Once you have determined the type of program you want, you can begin building the framework.

Take a “crawl, walk, run” approach to designing, implementing, and running your vendor recognition program. Start small and build on your successes. If you try something and it doesn’t work the way you intended, regroup and try again.

The vendor recognition program may or may not end up residing in the VMI. Regardless, the VMI can be instrumental in creating the program and reinforcing it with the vendors. Even if the program is run and operated by the VMI, other departments will need to be involved. Seek input from the legal and marketing departments to build a durable program that works for your environment and maximizes its impact.

Lastly, don’t overlook the simple gestures…they go a long way to making people feel appreciated in today’s impersonal world. A simple (but specific) thank-you can have a lasting impact, and not everything needs to be about the vendor’s organization. People make the organization “go,” not the other way around.

2.10.1 – Vendor recognition program

30 – 90 Minutes

1. Meet with the participants to review the checklist in Elevate – Tools and Templates Compendium, Tab 2.10 Vendor Recognition.
1. Decide whether you want to create a program that recognizes individual vendor personnel. If so, review part 1 of tab 2.10 and select the elements you are interested in using to build your program.
2. Decide whether you want to create a program that recognizes vendors at the company level. If so, review part 2 of tab 2.10.
1. The first section lists elements of an informal and a formal approach. Decide which approach you want to take.
2. The second section focuses on creating a formal recognition program. Review the checklist and identify elements that you want to include or issues that must be addressed in creating your program.
2. Create a draft framework of your programs and work with other areas to finalize the program elements, timeline, marketing, budget, and other considerations.

Download the Info-Tech Elevate – Tools and Templates Compendium

Phase 3 – Run

Use New and Updated Tools and Increase the VMI’s Impact

This phase will walk you through the following activities:

This phase helps you begin integrating the new tools and templates into the VMI’s operations. The main outcomes from this phase are guidance and the steps required to continue your VMI’s maturation and evolution.

This phase involves the following participants:

• VMI team
• IT
• Legal
• Marketing
• Human resources
• Applicable stakeholders and executives
• Others as needed

Phase 3 – Run

Implement new processes, tools, and templates and leverage new concepts

The review and assessment conducted in Phase 1 – Plan and the tools and templates created and configured during Phase 2 – Build are ready for use and incorporation into your operations. As you trek through Phase 3 – Run, a couple of familiar concepts will be reviewed (vendor classification and scorecarding), and additional details on previously introduced concepts will be provided (customer positioning, surveying internal clients); in addition, new ideas will be presented for your consideration:

• Assessing the relationship landscape
• Gathering market intelligence
• Improving professional skills
• Expanding professional knowledge
• Creating brand awareness

Step 3.1 – Classify vendors & identify customer position

Classify your top 25 vendors by spend

The methodology used to classify your vendors in the blueprint Jump Start Your Vendor Management Initiative applies here as well, regardless of whether you use the COST model or the MVP model. Info-Tech recommends using an iterative approach initially to validate the results from the model you configured in step 2.1.

1. Start with your top 25 vendors by spend. From this pool, select 10 vendors: choose your top three vendors by spend, three from the middle of the pack (e.g. numbers 14, 15, and 16 by spend), and the bottom four by spend. Run all 10 vendors through the classification model and review the results.
2. If the results are what you expected and do not contain any significant surprises, run the rest of the top 25 vendors through the model.
3. If the results are not what you expected or do contain significant surprises, look at the configuration page of the tool (tab 2) and adjust the weights slightly. Be cautious in your evaluation of the results before modifying the configuration page – some legitimate results are unexpected or surprises based on biases or subjective expectations. Proceed to point 1 above and repeat this process as needed.

Remember to share the results with executives and stakeholders. Switching from one classification model to another may lead to concerns or questions. As always, obtain their buy-in on the final results.

Step 3.1 – Classify vendors and identify customer position

Translate terminology and processes if you use the MVP vendor classification model

If you use the MVP model, the same features will be applicable and the same processes will be followed after classifying your vendors, despite the change in nomenclature. (Strategic vendors are the equivalent of principal vendors; high operational and high tactical vendors are the equivalent of valued vendors; and all other vendors are the equivalent of minor vendors.)

• Roughly 5% (max) of your total vendor population will be classified as principal.
• Approximately 10% (max) of your total vendor population will be classified as valued.
• About 80% of your total vendor population will be classified as minor.
• Business alignment meetings should be conducted and scorecards should be compiled quarterly for your principal vendors and at least every six months for your valued vendors; business alignment meetings are not necessary for your minor vendors.
• All other activities will be based on the criteria you used in your MVP model. For example, risk measuring, monitoring, and reporting might be done quarterly for principal and valued vendors if risk is a significant component in your MVP model; if risk is a lesser component, measuring, monitoring, and reporting might be done less frequently (every six or 12 months).

Step 3.1 – Classify vendors and identify customer position

Determine your customer position for your top 25 vendors using the OPEN model

After classifying your vendors, run your top 25 vendors through the OPEN Model Customer Positioning Tool. The information you need can come from multiple sources, including: Talking to internal personnel to determine responses to the OPEN model assessment statements. Compiling spend information. Looking at the vendors’ financial statements. Talking with the vendors to glean additional information. At first blush, the results can run the emotional and logical gamut: shocking, demeaning, degrading, comforting, insightful, accurate, off-kilter, or a combination of these and other reactions. To a certain extent, that is the point of the activity. As previously stated, customers often overestimate their importance to a vendor. To be helpful, your perspective must be as objective as possible rather than the subjective view painted by the account team and others within the vendor (e.g. “You’re my favorite client,” “We love working with you,” “You’re one of our key accounts,” or “You’re one of our best clients.”) The vendor often puts customers on a pedestal that is nothing more than sales puffery. How a vendor treats you is more important than them telling you how great you are. Use the OPEN model results and the material on the following pages to develop a game plan as you move forward with your vendor-facing VMI activities. The outcomes of the OPEN model will impact your business alignment meetings, scorecards, relationships, expectations, and many other facets of the VMI.

Info-Tech Insight

The OPEN Model Customer Positioning Tool can be adapted for use at the account manager level to determine how important your account is to the account manager.

*Adapted from Profitable Purchasing Strategies by Paul T. Steele and Brian H. Court

Step 3.1 – Classify vendors and identify customer position

Learn how each quadrant of the open model impacts your organization (continued)

Opportunity

Low value and high attractiveness

Characteristics and potential actions by the vendor

• Higher level of service provided.
• Higher level of attention.
• Nurture the customer.1
• Expand the business and relationship.1
• Seek new opportunities.2
• Provide proactive service.
• Demonstrate added value.

Customer strategies

• Leverage the position – the vendor may be willing (at least in the short term) to meet your requirements in order to win more business.3
• Look for ways to improve your value to the vendor and to grow the relationship and business if it works to your advantage.

1. Procurement Cube, 2020. 2. Accuity Consultants, 2012. 3. New Zealand Ministry of Business, Innovation & Employment, 2021.

Step 3.1 – Classify vendors and identify customer position

Learn how each quadrant of the OPEN model impacts your organization (continued)

Preferred

High value and high attractiveness

Characteristics and potential actions by the vendor

• High level of service provided.
• High level of attention, service, and response.1
• The supplier actively seeks longer-term commitments.2
• Retain and expand the business and relationship.3
• Look after and pamper the customer.4
• Fight to keep the account.
• There is a dedicated account manager2 (you are the account manager’s only account).

Customer strategies

• Establish a rewarding business relationship in which both parties continually seek to add value.3
• Leverage the relationship to gain better access to innovation, collaborate to eliminate waste, and work together to maintain or increase your competitive advantages.1

  1. Procurement Cube, 2020. 2. Comprara, 2015. 3. New Zealand Ministry of Business, Innovation & Employment, 2021. 4. Accuity Consultants, 2012.

Step 3.1 – Classify vendors and identify customer position

Learn how each quadrant of the OPEN model impacts your organization (continued)

Exploitable

High value and low attractiveness

Characteristics and potential actions by the vendor

• Lower level of service provided.
• Lower level of attention.
• Strive for best price from the customer (i.e. premium pricing).1
• Seek short-term advantage and consistent price increases.
• Accept risk of losing the customer.
• Focus on maximizing profits.2
• Provide reactive service.

Customer strategies

• Look for alternative vendors or try to make the relationship more attractive by considering more efficient ways to do business2 or focusing on issues other than pricing.
• Identify ways to improve your organization’s attractiveness to the vendor or the account manager.

1. Accuity Consultants, 2012. 2. New Zealand Ministry of Business, Innovation & Employment, 2021.

Step 3.1 – Classify vendors and identify customer position

Learn how each quadrant of the open model impacts your organization

Negligible

Low value and low attractiveness

Characteristics and potential actions by the vendor

• Lower level of service provided.
• Lower level of attention.1
• Loss of interest and enthusiasm for customer’s business.
• Loss of customer will not cause any pain.1
• Terminate the relationship.2
• Terms and conditions are the “standard” terms and are non-negotiable.3
• There is a standard price list and discounts are in line with industry norms.3

Customer strategies

• You may wish to consider sourcing from other suppliers who value your business more highly.2
• Identify the root cause of your position and determine whether it is worthwhile (or possible) to improve your position.

1. Procurement Cube, 2020. 2. New Zealand Ministry of Business, Innovation & Employment, 2021. 3 Comprara, 2015.

Step 3.1 – Classify vendors and identify customer position

Think like a vendor to increase situational awareness

In summary, vendor actions are understandable and predictable. Learning about how they think and act is invaluable. As some food for thought, consider this snippet from an article aimed at vendors:

“The [customer positioning] grid or matrix is, in itself, a valuable snapshot of the portfolio of customers. However, it is what we do with this information that governs how effective the tool is. It can be used in many ways:

• It helps in the allocation of resources to specific customers, and whether the right resources are being allocated to the right customers.
• It can determine the style of relationship that is appropriate to have with this client – and whether the real relationship truly reflects this.
• It can influence the amount of time spent with these clients. Interestingly, we often find that a disproportionate amount of management time is spent on [Negligible] Customers (at the expense of spending more time with [Preferred] Accounts)!
• It should significantly influence the price and profitability targets for specific customers.
• And, last but by no means least, it should determine our negotiation style for different customers.”1

1 “Rule No. 5: All Customers/Suppliers Have a Different Value to You,” New Dawn Partners.

Step 3.2 – Assess the relationship landscape

Identify key relationships and relationship risks

After classifying your vendors (COST or MVP model) and identifying your positioning for the top vendors via the OPEN Model Customer Positioning Tool, the next step is to assess the relationship landscape. For key vendors (strategic, high operational, and high tactical under the COST model and principal and valued under the MVP model), look closer at the relationships that currently exist:

• What peer-to-peer relationships exist between your organization and the vendor (e.g. your project manager works closely with the vendor’s project manager)? Look across executives, mid-level management, and frontline employees.
• What politically charged relationships exist between employees of the two organizations and the organizations themselves? Examples include:
  • Friendships, neighbors, and relationships fostered by children on the same sports team or engaged in other activities.
  • Serving on third-party boards of directors or working with the same charities in an active capacity.
  • Reciprocity relationships where each organization is a customer and vendor to the other (e.g. a bank buys hardware from the vendor and the vendor uses the customer for its banking needs).
• How long has the contract relationship been in place?

This information will provide a more holistic view of the dynamics at work (or just beneath the surface) beyond the contract and operational relationships. It will also help you understand any relationship leverage that may be in play…now or in the future…from each party’s perspective.

3.2.1 – Assess the relationship landscape

10 - 30 Minutes per vendor

1. Decide whether to meet with the participants in small groups or as a large group.
2. Using Elevate – Tools and Templates Compendium – Tab 3.2 Relationship Landscape, for each important vendor (strategic, tactical, and operational under the COST model or principal and valued under the MVP model), identify and evaluate the relationships that exist for the following categories:
1. Professional: relationships your personnel have with the vendor’s executives, mid-level management, and frontline employees.
2. Political: personal relationships between customer and vendor personnel, any professional connections, and any reciprocity between your organization and the vendor.

Download the Info-Tech Elevate – Tools and Templates Compendium

Step 3.3 – Leverage two-way scorecards

Roll out your new vendor scorecards and feedback forms

As you roll out your new, enhanced scorecards, the same principles apply. Only a couple of modifications need to be made to your processes.

For the vendor scorecards, the VMI will still be driving the process, and internal personnel will still be completing the scorecards. An email or short orientation meeting for those involved will ease the transition from the old format to the new format. Consider creating a FAQ (frequently asked questions) for the new template, format, and content; you’ll be able to leverage it via the email or meeting to answer questions such as: What changed? Why did it change? Why are we doing this? In addition, making a change to the format and content may generate a need for new or additional internal personnel to be part of the scorecarding process. A scorecarding kick-off meeting or orientation meeting will ensure that the new participants buy into the process and acclimate to the process quickly.

For the vendor feedback, the look and feel is completely new. The feedback questions that were part of the BAM agenda have been replaced by a more in-depth approach that mirrors the vendor scorecards. Consider conducting a kick-off meeting with each participating vendor to ensure they understand the importance of the feedback form and the process for completing it. Remember to update your process to remind the vendors to submit the feedback forms three to five business days prior to the BAM (and update your BAM agenda). You will want time to review the feedback and identify any questions or items that need to be clarified. Lastly, set aside some extra time to review the feedback form in the first BAM after you shift to the formal format.

Step 3.4 – Implement PIPs and RIPs

Improve vendor performance

Underperforming vendors are similar to underperforming employees. There can be many reasons for the lackluster performance, and broaching the subject of a PIP may put the vendor on the defensive. Consider working with the human resources department (or whatever it is called in your organization) to learn some of the subtle nuances and best practices from the employee PIP realm that can be used in the vendor PIP realm.

When developing the PIP, make sure you:

• Work with legal to ensure compliance with the contract and applicable laws.
• Adequately convey the expected performance to the vendor; it is unfair to hold a vendor accountable for unreasonable and unconveyed expectations.
• Work with the vendor on the PIP rather than imposing the PIP on the vendor.
• Remain objective and be realistic about timelines and improvement.

Not all performance issues require a PIP; some can be addressed one-on-one with the vendor’s account manager, project manager, or other personnel. The key is to identify meaningful problems and use a PIP to resolve them when other measures have failed or when more formality is required.

A PIP is a communication tool, not a punishment tool. When used properly, PIPs can improve relationships, help avoid lawsuits, and prevent performance issues from having a significant impact on your organization.

Step 3.4 – Implement PIPs and RIPs

Improve vendor relationships

After assessing the relationship landscape in step 3.2 and configuring the Relationship Assessment and Improvement Plan Tool in step 2.5, the next step is to leverage that information: 1) establish a relationship baseline for each critical vendor; and 2) develop and implement a plan for each to maintain or improve those relationships.

The Relationship Assessment and Improvement Plan Tool provides insights into the actual status of your relationships. It allows you to quantify and qualify those relationships rather than relying on intuition or instinct. It also pinpoints areas that are strong and areas that need improvement. Identify your top seven relationship priorities and build your improvement/maintenance plan around those to start. (This number can be expanded if some of your priorities are low effort or if you have several people who can assist with the implementation of the plan.) Decide which relationship indicators need a formal plan, which ones require only an informal plan, and which ones involve a hybrid approach. Remember to factor in the maintenance aspect of the relationship – if something is going well, it can still be a top priority to ensure that the relationship component remains strong.

Similar to a PIP, your RIP can be very formal with action items and deadlines. Unlike a PIP, the RIP is typically not shared with the vendor. (It can be awkward to say, “Here are the things we’re going to do to improve our relationship, vendor.”)

The level of formality for your plan will vary. Customize your plan for each vendor. Relationships are not formulaic, although they can share traits. Keep in mind what works with one person or one vendor may not work for another. It’s okay to revisit the plan if it is not working and make adjustments.

Step 3.5 – Gather market intelligence

Determine the nature and scope of your market intelligence

What is market intelligence?

Market intelligence is a broad umbrella that covers a lot of topics, and the breadth and depth of those topics depend on whether you sit on the vendor or customer side of the equation. Even on the customer side, the scope and meaning of market intelligence are defined by the role served by those gathering market intelligence. As a result, the first step for the VMI is to set the boundaries and expectations for its role in the process. There can be some overlap between IT, procurement/sourcing, and the VMI, for example. Coordinating with other functional areas is a good idea to avoid stepping on each other’s toes or expending duplicate resources unnecessarily.

For purposes of this blueprint, market intelligence is defined as gathering, analyzing, interpreting, and synthesizing data and information about your critical vendors (high operational, high tactical, and strategic under the COST model or valued and principal under the MVP model), their competitors, and the industry. Market intelligence can be broken into two basic categories: individual vendors and the industry as a whole. For vendors, it generally encompasses data and information about products and services available, each vendor’s capabilities, reputation, costs, pricing, advantages, disadvantages, finances, location, risks, quality ratings, standard service level agreements (SLAs) and other metrics, supply chain risk, total cost of ownership, background information, and other points of interest. For the industry, it can include the market drivers, pressures, and competitive forces; each vendor’s position in the industry; whether the industry is growing, stable, or declining; whether the industry is competitive or led by one or two dominant players; and the potential for disruption, trends, volatility, and risk for the industry. This represents some of the components of market intelligence; it is not intended to be an exhaustive list.

Market intelligence is an essential component of a VMI as it matures and strives to be strategic and to provide significant value to the organization.

Step 3.5 – Gather market intelligence

Determine the nature and scope of your market intelligence

What are the benefits of gathering market intelligence?

Depending on the scope of your research, there are many potential uses, goals, and benefits that flow from gathering market intelligence:

• Identify potential alternate vendors.
• Learn more about the vendors and market in general.
• Identify trends, innovations, and what’s available in the industry.
• Improve contract protections and mitigate contract/performance risk.
• Identify more comprehensive requirements for RFPs and negotiations.
• Identify the strengths, weaknesses, opportunities, and threats for vendors.
• Assist with minority/women/veteran-owned business or small business use initiatives.
• Improve the pool of potential vendors for future RFPs, which can improve competition for your business.
• Leverage information gained when negotiating or renegotiating at renewal (better terms and conditions).
• Ensure ongoing alignment or identify gaps/risks between your current vendor’s capabilities and your needs.

Step 3.5 – Gather market research and intelligence

Begin collecting data and information

What are some potential sources of information for market intelligence?

For general information, there are many places to obtain market intelligence. Here are some common resources:

• User groups
• The internet
• Vendor demos
• Vendor marketing materials and websites
• Internal personnel interviews and meetings
• Industry publications and general periodicals
• Trade shows and conferences (hosted or attended by vendors)
• Requests for information (RFIs) and requests for proposal (RFPs)
• Vendor financial filings for publicly held companies (e.g. annual reports, 10-K, 10-Q)

Keep in mind the source of the information may be skewed in favor of the vendor. For example, vendor marketing materials may paint a rosier picture of the vendor than reality. Using multiple sources to validate the data and information is a leading practice (and common sense).

For specific information, many VMIs use a third-party service. Third-party services can dedicate more resources to research since that is their core function. However, the information obtained from any third party should be used as guidance and not as an absolute. No third-party service has access to every deal, and market conditions can change often and quickly.

Step 3.5 – Gather market research and intelligence

Resolve storage and access issues

Some additional thoughts on market intelligence

• Market intelligence is another tool in the VMI’s toolbox. How you use it and what you do with the results of your efforts is critical. Collecting information and passing it on without analysis or insights is close to being a capital offense.
• As previously mentioned, defining the scope and nature of market intelligence is the first step. In conjunction with that, remember to identify where the information will be stored. Set up a system that allows for searching by relevance and easy retrieval. You can become overwhelmed with information.
• Periodically update the scope and reach of your market intelligence efforts. Do you need to expand, contract, or maintain the breadth and depth of your research? Do new vendors and industries need to be added to the mix?
• Information can grow stale. Review your market intelligence repository at least annually and purge unneeded or outdated information. Be careful though – some historical information is helpful to show trends and evolution. Decide whether old information should be deleted completely or moved to an archive.
• Determine who should have access to your repository and what level of access they should have. Do you want to share outside of the VMI? Do you want others to contribute to or modify/edit the material in the repository or only be able to read from the repository?

Step 3.6 – Generate vendor-at-a-glance reports

Keep executives and stakeholders informed about critical vendors

Much of the guidance provided on reports in the blueprint Jump Start Your Vendor Management Initiative holds true for the 60-Second Report and the Vendor Calendar.

• Determine who will be responsible for updating the reports, knowing that the VMI will be mainly coordinating the process and assembling the data/information rather than obtaining the data firsthand.
• Determine the frequency. Most likely it will be periodic and ad hoc; for example, you may decide to update the 60-Second Report in whole or in part each quarter, but you may need to update it in the middle of the quarter if an executive has a meeting with one of your critical vendors at that time.
• Even though you obtained feedback and “approval” from executives and stakeholders during step 2.6, you will still want to seek their input periodically. Their needs may change from time to time with respect to data, information, and formatting. Avoid the temptation to constantly make changes to the format, though. After the initial review cycle, try to make changes only annually as part of your ongoing review process.
• Unfortunately, these reports require a manual approach; some parts may be automated, but that will depend on your format and systems.

These reports should be kept confidential. Consider using a “confidential” stamp, header, watermark, or other indicator to highlight that the materials are sensitive and should not be disclosed outside of your organization without approval.

Step 3.7 – Evaluate VMI personnel

Compare skills, competencies, and knowledge needed to current levels

Using the configured VMI personnel assessment tool (Elevate – Tools and Templates Compendium tab 2.7.1 or 2.7.2), evaluate each VMI employee’s skills, competencies, and knowledge (S/C/K) against the established minimum level required/desired field for each. Use this tool for full-time and part-time team members to obtain a complete inventory of the VMI’s S/C/K.

After completing the assessment, you will be able to identify areas where personnel exceed, meet, or fail to meet the minimum level required/desired using the included dashboards. This information can be used to create a development plan for areas of deficiency or areas where improvement is desired for career growth.

As an alternative, you can assess VMI personnel using their job descriptions. Tab 2.7.3 of the Tools and Templates Compendium is set up to perform this type of analysis and create a plan for improvement when needed. Unlike Tabs 2.7.1 and 2.7.2, however, the assessment does not provide a dashboard for all employee evaluations. Tab 2.7.3 is intended to focus on the different roles and responsibilities for each employee versus the VMI as a whole.

Lastly, you can use Tab 2.7.4 to evaluate potential VMI personnel during the interview process. Load the roles and responsibilities into the template, and evaluate all the candidates on the same criteria. A dashboard at the bottom of the template quantifies the number of instances each candidate exceeds, meets, and fails to meet the criteria. Used together, the evaluation matrix and dashboard will make it easier to identify each candidate’s strengths and weaknesses (and ultimately select the best new VMI team member).

Step 3.8 – Improve professional skills

Increase proficiency in a few key areas

To be an effective member of the VMI requires proficiency in many areas. Some basic skills like computer skills, writing, and time management are straightforward. Others are more nebulous. The focus of this step is on a few of the often-overlooked skills lurking in the shadows: Communication Running a meeting Diplomacy Emotional intelligence quotient (EQ) Influence and persuasion Building and maintaining relationships For the VMI to be viewed as a strategic and integral part of the organization, these skills (and others) are essential. Although this blueprint cannot cover all of them, some leading practices, tips, and techniques for each of the skills listed above will be shared over the next several pages.

Step 3.8 – Improve professional skills

Communicate more effectively

Communication is the foundational element for the other professional skills covered in this Step 3.8. By focusing on seven key areas, you can improve your relationships, influence, emotional intelligence quotient, diplomacy, and impact when interacting with others. The concepts for the seven focal points presented here are the proverbial tip of the iceberg. Continue learning about these areas, and recognize that mastering each will require time and practice.

1. Writing.
1. Stick with simple words;1 you’re trying to communicate, not impress people with your vocabulary.
2. Keep your sentences simple;1 use short words, short sentences, and short paragraphs.2
3. Read your writing aloud;1 If you have to take a breath while reading a sentence out loud, the sentence is too long.
4. Use a tool like Grammarly or the built-in functionality of Word to determine readability; aim for a score of 60 to 70 or a seventh- or eighth-grade level.3
5. When reviewing your writing: consider your word choice and the implications of your words; look for unintended interpretations, ambiguities, and implied-tone issues.

1 Grammarly, 2017. 2 Elna Cain, 2018. 3 Forbes, 2016.

Step 3.8 – Improve professional skills

Communicate more effectively (continued)

2. Speaking

1. Similar to writing, focus on short words and sentences. Avoid run-on sentences.
2. Think before speaking and work on eliminating “ums,” “uhs,” and “you knows.” These detract from your message.
3. Choose words that are “comfortable” for the other person/people. Rule number one in public speaking is to know your audience, and that rule applies beyond public speaking and to groups of all sizes (1 to 1,000+).
4. Don’t confuse the words with the message.
5. Pay attention to your tone, pace, and volume. Try to match your counterpart in one-on-one settings.

3. Body Language.

1. Understand body language’s limitations; it is part art and part science…not an absolute.
2. Individual movements and movement clusters can provide information regarding the spoken message – look for consistencies and inconsistencies. A baseline for the person is needed to interpret the body language “accurately.”
3. Pay attention to your own body language. Does it match the message being conveyed by your words or those of your teammates (in group settings)?

Step 3.8 – Improve professional skills

Communicate more effectively (continued)

4. Personality.

1. Identify your counterpart’s personality: Are they extroverted or introverted? Are they effusive or reserved? Are they diplomatic or offensive? Are they collaborative or looking to blame someone?
2. Appeal to their personality type when possible, but avoid the blame game. For example, don’t be loud and “over the top” with someone who is reserved and quiet.

5. Style.

1. Determine your counterpart’s style for both written and spoken communications: Are they direct or indirect? Are they bottom-line or do they prefer descriptions and build-ups? Are they into empirical data or anecdotal examples?
2. To maximize the connection and communication effectiveness, match their style…even if it means getting out of your comfort zone a little. For example, if you have an indirect style, you will have to be more direct when dealing with someone who is direct; otherwise, you run the risk of alienating your counterpart (i.e. they will get frustrated or bored, or their mind will wander).

Step 3.8 – Improve professional skills

Communicate more effectively (continued)

6. Learning

1. People absorb information in three ways:
1. Visually: These learners need to see things for them to make sense and be retained.
2. Auditory: These learners need to hear things for them to make sense and be retained.
3. Kinesthetic/experiential: These learners need to do something or experience it to understand and retain it.
2. While some people are dominant in one area, most are a combination of one or more methods.
3. If you can identify a person’s preferred method of learning, you can enhance your ability to communicate. For example, talking (exclusively) with a visual learner will be minimally effective; showing that person a picture or graph while talking will increase your effectiveness.

7. Actions and inactions.

1. Communication goes beyond words, messages, body language, and other issues. Your actions or inactions following a communication can undo your hard work to communicate effectively.
2. Follow through on promises, action items, or requests.
3. Meet any deadlines or due dates that result from communications. This helps build trust.
4. Make sure your follow-through items are complete and thorough. Half-way is no way!
5. Communicate any delays in meeting the deadlines or due dates to avoid

Step 3.8 – Improve professional skills

Tap into your inner diplomat

Diplomacy can be defined many ways, but this one seems to fit best for the purposes of vendor management: The ability to assert your ideas or opinions, knowing what to say and how to say it without damaging the relationship by causing offense.1 At work, diplomacy can be about getting internal or external parties to work together, influencing another party, and conveying a message tactfully. As a vendor manager, diplomacy is a necessary skill for working with your team, your organization, and vendors.

To be diplomatic, you must be in tune with others and understand many things about them such as their feelings, opinions, ideas, beliefs, values, positions, preferences, and styles. To achieve this, consider the following guidance:2

• Modify your communication style: Communication is about getting someone to understand and evaluate your message so they can respond. Approach people the way they want to be approached. For example, sending an email to a person who prefers phone calls may create a communication issue.
• Choose your words carefully: Use words as an artist uses a brush, paint, and a canvas. Paint a picture through word selection. Similar words can portray different scenes (e.g. the child ran to the store quickly vs. the child raced to the store). Make sure your image is relatable for your counterpart.

1 “The Art of Tact and Diplomacy,” SkillsYouNeed 2 Communiqué PR, 2020.

Step 3.8 – Improve professional skills

Tap into your inner diplomat (continued)

• Slow down a speak concisely: Say what you have to say…and stop. No one likes a communicator who rambles on and on. Once your message has been conveyed, go into silent mode. Get comfortable with silence; there is no need to fill the void with more meaningless words. Let your counterpart contemplate in peace.
• Listen to understand: Be an active listener rather than biding your time until you can talk again. Avoid interrupting the other party (whenever possible, but sometimes it is needed!). Show interest in what the other person is saying and ask clarifying questions. Make eye contact, nod your head periodically, and summarize what you hear from time to time. Use your ears and mouth in proportion: listen twice as much as you talk.
• Consider nonverbals: Read the facial expressions of the speaker and be aware of your own. Faces tend to be expressive; sometimes we are aware of it…and sometimes we aren’t. Try relaxing your face and body to minimize the involuntary expressions that may betray you. Adopt a diplomatic facial expression and practice using it; find the right mix of interest and neutrality.

Whenever things get tense, take a deep breath, take a break, or stop the communication (based on the situation and what is appropriate). Being diplomatic can be taxing, and it is better to step back than to continue down a wrong path due to stress, emotion, being caught off guard, etc.

Step 3.8 – Improve professional skills

Build and maintain relationships

Relationship building and networking cannot be overvalued. VMI personnel interact with many areas and people throughout the organization, and good relationships are essential. Building and maintaining relationships requires hard work and focusing on the right items. Although there isn’t a scientific formula or a mathematical equation to follow, key elements are present in all durable relationships.

Focus on building relationships at all levels within your organization. People at every level may have data or information you need, and your relationship with them may be the deciding factor in whether you get the information or not. At other times, you will have data and information to give, and the relationship may determine how receptive others are to your message. Some relationship fundamentals are provided below and continue on the next page.1,2

• Trust: be honest and ethical and follow through on your commitments.
• Diversity: build relationships with people who aren’t just like you to expand your mindset.
• Interrelatedness: understand how what you do impacts others you have relationships with.
• Varied interaction: a good relationship will incorporate work-related interactions with personal interactions.
• Effective communication: combine methods of communication but focus on the other person’s preferred method.

1 ”Seven Characteristics of Successful Work Relationships,” 2006. 2 Success.com, 2022.

Step 3.8 – Improve professional skills

Build and maintain relationships (continued)

• Empathy – understand where the other person is coming from through active listening.
• Vulnerability – create a judgment-free zone.
• Respect – this must be given and earned.
• Real face time – meeting in the offline world signals to the person that they are important (but this is not always possible today).
• A giving-first mentality – provide something of value before asking for something in return.
• Unique perspective – tap into what the other person believes and values.
• Intent – start with genuine interest in the other person and the relationship.
• Hard work – active engagement and a commitment to the relationship are required.
• Honesty – be honest in your communications.
• Challenge – be open to thinking differently and trying new things.
• Value – identify what you add to the relationship.
• Conscientiousness – be aware of the relationship’s status and react accordingly.

Step 3.8 – Improve professional skills

Run meetings more efficiently and effectively

Most people don’t get excited about meetings, but they are an important tool in the toolbox. Unfortunately, many meetings are unnecessary and unproductive. As a result, meeting invites often elicit an audible groan from invitees. Eliminating meetings completely is not a practical solution, which leaves one other option: improving them.

You may not be in charge of every meeting, but when you are, you can improve their productivity and effectiveness by making a few modifications to your approach. Listed below are ten ideas for getting the most out of your meetings:*

1. Begin with the mindset that you are a steward or protector of the meeting attendees’ time, and you never want attendees to feel that you wasted their time.
2. Keep the attendee list to essential personnel only. Everyone attending the meeting should be able to justify their attendance (or you should be able to justify it).
3. Set an appropriate time limit for the meeting. Don’t default to the 60-minute meeting; right-size the meeting time (e.g. 15, 30, or 45 minutes or some other number). Shorter meeting times force participants to focus.
4. Create and use an agenda. To help you stay focused and to determine who to invite, set up the agenda as a list of questions rather than a list of topics.

*Adapted from “The Surprising Science Behind Successful Remote Meetings” by Steven G. Rogelberg

Step 3.8 – Improve professional skills

Run meetings more efficiently and effectively (continued)

5. Use video when anyone is attending virtually. This helps prevent anonymity and increases engagement.

6. Start and end meetings on time. Running over impacts other meetings and commitments; it also makes you look ineffective and increases stress levels for attendees.

7. If longer meetings are necessary, build in a short break or time for people to stand up and stretch. Don’t say, “If you need a break or to stand up during the meeting, feel free.” Make it a planned activity.

8. Keep others engaged by facilitating and drawing specific people into the conversation; however, don’t ask people to contribute on topics that they know nothing about or ask generally if anyone has any comments.

9. Leverage technology to help with the meeting; have someone monitor the chat for questions and concerns. However, the chat should not be for side conversations, memes, and other distractions.

10. End the meeting with a short recap, and make sure everyone knows what was decided/accomplished, what next steps are, and which action items belong to which people.

Step 3.8 – Improve professional skills

Increase emotional intelligence

Emotional intelligence (otherwise known as emotional intelligence quotient or EQ) is the ability to understand, use, and manage your own emotions in positive ways to relieve stress, communicate effectively, empathize with others, overcome challenges and defuse conflict.1 This is an important set of skills for working with vendors and internal personnel. Increasing your EQ will help you build better relationships and be seen as a valuable teammate…at all levels within your organization.

Improving this skill dovetails with other skills discussed in this step 3.8, such as communication and diplomacy. Being well versed in the concepts of EQ won’t be enough. To improve requires a willingness to be open – open to feedback from others and open to new ideas. It also requires practice and patience. Change won’t happen overnight, but with some hard work and perseverance, your EQ can improve.

There are many resources that can help you on your journey, and here are some tips to improve your EQ:2

• Practice observing how you feel.
• Pay attention to how you behave.
• Learn to look at yourself objectively.
• Understand what motivates you.
• Acknowledge your emotional triggers.
• Be interested in the subject matter.

1 HelpGuide, 2022. 2 RocheMartin, 2022.

Step 3.8 – Improve professional skills

Increase emotional intelligence (continued)

Tips to improve your EQ (continued from previous page):

• It’s your choice how you react to a situation.
• Listen without interruption, preconceptions, or skepticism; absorb their situation and consider how they are feeling before you react.
• Try to be approachable and accessible.
• Think about what’s happening from their perspective.
• Cultivate a curiosity about strangers to understand different opinions, views, and values.
• Acknowledge what people are saying to show you are actively listening.
• Think about how you’re physically coming across with your body language, tone of voice, eye contact, and facial expressions.

Things to avoid:1

• Drama – don’t let others’ emotions affect or rule yours.
• Complaining – don’t be a victim; do look for solutions.
• Dwelling on the past – learn from the past and live in the present.
• Selfishness – consider others’ needs, not just your own.
• Being overly critical – understand the other person, then communicate the change you want to see.

1 RocheMartin, 2022.

Step 3.8 – Improve Professional Skills

Use Influence and Persuasion to Benefit the VMI

Skills such as influence and persuasion are important (even necessary) for vendor managers. (Don’t confuse this with the dark arts version – manipulation.) A good working definition is provided by the Center for Creative Leadership: Influence is the ability to affect the behavior of others in a particular direction, leveraging key tactics that involve, connect, and inspire them.* Influence and persuasion are not about strongarming or blackmailing someone to get your way. Influence and persuasion are about presenting issues, facts, examples, and other items in a way that moves people to align with your position. Sometimes you will be attempting to change a person’s mind, and other times you will be moving them from a neutral stance to agreeing to support your position.

Building upon the basic communication skills discussed at the start of this step, there are some ways to improve your ability to influence and persuade others. Here are some suggestions to get you started:*

1. Develop organizational intelligence – learn how your organization truly operates; identify the power brokers and their spheres of control and influence. Many failures to persuade and influence stem from not understanding who can help and how they can help (or hinder) your efforts. The most influential person in your organization may not be the person with the fancy title.
2. Promote yourself and the team – don’t be afraid to step into the spotlight and demonstrate your knowledge and expertise. To be able to persuade and influence as and individual or a team, credibility must be established.

* Center for Creative Leadership, 2020.

Step 3.8 – Improve professional skills

Use influence and persuasion to benefit the VMI (continued)

3. Build and maintain trust – trust has two main components: competency and character. In item 2 on the previous page, competency trust was discussed from the perspective of knowledge and expertise. For character trust, you need to be viewed as being above reproach. You are honest and ethical; you follow through and honor your commitments. Once both types of trust are in place, eyes and ears will be open and more receptive to your messages. Bottom line: You can’t influence or persuade people if they don’t trust you.

4. Grow and leverage networks – the workplace is a dynamic atmosphere, and it requires almost constant networking to ensure adequate contacts throughout the organization are maintained. Leveraging your network is an artform, and it must be used wisely. You don’t want to wear out your welcome by asking for assistance too often.

As you prepare your plan to influence or persuade someone, ask yourself the following questions:*

• Who am I attempting to influence?
• What is the situation and how much support do I need?
• Why do I need this person’s support for my idea?
• What tactics can I use, and how can I establish rapport?
• What responses do I anticipate?
• What mutual points of agreement can I use?
• How can I end on a positive note no matter what the outcome is?

* Center for Creative Leadership, 2020.

Step 3.9 – Expand professional knowledge

Learn more about departments and functions tangential to the VMI

To function in their roles, VMI personnel must be well versed in the concepts and terminology associated with vendor management. To be strategic and to develop relationships with other departments, divisions, agencies, and functional groups, VMI personnel must also be familiar with the concepts and terminology for functions outside the VMI. Although a deep dive is beyond the scope of this blueprint, understanding basic concepts within each of the topics below is critical:

• Finance and accounting
• Project management
• Contracts and contract management
• Procurement/sourcing
• Change management
• Conflict management
• Account team dynamics

It isn’t necessary to be an expert in these subjects, but VMI personnel must be able to talk with their peers intelligently. For example, a vendor manager needs to have a general background in contract terms and conditions to be able to discuss issues with legal, finance, procurement, and project management groups. A well-rounded and well-versed VMI team member can rise to the level of trusted advisor and internal strategic partner rather than wallowing in the operational or transactional world.

Step 3.9 – Expand professional knowledge

Understand finance and accounting basics

Finance and accounting terms and concepts are commonplace in every organization. They are the main language of business – they are the way for-profit businesses keep score. Regardless of whether your organization is a for-profit, non-profit, governmental, or other entity, finance and accounting run through the veins of your organization as well. In addition to the customer side of the equation, there is the vendor side of the equation: Every vendor you deal with will be impacted financially by working with you.

Having a good grasp of finance and accounting terms and concepts will improve your ability to negotiate, talk to finance and accounting personnel (internal and external), conduct ongoing due diligence on your critical vendors, review contracts, and evaluate vendor options, to name just a few of the benefits.

The concepts listed on the following pages are some of the common terms applicable to finance and accounting. It is not intended to be an exhaustive list. Continue to learn about these concepts and identify others that allow you to grow professionally.

Step 3.9 – Expand professional knowledge

Understand finance and accounting basics (continued)

Finance and accounting terms and concepts

• Cash accounting vs. accrual accounting.
• Fiscal year vs. calendar year.
• Profit vs. cash flow.
• Fixed expenses vs. variable expenses.
• Capital expense (CapEx) vs. operating expense (OpEx).
• Depreciation vs. amortization.
• Payment upfront vs. payment in arrears.
• Favorable (positive) variance vs. unfavorable (negative) variance.
• Discretionary expense (cost/expenditure) vs. non-discretionary expense (cost/expenditure).
• Income statement and its components.
• Balance sheet and its components.

Step 3.9 – Expand professional knowledge

Understand finance and accounting basics (continued)

Step 3.9 – Expand professional knowledge

Understand project management basics

Whether your organization has a formal project management office (PMO) or not, project management practices are being used by those tasked with making sure software and software as a service implementations go smoothly, technology refreshes are rolled out without a hitch, and other major activities are successful. Listed below are some common competencies/skills used by project managers to make sure the job gets done right. Requirements – define the project’s goals, objectives, and requirements. Scope – develop, monitor, and manage the project’s scope. Time – develop and manage the timeline and determine the order (parallel and sequential) for the tasks and activities. Budget – create and manage the project budget and report on any variances. Resources – manage space, people, software, equipment, services, etc. Risk – identify, evaluate, monitor, and manage project risk. Change – manage updated requirements, changes to the scope, and modifications to the contract. Documentation – work with the project charter, open issue logs, meeting minutes, and various reports. Communication – communicate with vendor personnel and internal personnel, including stakeholders and executives as needed. Quality – ensure the deliverables and other work are acceptable and coordinate/conduct acceptance tests.

Step 3.9 – Expand professional knowledge

Understand project management basics (continued)

1 nTask, 2019. 2 Whiz Labs, 2018.

Step 3.9 – Expand professional knowledge

Understand contracts and contract lifecycle management basics

Contracts and contract lifecycle management (CLM) are two separate but related topics. It is possible to have contracts without a formal CLM process, but you can’t have CLM without contracts. This portion of step 3.9 provides some general background on each topic and points you to blueprints that cover each subject in more detail.

IT contracts tend to be more complicated than other types of contracts due to intellectual property (IP) rights being associated with most IT contracts. As a result, it is necessary to have a basic understanding of IP and common IT contract provisions.

There are four main areas of IP: copyrights, patents, trademarks, and trade secrets. Each has its own nuances, and people who don’t work with IP often mistake one for another or use the terms interchangeably. They are not interchangeable, and each affords a different type of protection when available (e.g. something may not be capable of being patented, but it can be copyrighted).

For contract terms and conditions, vendor managers are best served by understanding both the business side and the legal side of the provisions. In addition, a good contract checklist will act as a memory jogger whether you are reviewing a contract or discussing one with legal or a vendor. For more information on contract provisions, checklists, and playbooks, download the Info-Tech blueprints identified to the left.

Download the Info-Tech blueprint Understand Common IT Contract Provisions to Negotiate More Effectively

Download the Info-Tech blueprint Improve Your Statements of Work to Hold Your Vendors Accountable

Step 3.9 – Expand professional knowledge

Understand contracts and contract lifecycle management basics (continued)

CLM is a process that helps you manage your agreements from cradle to grave. A robust CLM process eases the challenges of managing hundreds or even thousands of contracts that affect the day-to-day business and could expose your organization to various types of vendor-related risk.

Managing a few contracts through the contracting process is easy, but as the number of contracts grows, managing each step of the process for each contract becomes increasingly difficult and time consuming. That’s where CLM and CLM tools can help. Here is a high-level overview of the CLM process:

1. Request – a request for a contract is initiated.
2. Create contract – the contract is drafted by the customer or provided by the vendor.
3. Review risk – areas of risk in the contract are identified.
4. Approve – base agreement and attachments are approved and readied for negotiations.
5. Negotiate – the agreement is negotiated and finalized.
6. Sign – the agreement is signed or executed by the parties.
7. Capture – the agreement is stored in a centralized repository.
8. Manage – actively manage the operational and commitment aspects of the agreement.
9. Monitor compliance – ensure that each party is honoring and complying with its obligations.
10. Optimize – review the process and the contracts for potential improvements.

For more information on CLM, download the Info-Tech blueprint identified to the left.

Download the Info-Tech Blueprint Design and Build an Effective Contract Lifecycle Management Process

Step 3.9 – Expand professional knowledge

Understand procurement/sourcing basics

Almost every organization has a procurement or sourcing department. Procurement/sourcing is often the gatekeeper of the processes used to buy equipment and services, lease equipment, license software, and acquire other items. There are many different types of procurement/sourcing departments and several points of maturity within each type. As a result, the general terms listed on the next page may or may not be applicable within your organization. (Or your organization may not have a procurement/sourcing department at all!)

Identifying your organization’s procurement/sourcing structure is the best place to start. From there, you can determine which terms are applicable in your environment and dive deeper on the appropriate concepts as needed.

Step 3.9 – Expand professional knowledge

Understand procurement/sourcing basics (continued)

Step 3.9 – Expand professional knowledge

Understand conflict management basics

Whether you consider conflict management a skill, knowledge, or something in between, there is no denying that vendor managers are often engaged to resolve conflicts and disputes. At times, the VMI will be a “disinterested third party,” sitting somewhere between the vendor and an internal department, line of business, agency, or other functional designation. The VMI also may be one of the parties involved in the dispute or conflict. As a result, a little knowledge and a push in the right direction will help you learn more about how to handle situations where two parties don’t agree.

To begin with, there are four levels of “formal” dispute resolution. You may be intimately aware of all of them or only have cursory knowledge of how they work and the purpose they serve:

• Negotiation
• Mediation
• Arbitration
• Litigation

Their use often can be controlled or limited either contractually or by your organization’s preferences. They may be exclusive or used in combination with one another (e.g. negotiation first, and if things aren’t resolved, arbitration). Look at your contracts and legal department for guidance. It’s important to understand when and how these tools are used and what is expected (if anything) from the VMI.

Step 3.9 – Expand professional knowledge

Understand conflict management basics (continued)

Another factor in the conflict management and informal dispute resolution process is the people component. Perhaps the most famous or well-known model on this topic is the Thomas-Kilmann conflict resolution model. It attempts to bring clarity to the five different personality types you may encounter when resolving differences. As the graphic indicates, it is not purely a black-and-white endeavor; it is comprised of various shades of grey. The framework presented by Mr. Thomas and Mr. Kilmann provides insights into how people behave and how to engage them based on personality characteristics and attributes. The model sorts people into one of five categories: Avoiders. Competitors. Collaborators. Accommodators. Compromisers. Although it is not an absolute science since people are unpredictable at times, the Thomas-Kilmann model provides great insights into human behavior and ways to work with the personality types listed.

*Kilmann Diagnostics, 2018.

Step 3.9 – Expand professional knowledge

Understand conflict management basics (continued)

Although the topic is vastly greater than being presented here, the last consideration is a sound process to follow when the conflict or dispute will be handled informally (at least to start). The simple process presented below works with vendors, but it can be adapted to work with internal disputes as well. The following process assumes that the VMI is attempting to facilitate a dispute between an internal party and a vendor.

Step 1. Validate the person and the issue being brought to you; don’t discount the person, their belief, or their issue. Show genuine interest and concern.

Step 2. Gather and verify data; not all issues brought forward can be pursued or pursued as presented. For example, “The vendor is always late with its reports” may or may not be 100% accurate as presented.

Step 3. Convert data gathered into useful and relatable information. To continue the prior example, you may find that the vendor was late with the reports on specified dates, and this can be converted into “the vendor was late with its reports 50% of the time during the last three months.”

Step 3.9 – Expand professional knowledge

Understand conflict management basics (continued)

Step 4. Escalate findings internally to the appropriate stakeholders and executives as necessary so they are not blindsided if a vendor complains or goes around you and the process. In addition, they may want to get involved if it is a big issue, or they may tell you to get rid of it if it is a small issue.

Step 5. Engage the vendor once you have your facts and present the issues without judgment. Ask the vendor to do its own fact gathering.

Step 6. Schedule a meeting to review of the situation and hear the vendor’s version of the facts…they may align, or they may not.

Step 7. Resolve any differences between your facts/information and the vendor’s. There may be extenuating circumstances, oversights, different data, or other items that come to light.

Step 8. Attempt to resolve the problem and prevent further occurrences through root cause analysis and collaborative problem-solving techniques.

Develop your own process and make sure it stays neutral. The process should not put the vendor (or any party) on the defensive. The process is to help the parties reach resolution…not to assign blame.

Step 3.9 – Expand professional knowledge

Understand account team management basics

Working with the account or sales team from your critical vendors can be challenging. A basic understanding of account team operations and customer/vendor dynamics will go a long way to improving your interactions (and even vendor performance) over time.

Sales basics

• Salespeople are typically paid a base salary and a commission on each sale.
• Salespeople have quotas that must be met; failure to meet the quota results in probation (at a minimum) or termination.
• Salespeople sell what they are motivated to sell; the motivation comes in the way of contests, commissions, and recognition. The commission structure is not the same for every service or product sold by the vendor. In addition, incentives may be created to move old product, overstock, or new product (to name a few).
• Salespeople have multiple goals when interacting with customers:
  • Sell
  • Gather information
  • Build a relationship
  • Get a reference
  • Obtain a reference
  • Increase the vendor’s footprint

Step 3.9 – Expand professional knowledge

Understand account team management basics (continued)

Improving sales and account team dynamics with your organization

• Conduct due diligence on your account team. Are they “qualified” to work with your account?
• Set expectations with the account team for the ongoing relationship. Don’t leave it to chance.
• Evaluate the sales and account teams at least annually. Get feedback from those who work closely with the salespeople and account managers, including stakeholders and executives.
• Educate people internally about the sales process. At a minimum, counsel them to avoid giving away leverage, answering “damaging” questions, and disclosing confidential information.
• Try to get involved early in the sales cycle. Sell your value to internal personnel.
• Work to convert your account manager into your champion within the vendor. The salesperson can benefit by going to bat for you even though they work for the vendor. The commission structure often creates a split loyalty issue. Capitalize on it!
• Watch out for high turnover. This can indicate a problem at the vendor OR your account is not that attractive/profitable. (See steps 2.2 and 3.1 regarding customer positioning.)

Step 3.9 – Expand professional knowledge

Understand account team management basics (continued)

Improving sales and account team dynamics with your organization (continued)

• Support effective sales reps by educating them on your organization, the best way to work with you, and the benefits of working with your processes. If they do something above and beyond, consider sending them a thank-you and copying their boss. Little things go a long way.
• Control the sales process. Require qualified people from your organization to be invited to meetings; require an agenda for those meetings; and avoid “surprise” meetings (those meetings with limited notice and no agenda… "My boss is in town today, and I wanted to stop by and introduce her to you").
• Don’t be afraid to request a new account manager. For your critical vendors, you should always be dealing with competent account teams. They should have the requisite knowledge of their products and services to be able to answer basic through intermediate questions; they should be ethical; and they should be responsive.
• Build relationships beyond the salesperson or account manager. Develop a network that extends throughout the sales organization. (For example, the sales manager, sales director, and sales vice president at a minimum.) These people generally have more sway within the vendor organization and can get things done when the need arises.

For more information on this topic, download the Info-Tech blueprint Evaluate Your Vendor Account Team to Optimize Vendor Relations.

Step 3.10 – Create brand awareness

Determine whether a brand makes sense for the VMI

Branding isn’t just for companies. It is for departments (or whatever you call them at your place of employment) and individuals working in those departments. With a little work and even less money, you can create a meaningful brand for the VMI. While you are at it, you may want to encourage the VMI’s team members to focus a little attention on their personal brands since the VMI and its personnel are intertwined. First, let's define “brand.”

Ask 50 people, “How do you define ‘brand’?” and you are likely to get 50 different answers. For the purposes of this blueprint, the following definition provides some guiderails by describing what a brand is and isn’t: “A brand is not a logo. A brand is not an identity. A brand is not a product. A brand is a person’s gut feeling about a product, service, or organization.”1 Let’s expand the definition of “a brand is…” to include departments and individuals since that’s the focus of this step, and it doesn’t violate the spirit of the original definition. A further expansion could include the goodwill associated with the product, service, organization, department, or individual.

Dedicating time and other resources to proactively creating and nurturing the VMI’s brand has many advantages:

• “If you don’t define your brand, others will.”2 This is your chance to define the VMI’s narrative and influence the perception others have of it.
• It allows VMI team members to feel connected to the VMI’s vision and goals during their day-to-day activities.
• It helps form an emotional connection between the VMI and your internal “clients.”
• “Branding is a way of establishing and consistently reinforcing who you are and what you [do]…”2 Your brand helps you promote the VMI’s value and impact.

1 Emotive Brand, 2019. 2 Forbes, 2018.

Step 3.10 – Create brand awareness

Establish the VMI’s brand and monitor it

As you embark on creating a brand for the VMI and raising awareness, here are a few considerations to keep in mind:

• Identify your mission.* Review the VMI’s mission statement and goals. Translate them into statements that connect with your internal clients.
• Establish your unique value proposition.* What does the VMI provide to your internal clients that would make them go out of their way to use your services? How can you help them in ways others can’t?
• Create your brand’s visual identity.* Can you create a logo for the VMI? Can you provide a consistent look and feel for the reports you generate and information you provide?
• Increase brand recognition.* It takes time to build trust and establish a reputation. The same is true of creating a brand and increasing its recognition. Develop a plan for this rather than leaving it to chance.
• Be consistent. Make sure your brand is consistent with the organization’s brand or at least doesn’t contradict it. The VMI’s brand is based on its values, mission, goals, and other items; these should complement the organization’s values, mission, goals, and other items.
• Spread the word. Attend internal clients’ staff meetings, conduct lunch & learn sessions, send out a newsletter to ensure that your internal clients know who you are, what you do, and the impact you can make or have made. Make personal connections whenever possible.
• Monitor your brand. It is not enough to create a brand and turn it loose unsupervised. Seek feedback on the VMI and its brand beyond the internal survey (step 3.11), and adjust your brand periodically as needed.

* Stevens & Tate, 2019.

Step 3.10 – Create brand awareness

Enhance the brand of VMI team members

As previously mentioned, brands are for individuals as well. In fact, everybody has a brand associated with them…for better or worse...whether they have consciously created and molded it or not. Focusing on the individual brand at this point offers the VMI and its team members the opportunity to enhance the brand for both. After all, the VMI is a reflection of its personnel.

Here are some things VMI team members can do to enhance their brand:

• Network internally beyond your immediate team.1 Get to know people and build relationships with others even if you don’t work directly or indirectly with them.
• Say yes to relevant opportunities.1 Volunteer for projects where you can make an impact and let others see your value; it’s also a good way to build relationships beyond your immediate team.
• Speak at a conference. According to Jeff Butler (author and TEDx speaker), “Speaking gets you that immediate credibility not only internally but also externally where other companies are now seeing you as an expert.” He also states that “speaking at … conferences is not only good for you but also good for your [organization].”1
• Share your voice.1 Become a resource for bloggers, authors, and podcasters; consider blogging, writing, and podcasting. Remember not to disclose any proprietary or confidential information, though! Work with your legal and marketing departments before embarking on this path.
• Set goals and monitor your progress. Track the number of times you are asked to speak or contribute to a blog, podcast, event, or article, and track the number of times you are mentioned or referenced in social media, blogs, articles, and podcasts.2

1 Forbes, 2018. 2 Oberlo, 2022.

3.10.1 – Create brand awareness

30 – 90 Minutes

1. Meet with the participants to review the information in Elevate – Tools and Templates Compendium – Tab 3.10. The worksheet is divided into two parts.
1. Part 1 is for the VMI to use to create a brand, and
2. Part 2 is for an individual VMI team member to create a brand.
2. For Part 1, work as a team to answer the questions to begin identifying components of your brand awareness and building a strategy for the VMI's brand.
3. For Part 2, individuals can work by themselves or with the team leader to answer the questions and set goals to help build an individual brand (if it is desirable).

Download the Info-Tech Elevate - Tools and Templates Compendium

Step 3.11 – Survey internal clients

Gain insights and feedback from internal sources

As you deploy your surveys, timing must be considered. For annual surveys, avoid busy seasons such as mid to late December (especially if your organization’s fiscal year is a calendar year). Give people time to recover from any November holidays, and survey them before they become distracted by December holidays (if possible). You may want to push the annual survey until January or February when things have settled back into a normal routine. Your needs for timing and obtaining the results must be balanced against the time constraints and other issues facing the potential respondents.

For recency surveys, timing can work to your advantage or disadvantage. Send the survey almost immediately after providing assistance. If you wait more than a week or two, memories will begin to fade, and the results will trend toward the middle of the road.

Regardless of whether it is an annual survey or a recency survey, distributing the surveys to a big enough sample size will be tough. Combine that with low response rates and the results may be skewed. Take what you can get and look for trends over time. Some people may be tough critics; if possible, send the survey to the same people (and incorporate new ones) to see if the tough graders’ responses are remaining true over time. Another way to mitigate some of the tough critics is to review their answers to the open-ended questions. For example, a tough grader may respond with a “4 – helpful” when you were expecting a “5 – very helpful;” the narrative portion of the survey may be consistent with that answer, or it may provide what you were looking for: “The VMI was great to work with on this project.” When confined to a scale, some respondents won’t give the top value/assessment no matter what, but they will sing your praises in a question that requires a narrative response. Taken together, you may get a slightly different picture – one that often favors you.

Step 3.11 – Survey internal clients

Gain insights and feedback from internal sources (continued)

After you have received a few responses to your surveys (recency and annual), review the results against your expectations and follow up with some of the respondents. Were the questions clear? Were the answer choices appropriate? Ultimately, you have to decide if the survey provided the meaningful feedback you were looking for. If not, revise the questions and answers choices as needed. (Keep in mind, you are not looking for “feelgood fluff.” You are looking for feedback that will reinforce what you are doing well and show areas for improvement.) Once you have the results, it’s time to share them with the executives and stakeholders. When creating a report, consider the following guidance: Don’t just list the data; convert it to usable information. When needed, provide some context and interpretation for the results. For example, if you have an internal goal or service level, indicate this and show how the results compare to the target (e.g. in a bar chart, insert a horizontal line and label it “target”). Present the results on a question-by-question basis, but you may want to combine or aggregate results to provide meaningful information. For example, combine 21% responding with “doing a great job” and 62% responding with “doing a good job” into one statement of “83% of those surveyed said the VMI is doing a good job or doing a great job.” Use an executive summary as an overview or to highlight the key findings, with the detailed data and information on subsequent pages for people who want to dive deeper.

Step 3.12 – Calculate VMI ROI

Identify and report the VMI’s value and impact on the organization

Calculating ROI begins with establishing baselines: what is the current situation? Once those are established, you can begin tracking the impact made by the VMI by looking at the differences between the baseline and the end result. For example, if the VMI is tracking money saved, it is critical to know the baseline amounts (e.g. the initial quote from the vendor, the budgeted amount). If time is being measured, it is important to understand how much time was previously spent on items (e.g. vendor meetings to address concerns, RFPs).

The blueprint Capture and Market the ROI of Your VMO will lead you through the process, but there are a couple of key things to remember: 1) some results will be quick and easy – the low-hanging fruit, things that have been ignored or not done well, eliminating waste, and streamlining inefficiencies; and 2) other things may take time to come to fruition. Be patient and make sure you work with finance or others to bring credibility to your calculations.

When reporting the ROI, remember to include the results of the survey from step 3.11. They are not always quantifiable, but they help executives and stakeholders see the complete picture, and the stories or examples make the ROI “personal” to the organization.

Reporting can be a challenge. VMIs often underestimate their value and don’t like self-promotion. While you don’t want to feel like you operate in justification mode, many eyes will be on the VMI. The ROI report helps validate and promote the VMI, and it helps build brand awareness for the VMI.

Step 3.13 – Implement vendor recognition program

Set your plan in motion

As indicated in step 2.10, take a “crawl, walk, run” approach to your vendor recognition program. Start off small and grow the program over time. Based on the scope of the program, decide how you’ll announce and promote it. Work with marketing, IT, and others to ensure a consistent message, to leverage technology (e.g. your website), and to maximize awareness.

For a formal program, you may want to hold a kickoff meeting to introduce the program internally and externally. The external kickoff can be handled in a variety of ways depending on available resources and the extent of the program. For example, a video can be produced and shared with eligible vendors, an email from the VMI or an executive can be used, or the program can be rolled out through BAMs if only BAM participants are eligible for the program. If you are taking an informal approach to the vendor recognition program, you may not need an external kickoff at all.

For a formal program, collect information periodically throughout the year rather than waiting until the end of the year; however, some data may not be available or relevant until the end of the measurement period. For subjective criteria, the issue of recency may be an issue, and memories will fade over time. (Be careful the subjective portion doesn’t turn into a popularity contest.)

If the vendor recognition program is not meeting your goals adequately, don’t be afraid to modify it or even scrap it. At some point, you may have to do a partial or total reboot of the program. Creating and maintaining a “lessons learned” document will make a reboot easier and better if it is necessary. Remember: While a vendor recognition program has many potential benefits, your main goals must be achieved or the program adds little or no value.

Phase 4 - Review

Ensure Your VMI Continues to Evolve

This phase will walk you through the following activities:

This phase helps the VMI stay aligned with the overall organization, stay current, and improve its strategic value as it evolves. The main outcomes from this phase are ways to advance the VMI’s strategic impact.

This phase involves the following participants:

• VMI team
• Applicable stakeholders and executives
• Others as needed

Phase 4 – Review

Continue evolving the VMI and keep it up to date

The emphasis of this final phase is on the VMI’s continued evolution.

• First up is the concept of alliances. For a small number of vendors, your relationship has the ability to transcend to a different level. A collaborative, synergistic relationship can be achieved under the right circumstances.
• Next, additional material on transforming the VMI from purely transactional to strategic is provided (along with some reminders from prior phases). To reach its full potential, the VMI must mature and evolve, but this won’t happen without the active management of a well-crafted plan. What got the VMI to this point won’t necessarily work to get you to the next point on the evolution scale.
• Lastly, remember to stay vigilant about the review process. What is the VMI doing well? Where can it improve? What needs to change?

Step 4.1 – Investigate potential alliances

Understand what separates an alliance from a regular relationship

Chances are you’ve seen a marketing or business alliance at work in your personal life. If you’ve visited a Target store or a Barnes and Noble store, you’ve more than likely walked past the Starbucks counter. The relationship is about more than the landlord-tenant agreement, and the same business concept can exist in non-retail settings. Although they may not be as common in the customer-IT vendor space, alliances can work here as well.

Definition

For vendor management purposes, an alliance is a symbiotic relationship between two parties where both benefit beyond the traditional transactional (i.e. buyer-seller) relationship.

Characteristics

• Each party remains independent; this is not a true partnership or joint venture from a legal perspective.
• Each party obtains benefits they wouldn’t be able to obtain by themselves (or, at a minimum, the timeline is accelerated significantly).
• The relationship is geared toward the long term, and each party contributes resources to achieve synergies.

Step 4.1 – Investigate potential alliances

Analyze benefits and risks for the alliance

Benefits

• Synergies
• Innovations
• Use of pooled resources
• Access to different areas of expertise
• Quicker development or improvement of products or services
• Competitive advantages, new revenue streams, and new markets

Risks

• Cultural fit
• Departing executives/sponsors
• Return on investment pressures
• Different interests or expectations
• Failure to address intellectual property issues adequately
• Lack of experience and process to manage the relationship

Step 4.1 – Investigate potential alliances

Set up the alliance for success

Keys to success

• Communicate transparently.
• Ensure executive participation from both parties.
• Establish a joint steering committee and alliance governances.
• Set clear expectations and define what each party wants out of the alliance.
• Create “alliance managers” in addition to vendor managers and project mangers.
• Start with a small alliance; don’t go all-in on a big alliance the first time you try it.
• Create an environment of trust and collaboration; the alliance goes beyond the contract.
• Make sure both parties are happy with their contributions to and rewards from the alliance.

The purpose of this step is not to make you an expert on alliances or to encourage you to rush out of your office, cubicle, bedroom, or other workspace looking for opportunities. The purpose is to familiarize you with the concepts, to encourage you to keep your eyes open, and to think about relationships from different angles. How will you make the most of your vendors’ expertise, resources, market, and other things they bring to the table?

Step 4.2 – Continue increasing the VMI’s strategic value

Grow the VMI’s impact over time

Although they are not synonymous concepts, increasing the VMI’s maturity and increasing the VMI’s strategic value can go hand in hand. Evolving the VMI to be strategic allows the organization to receive the greatest benefit for its investment. This isn’t to say that all work the VMI does will be strategic. It will always live in two places – the transactional world and the strategic world – even when it is fully mature and operating strategically. Just like any job, there are transactional tasks and activities that must be done, and some of them are foundational elements for being strategic (e.g. conducting research, preparing reports, and classifying vendors). The VMI must evolve and become strategic for many reasons: staying in the transactional world limits the VMI’s contributions, results, influence and impact; team members will have less job satisfaction and enjoyment and lower salaries; ultimately, the justification for the VMI could disappear.

To enhance the VMI’s (and, as applicable, its personnel’s) strategic value, continue:

• Maturing the VMI and its personnel.
• Building relationships internally and with the critical vendors (typically, high operational, high tactical, and strategic vendors under the COST model and valued and principal vendors under the MVP model).
• Increasing your knowledge about vendor management and your critical vendors and their industries.
• Saying yes to opportunities or volunteering for cross-functional teams that allow the VMI to showcase its abilities.
• Increasing your knowledge of your organization, how it operates, the political environment, and anything else that will help the VMI provide information, insight, and guidance.
• Learning about your industry and competitors (if applicable).

Step 4.2 – Continue increasing the VMI’s strategic value

Shift from transactional to strategic as much as possible

Step 4.3 – Review and update

Tap into the collective wisdom and experience of your team members

The vendor management lifecycle is continuous and more chaotic than linear, but the chaos mostly stays within the boundaries of the “plan, build, run, and review” framework outlined in this blueprint and the blueprint Jump Start Your Vendor Management Initiative. Two of the goals of managing the lifecycle are: 1) to adapt to a changing world; and 2) to improve the VMI and its impact over time. To do this, keep following the guidance in this phase, but don’t forget about the direction provided in phase 4 of the blueprint Jump Start Your Vendor Management Initiative:

• Review and assess compliance.
• Compile and leverage lessons learned.
• Focus on maintaining alignment internally.
• Identify and incorporate leading practices.
• Update governances.

Info-Tech Insight

Continue reviewing and updating the VMI’s risk footprint. Add risk categories and scope as needed (measurement, monitoring, and reporting). Review Info-Tech’s vendor management-based series of risk blueprints for further information (Identify and Manage Reputational Risk Impacts on Your Organization and others).

Summary of Accomplishment

Problem Solved

It is easy for business owners to lose sight of things. There is a saying among entrepreneurs about remembering to work on the business rather than working exclusively in the business. For many entrepreneurs, it is easy to get lost in the day-to-day grind and to forget to look at the bigger picture. A VMI is like a business in that regard – it is easy to focus on the transactional work and lose sight of maturing or evolving the VMI. Don’t let this happen!

Leverage the tools and templates from this blueprint and adapt them to your environment as needed. Unlike the blueprint Jump Start Your Vendor Management Initiative, some of the concepts presented here may take more time, resources, and evolution before you are ready to deploy them. Continue using the three-year roadmap and 90-day plans from the Jump Start Your Vendor Management Initiative blueprint, and add components from this blueprint when the time is right. The two blueprints are designed to work in concert as you move forward on your VMI journey.

Lastly, focus on getting a little better each day, week, month, or year: better processes, better policies and procedures, better relationships with vendors, better relationships with internal clients, better planning, better anticipation, better research, better skills, competencies, and knowledge for team members, better communication, better value, and better impact. A little “better” goes a long way, and over time it becomes a lot better.

If you would like additional support, have our analysts guide you through other phases as part of an Info-Tech workshop.

Contact your account representative for more information.

workshops@infotech.com

1-888-670-8889

Related Info-Tech Research

Jump Start Your Vendor Management Initiative

IT (and the organization as a whole) are more reliant on vendors than ever before, and vendor management has become increasingly necessary to manage the relationships and manage the risks. Implementing a vendor management initiative is no longer a luxury...it is a necessity.

Capture and Market the ROI of Your VMO

Calculating the impact or value of a vendor management office (VMO) can be difficult without the right framework and tools. Let Info-Tech’s tools and templates help you account for the contributions made by your VMO.

Evaluate Your Vendor Account Team to Optimize Vendor Relations

Understanding your vendor team’s background, experience, and strategic approach to your account is key to the management of the relationship, the success of the vendor agreement, and, depending on the vendor, the success of your business.

Identify and Manage Financial Risk Impacts on Your Organization

Vendors’ failure to perform, including security and compliance violations, can have significant financial consequences. Good vendor management practices help organizations understand the costs of those actions.

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Mature and Scale Product Ownership

Strengthen the product owner’s role in your organization by focusing on core capabilities and proper alignment.

Executive Brief

Analyst Perspective

Empower product owners throughout your organization.

Whether you manage a product or service, the fundamentals of good product ownership are the same. Organizations need to focus on three key elements of product ownership in order to be successful.

• Create an environment of empowerment and service leadership to reinforce product owners and product family managers as the true owners of the vision, improvement, and realized the value of their products.
• Align product and product family owner roles based on operational alignment and the groups defined when scaling product management.
• Develop your product owners to improve the quality of roadmaps, alignment to enterprise goals, and profit and loss (P&L) for each product or service.

By focusing the attention of the teammates serving in product owner or service owner roles, your organization will deliver value sooner and respond to change more effectively.

Hans Eckman

Principal Research Director – Application Delivery and Management
Info-Tech Research Group

Executive Summary

Info-Tech Insight

There is no single correct approach to product ownership. Product ownership must be tuned and structured to meet the delivery needs of your organization and the teams it serves.

Info-Tech’s Approach

Product owners make the final decision

• Establish a foundation for empowerment and success
• Assign product owners and align with products and stakeholders
• Mature product owner capabilities and skills

The Info-Tech difference

1. Assign product owners where product decisions are needed, not to match org charts or delivery teams. The product owner has the final word on product decisions.
2. Organize product owners into related teams to ensure product capabilities delivered are aligned to enterprise strategy and goals.
3. Shared products and services must support the needs of many product owners with conflicting priorities. Shared service product owners must map and prioritize demand to align to enterprise priorities and goals.
4. All product owners share the same capability model.

Insight summary

There is no single correct approach to product ownership

Successful product management starts with empowerment and accountability. Product owners own the vision, roadmap, and value realization for their product or family aligned to enterprise goals and priorities.

Phase 1 insight

Product owners represent three primary perspectives: business (external-facing), technical (systems and tools), or operational (manual processes). Although all share the same capabilities, how they approach their responsibilities is influenced by their primary perspective.

Phase 2 insight

Start with your operational grouping of products and families, identifying where an owner is needed. Then, assign people to the products and families. The owner does not define the product or family.

Phase 3 insight

Product owners are operating under an incomplete understanding of the capabilities needed to succeed. Most product/service owners lack a complete picture of the needed capabilities, skills, and activities to successfully perform their roles.

Product and service ownership share the same foundation

The underlying capabilities and best practices to own and improve a product or service are identical for both roles. Use the terms that make the most sense for your culture.

Map product owner roles to your existing job titles

Identify where product management is needed and align expectations with existing roles. Successful product management does not require a dedicated job family.

Projects can be a mechanism for funding product changes and improvements

Projects within products

Regardless of whether you recognize yourself as a product-based or project-based shop, the same basic principles should apply.

You go through a period or periods of project-like development to build a version of an application or product.

You also have parallel services along with your project development, which encompass the more product-based view. These may range from basic support and maintenance to full-fledged strategy teams or services like sales and marketing.

Product and services owners share the same foundation and capabilities

For the purpose of this blueprint, product/service and product owner/service owner are used interchangeably. The term “product” is used for consistency but would apply to services, as well.

Product = Service

Common foundations: Focus on continuous improvement, ROI, and value realization. Clear vision, goals, roadmap, and backlog.

“Product” and “service” are terms that each organization needs to define to fit its culture and customers (internal and external). The most important aspect is consistent use and understanding of:

• External products
• Internal products
• External services
• Internal services
• Products as a service (PaaS)
• Productizing services (SaaS)

Recognize the product owner perspectives

Product owners represent one of three primary perspectives. Although all share the same capabilities, how they approach their responsibilities is influenced by their primary perspective.

Info-Tech Insight

Product owners must translate needs and constraints from their perspective into the language of their audience. Kathy Borneman, Digital Product Owner at SunTrust Bank, noted the challenges of finding a common language between lines of business and IT (e.g. what is a unit?).

Match your product management role definitions to your product family levels

Product ownership exists at the different operational tiers or levels in your product hierarchy. This does not imply a management relationship.

Product portfolio

Groups of product families within an overall value stream or capability grouping.

Project portfolio manager

Product family

A collection of related products. Products can be grouped along architectural, functional, operational, or experiential patterns.

Product family manager

Product

Single product composed of one or more applications and services.

Product owner

Info-Tech Insight

Define the current roles that will perform the product management function or define consistent role names to product owners and managers.

Align enterprise value through product families

Understand special circumstances

In Deliver Digital Products at Scale, products were grouped into families using Info-Tech’s five scaling patterns. Assigning owners to Enterprise Applications and Shared Services requires special consideration.

Value stream alignment

• Business architecture
  • Value stream
  • Capability
  • Function
• Market/customer segment
• Line of business (LoB)
• Example: Customer group > value stream > products

Enterprise applications

• Enabling capabilities
• Enterprise platforms
• Supporting apps
• Example: HR > Workday/Peoplesoft > Modules Supporting: Job board, healthcare administrator

Shared Services

• Organization of related services into service family
• Direct hierarchy does not necessarily exist within the family
• Examples: End-user support and ticketing, workflow and collaboration tools

Technical

• Domain grouping of IT infrastructure, platforms, apps, skills, or languages
• Often used in combination with Shared Services grouping or LoB-specific apps
• Examples: Java, .NET, low-code, database, network

Organizational alignment

• Used at higher levels of the organization where products are aligned under divisions
• Separation of product managers from organizational structure is no longer needed because the management team owns the product management role

Map sources of demand and influencers

Use the stakeholder analysis to define the key stakeholders and sources of demand for enterprise applications and shared services. Extend your mapping to include their stakeholders and influencers to uncover additional sources of demand and prioritization.

Info-Tech Insight

Your product owner map defines the influence landscape your product operates. It is every bit as important as the teams who enhance, support and operate your product directly.

Combine your product owner map with your stakeholder map to create a comprehensive view of influencers.

The primary value of the product owner is to fill the backlog with the highest ROI opportunities aligned with enterprise goals.

Info-Tech Insight

The product owner owns the direction of the product.

• Roadmap - Where are we going?
• Backlog - What changes are needed to get there?
• Product review - Did we get close enough?

Product delivery realizes value for your product family

While planning and analysis are done at the family level, work and delivery are done at the individual product level.

Product family owners are more strategic

When assigning resources, recognize that product family owners will need to be more strategic with their planning and alignment of child families and products.

Info-Tech Insight

Roadmaps for your product family are, by design, less detailed. This does not mean they aren’t actionable! Your product family roadmap should be able to communicate clear intentions around the future delivery of value in both the near and long term.

Connecting your product family roadmaps to product roadmaps

Your product and product family roadmaps should be connected at an artifact level that is common between both. Typically, this is done with capabilities, but it can be done at a more granular level if an understanding of capabilities isn’t available.

Develop a product owner stakeholder strategy

Stakeholders are a critical cornerstone to product ownership. They provide the context, alignment, and constraints that influence or control what a product owner can accomplish.

Product owners operate within a network of stakeholders who represent different perspectives within the organization.

First, product owners must identify members of their stakeholder network. Next, they should devise a strategy for managing stakeholders.

Without a stakeholder strategy, product owners will encounter obstacles, resistance, or unexpected changes.

Create a stakeholder network map to product roadmaps and prioritization

Follow the trail of breadcrumbs from your direct stakeholders to their influencers, to uncover hidden stakeholders.

Info-Tech Insight

Your stakeholder map defines the influence landscape your product operates. It is every bit as important as the teams who enhance, support and operate your product directly.

Use “connectors” to determine who may be influencing your direct stakeholders. They may not have any formal authority within the organization, but they may have informal yet substantive relationships with your stakeholders.

Being successful at Agile is more than about just doing Agile

The following represents the hard skills needed to “Do Agile”:

• Engineering skills. These are the skills and competencies required for building brand-new valuable software.
• Technician skills. These are the skills and competencies required for maintaining and operating the software delivered to stakeholders.
• Framework/Process skills. These are the specific knowledge skills required to support engineering or technician skills.
• Tools skills. This represents the software that helps you deliver other software.

While these are important, they are not the whole story. To effectively deliver software, we believe in the importance of being Agile over simply doing Agile.

Adapted from: “Doing Agile” Is Only Part of the Software Delivery Pie

Why focus on core skills?

They are the foundation to achieve business outcomes

The right skills development is only possible with proper assessment and alignment against outcomes.

Focus on these real Agile skills

Agile skills

• Accountability
• Collaboration
• Comfort with ambiguity
• Communication
• Empathy
• Facilitation
• Functional decomposition
• Initiative
• Process discipline
• Resilience

Product capabilities deliver value

As a product owner, you are responsible for managing these facets through your capabilities and activities.

Info-Tech Best Practice

It is easy to lose sight of what matters when we look at a product from a single point of view. Despite what "The Agile Manifesto" says, working software is not valuable without the knowledge and support that people need in order to adopt, use, and maintain it. If you build it, they will not come. Product owners must consider the needs of all stakeholders when designing and building products.

Recognize product owner knowledge gaps

Pulse survey of product owners

Info-Tech Insight

1. Less than 15% of respondents identified analytics or financial management as a key component of product ownership.
2. Assess your product owner’s capabilities and understanding to develop a maturity plan.

Source: Pulse Survey (N=18)

Implement the Info-Tech product owner capability model

Unfortunately, most product owners operate with incomplete knowledge of the skills and capabilities needed to perform the role. Common gaps include focusing only on product backlogs, acting as a proxy for product decisions, and ignoring the need for key performance indicators (KPIs) and analytics in both planning and value realization.

Vision

• Market Analysis
• Business Alignment
• Product Roadmap

Leadership

• Soft Skills
• Collaboration
• Decision Making

Product Lifecycle Management

• Plan
• Build
• Run

Value Realization

• KPIs
• Financial Management
• Business Model

Product owner capabilities provide support

Your vision informs and aligns what goals and capabilities are needed to fulfill your product or product family vision and align with enterprise goals and priorities. Each item on your roadmap should have corresponding KPIs or OKRs to know how far you moved the value needle. Value realization measures how well you met your target, as well as the impacts on your business value canvas and cost model.

Your leadership skills improve collaborations and decisions when working with your stakeholders and product delivery teams. This builds trust and improves continued improvements to the entire product lifecycle. A product owner’s focus should always be on finding ways to improve value delivery.

Product owner capabilities provide support

Develop product owner capabilities

Avoid common capability gaps

Vision

• Focusing solely on backlog grooming (tactical only)
• Ignoring or failing to align product roadmap to enterprise goals
• Operational support and execution
• Basing decisions on opinion rather than market data
• Ignoring or missing internal and external threats to your product

Leadership

• Failing to include feedback from all teams who interact with your product
• Using a command-and-control approach
• Viewing product owner as only a delivery role
• Acting as a proxy for stakeholder decisions
• Avoiding tough strategic decisions in favor of easier tactical choices

Product lifecycle management

• Focusing on delivery and not the full product lifecycle
• Ignoring support, operations, and technical debt
• Failing to build knowledge management into the lifecycle
• Underestimating delivery capacity, capabilities, or commitment
• Assuming delivery stops at implementation

Value realization

• Focusing exclusively on “on time/on budget” metrics
• Failing to measure a 360-degree end-user view of the product
• Skipping business plans and financial models
• Limiting financial management to project/change budgets
• Ignoring market analysis for growth, penetration, and threats

Your product vision is your North Star

It's ok to dream a little!

Adapted from: Crossing the Chasm

Info-Tech Best Practice

A product vision shouldn’t be so far out that it doesn’t feel real or so short-term that it gets bogged down in minutiae and implementation details. Finding the right balance will take some trial and error and will be different for each organization.

Leverage the product canvas to state and inform your product vision

Define product value by aligning backlog delivery with roadmap goals

In each product plan, the backlogs show what you will deliver. Roadmaps identify when and in what order you will deliver value, capabilities, and goals.

Use a balanced value to establish a common definition of goals and value

Value drivers are strategic priorities aligned to our enterprise strategy and translated through our product families. Each product and change has an impact on the value driver helping us reach our enterprise goals.

Info-Tech Insight

Your value drivers and impact helps estimate the expected value of roadmap items, prioritize roadmap and backlog items, and identify KPIs and OKRs to measure value realization and actual impact.

Use CLAIM to guide your journey

Value is best created by self-managing teams who deliver in frequent, short increments supported by leaders who coach them through challenges.

Product-centric delivery and Agile are a radical change in how people work and think. Structured, facilitated learning is required throughout the transformation to help leaders and practitioners make the shift.

Product management, Agile, and DevOps have inspired SDLC tools that have become a key part of delivery practices and work management.

Self-organizing teams that cross business, delivery, and operations are essential to gain the full benefits of product-centric delivery.

Successful implementations require the disciplined use of metrics that support developing better teams

Communicate reasons for changes and how they will be implemented

Leaders of successful change spend considerable time developing a powerful change message; that is, a compelling narrative that articulates the desired end state, and that makes the change concrete and meaningful to staff.

The organizational change message should:

• Explain why the change is needed.
• Summarize what will stay the same.
• Highlight what will be left behind.
• Emphasize what is being changed.
• Explain how the change will be implemented.
• Address how change will affect various roles in the organization.
• Discuss the staff’s role in making the change successful.

Info-Tech’s methodology for mature and scale product ownership

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals.

Key deliverable

Mature and Scale Product Ownership Playbook

Capture and organize the outcomes of the activities in the workbook.

Mature and Scale Product Ownership Workbook

The workbook helps organize and communicate the outcomes of each activity.

Mature and Scale Product Ownership Readiness Assessment

Determine your level of mastery of real Agile skills and product owner capabilities.

Blueprint benefits

IT benefits

• Competent product owner who can support teams operating in any delivery methodology.
• Representative viewpoint and input from the technical and operational product owner perspectives.
• Products aligned to business needs and committed work are achievable.
• Single point of contact with a business representative.
• Acceptance of product owner role outside the Scrum teams.

Business benefits

• Better alignment to enterprise goals, vision, and outcomes.
• Improved coordination with stakeholders.
• Quantifiable value realization tied to vision.
• Product decisions made at the right time and with the right input.
• Product owner who has the appropriate business, operations, and technical knowledge.

Measure the value of this blueprint

Align product owner metrics to product delivery and value realization.

Info-Tech offers various levels of support to best suit your needs

DIY Toolkit

"Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful."

Guided Implementation

"Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track."

Workshop

"We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place."

Consulting

"Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project"

Diagnostics and consistent frameworks are used throughout all four options.

Guided Implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI is between 8 and 12 calls over the course of 4 to 6 months.

Workshop Overview

Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889

Related Info-Tech Research

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Deliver on Your Digital Product Vision

Build a product vision your organization can take from strategy through execution.

Deliver Digital Products at Scale

Deliver value at the scale of your organization through defining enterprise product families.

Build Your Agile Acceleration Roadmap

Quickly assess the state of your Agile readiness and plan your path forward to higher value realization.

Develop Your Agile Approach for a Successful Transformation

Understand Agile fundamentals, principles, and practices so you can apply them effectively in your organization.

Implement DevOps Practices That Work

Streamline business value delivery through the strategic adoption of DevOps practices.

Extend Agile Practices Beyond IT

Further the benefits of Agile by extending a scaled Agile framework to the business.

Build Your BizDevOps Playbook

Embrace a team sport culture built around continuous business-IT collaboration to deliver great products.

Embed Security Into the DevOps Pipeline

Shift security left to get into DevSecOps.

Spread Best Practices With an Agile Center of Excellence

Facilitate ongoing alignment between Agile teams and the business with a set of targeted service offerings.

Enable Organization-Wide Collaboration by Scaling Agile

Execute a disciplined approach to rolling out Agile methods in the organization.

Related Info-Tech Research

Application portfolio management

APM Research Center

See an overview of the APM journey and how we can support the pieces in this journey.

Application Portfolio Management Foundations

Ensure your application portfolio delivers the best possible return on investment.

Streamline Application Maintenance

Effective maintenance ensures the long-term value of your applications.

Streamline Application Management

Move beyond maintenance to ensuring exceptional value from your apps.

Build an Application Department Strategy

Delivering value starts with embracing what your department can do.

Embrace Business-Managed Applications

Empower the business to implement its own applications with a trusted business-IT relationship.

Optimize Applications Release Management

Facilitate ongoing alignment between Agile teams and the business with a set of targeted service offerings.

Related Info-Tech Research

Value, delivery metrics, estimation

Build a Value Measurement Framework

Focus product delivery on business value-driven outcomes.

Select and Use SDLC Metrics Effectively

Be careful what you ask for, because you will probably get it.

Application Portfolio Assessment: End User Feedback

Develop data-driven insights to help you decide which applications to retire, upgrade, re-train on, or maintain to meet the demands of the business.

Create a Holistic IT Dashboard

Mature your IT department by measuring what matters.

Refine Your Estimation Practices With Top-Down Allocations

Don’t let bad estimates ruin good work.

Estimate Software Delivery With Confidence

Commit to achievable software releases by grounding realistic expectations.

Reduce Time to Consensus With an Accelerated Business Case

Expand on the financial model to give your initiative momentum.

Optimize Project Intake, Approval, and Prioritization

Deliver more projects by giving yourself the voice to say “no” or “not yet” to new projects.

Enhance PPM Dashboards and Reports

Facilitate ongoing alignment between Agile teams and the business with a set of targeted service offerings.

Related Info-Tech Research

Organizational design and performance

Redesign Your IT Organizational Structure

Focus product delivery on business value-driven outcomes.

Build a Strategic Workforce Plan

Have the right people in the right place, at the right time.

Implement a New Organizational Structure

Reorganizations are inherently disruptive. Implement your new structure with minimal pain for staff while maintaining IT performance throughout the change.

Build an IT Employee Engagement Program

Don’t just measure engagement, act on it.

Set Meaningful Employee Performance Measures

Set holistic measures to inspire employee performance.

Phase 1

Establish the Foundation for Product Ownership

Mature and Scale Product Ownership

This phase will walk you through the following activities:

1.1.1 Define enablers and blockers of product management

1.1.2 Define your product management roles and names

1.1.3 Assess your product management readiness

1.2.1 Identify your primary product owner perspective

1.2.2 Define your product owner RACI

This phase involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Delivery managers
• Business analysts

Step 1.1

Establish an environment for product owner success

Activities

1.1.1 Define enablers and blockers of product management

1.1.2 Define your product management roles and names

1.1.3 Assess your product management readiness

Establish the foundation for product ownership

This step involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Delivery managers
• Business analysts

Outcomes of this step

• Enablers and blockers
• Role definitions

Empower product owners as the true owners of their product

Product ownership requires decision-making authority and accountability for the value realization from those decisions. POs are more than a proxy for stakeholders, aggregators for changes, and the communication of someone else’s priorities.

“A Product Owner in its most beneficial form acts like an Entrepreneur, like a 'mini-CEO'. The Product Owner is someone who really 'owns' the product.”

– Robbin Schuurman,
“Tips for Starting Technical Product Managers”

Info-Tech Best Practice

Implement Info-Tech’s Product Owner Capability Model to help empower and hold product owners accountable for the maturity and success of their product. The product owner must understand how their product fits into the organization’s mission and strategy in order to align to enterprise value.

Product and service owners share the same foundation and capabilities

For the purpose of this blueprint, product/service and product owner/service owner are used interchangeably. The term “product” is used for consistency but applies to services, as well.

Product = Service

Common foundations: Focus on continuous improvement, ROI, and value realization. Clear vision, goals, roadmap, and backlog.

“Product” and “service” are terms that each organization needs to define to fit its culture and customers (internal and external). The most important aspect is consistent use and understanding of:

• External products
• Internal products
• External services
• Internal services
• Products as a service (PaaS)
• Productizing services (SaaS)

Define product ownership to match your culture and customers

Characteristics of a discrete product:

• Has end users or consumers
• Delivers quantifiable value
• Evolves or changes over time
• Has predictable delivery
• Has definable boundaries
• Has a cost to produce and operate
• Has a discrete backlog and roadmap of improvements

What does not need a product owner?

• Individual features
• Transactions
• Unstructured data
• One-time solutions
• Non-repeatable processes
• Solutions that have no users or consumers
• People or teams

Info-Tech Insight

• Products are long-term endeavors that don’t end after the project finishes.
• Products mature and improve their ability to deliver value.
• Products have a discrete backlog of changes to improve the product itself, separate from operational requests fulfilled by the product or service.

Need help defining your products or services? Download our blueprint Deliver Digital Products at Scale.

Connect roadmaps to value realization with KPIs

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Info-Tech Insight

Every roadmap item should have an expected realized value once it is implemented. The associate KPIs or OKRs determine if our goal was met. Any gap in value feedback back into the roadmap and backlog refinement.

Identify the differences between a project-centric and a product-centric organization

Info-Tech Insight

Product delivery requires significant shifts in the way you complete development work and deliver value to your users. Make the changes that support improving end-user value and enterprise alignment.

Projects can be a mechanism for funding product changes and improvements

Projects withing products

Regardless of whether you recognize yourself as a product-based or project-based shop, the same basic principles should apply.

You go through a period or periods of project-like development to build a version of an application or product.

You also have parallel services along with your project development, which encompasses a more product-based view. These may range from basic support and maintenance to full-fledged strategy teams or services like sales and marketing.

Recognize common barriers to product management

The transition to product ownership is a series of behavioral and cultural changes supported by processes and governance. It takes time and consistency to be successful.

• Command and control structures
• Lack of ownership and accountability
• High instability in the market, demand, or organization
• Lack of dedicated teams align to delivery, service, or product areas
• Culture of one-off projects
• Lack of identified and engaged stakeholders
• Lack of customer exposure and knowledge

Agile’s four core values

“…while there is value in the items on the right, we value the items on the left more.”

Source: “The Agile Manifesto”

We value...

Exercise 1.1.1 Define enablers and blockers of product management

1 hour

1. Identify and mitigate blockers of product management in your organization.
2. What enablers will support strong product owners?
3. What blockers will make the transition to product management harder?
4. For each blocker, also define at least one mitigating step.

Output

• Enablers and blockers

Participants

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Capture in the Mature and Scale Product Ownership Playbook.

Align enterprise value through product families

Effective product delivery requires thinking about more than just a single product

Good application and product management begins with strengthening good practices for a single or small set of applications, products, and services.

Product portfolio

Groups of product families within an overall value stream or capability grouping.

Project portfolio manager

Product family

A collection of related products. Products can be grouped along architectural, functional, operational, or experiential patterns.

Product family manager

Product

Single product composed of one or more applications and services.

Product owner

Info-Tech Insight

Define the current roles that will perform the product management function or define consistent role names to product owners and managers.

Exercise 1.1.2 Define your product management roles and names

1-2 hour

1. Identify the roles in which product management activities will be owned.
2. Define a common set of role names and describe the role.
3. Map the level of accountability for each role: Product or Product Family
4. Product owner perspectives will be defined in the next step.

Output

• Role definitions

Participants

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Capture in the Mature and Scale Product Ownership Playbook.

Use CLAIM to guide your journey

Value is best created by self-managing teams who deliver in frequent, short increments supported by leaders who coach them through challenges.

Product-centric delivery and Agile are a radical change in how people work and think. Structured, facilitated learning is required throughout the transformation to help leaders and practitioners make the shift.

Product management, Agile, and DevOps have inspired SDLC tools that have become a key part of delivery practices and work management.

Self-organizing teams that cross business, delivery, and operations are essential to gain the full benefits of product-centric delivery.

Successful implementations require the disciplined use of metrics that support developing better teams

Exercise 1.1.3 Assess your product management readiness

1 hour

1. Open and complete the Mature and Scale Product Ownership Readiness Assessment in your Playbook or the provided Excel tool.
2. Discuss high and low scores for each area to reach a consensus.
3. Record your results in your Playbook.

Output

• Assessment of product management readiness based on Info-Tech’s CLAIM+G model.

Participants

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Capture in the Mature and Scale Product Ownership Readiness Assessment.

Communicate reasons for changes and how they will be implemented

Leaders of successful change spend considerable time developing a powerful change message; that is, a compelling narrative that articulates the desired end state, and that makes the change concrete and meaningful to staff.

The organizational change message should:

Step 1.2

Establish your product ownership model

Activities

1.2.1 Identify your primary product owner perspective

1.2.2 Define your product owner RACI

Establish the foundation for product ownership

This step involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Delivery managers
• Business analysts

Outcomes of this step

• Product owner perspective mapping
• Product owner RACI

Recognize the product owner perspectives

Product owners represent one of three primary perspectives. Although all share the same capabilities, how they approach their responsibilities is influenced by their primary perspective.

Info-Tech Best Practice

Product owners must translate needs and constraints from their perspective into the language of their audience. Kathy Borneman, Digital Product Owner at SunTrust Bank, noted the challenges of finding a common language between lines of business and IT (e.g. what is a unit?).

Identify and align to product owner perspectives to ensure product success

Product owner perspectives

1. Each product owner perspective provides important feedback, demand, and support for the product.
2. Where a perspective is represented by a distinct role, the perspective is managed with that product owner.
3. If separate roles don’t exist, the product owner must evaluate their work using two or three perspectives.
4. The ultimate success of a product, and therefore product owner, is meeting the end-user value of the business product owner, tool support of the technical product owner, and manual processing support of the operations product owner.

Line of business (LOB) product owners

LOB product owners focus on the products and services consumed by the organization’s external consumers and users. The role centers on the market needs, competitive landscape, and operational support to deliver products and services.

Business perspective

• Alignment to enterprise strategy and priorities
• Growth: market penetration and/or revenue
• Perception of product value
• Quality, stability, and predictability
• Improvement and innovation
• P&L
• Market threats and opportunities
• Speed to market
• Service alignment
• Meet or exceed individual goals

Relationship to Operations

• Customer satisfaction
• Speed of delivery and manual processing
• Continuity

Relationship to Technical

• Enabler
• Analysis and insight
• Lower operating and support costs

Technical product owners

Technical product owners are responsible for the IT systems, tools, platforms, and services that support business operations. Often they are identified as application or platform managers.

Technical perspective

• Application, application suite, or group of applications
• Core platforms and tools
• Infrastructure and networking
• Third-party technology services
• Enable business operations
• Direct-to-customer product or service
• Highly interconnected
• Need for continuous improvement
• End-of-life management
• Internal value proposition and users

Relationship to Business

• Direct consumers
• End users
• Source of funding

Relationship to Operations

• End users
• Process enablement or automation
• Support, continuity, and manual intervention

Operations (service) product owners

Operational product owners focus on the people, processes, and tools needed for manual processing and decisions when automation is not cost-effective. Operational product owners are typically called service owners due to the nature of their work.

Operational perspective

• Business enablement
• Continuity
• Problem, incident, issue resolution
• Process efficiency
• Throughput
• Error/defect avoidance
• Decision enablement
• Waste reduction
• Limit time in process
• Disaster recovery

Relationship to Business

• Revenue enablement
• Manual intervention and processing
• End-user satisfaction

Relationship to Technical

• Process enabler
• Performance enhancement
• Threat of automation

Exercise 1.2.1 Identify your primary product owner perspective

1 hour

1. Identify which product owner perspective represents your primary focus.
2. Determine where the other perspectives need to be part of your product roadmap or if they are managed by other product owners.

Output

• Identification of primary product owner perspective.

Participants

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Capture in the Mature and Scale Product Ownership Playbook.

Realign differences between project managers and product owners

Manage and communicate key milestones

Successful product owners understand and define the key milestones in their product delivery lifecycles. These need to be managed along with the product backlog and roadmap.

Info-Tech Best Practice

Product ownership isn’t just about managing the product backlog and development cycles. Teams need to manage key milestones such as learning milestones, test releases, product releases, phase gates, and other organizational checkpoints.

Define who manages each key milestone

Key milestones must be proactively managed. If a project manager is not available, those responsibilities need to be managed by the product owner or Scrum Master. Start with responsibility mapping to decide which role will be responsible.

*Scrum Master, Delivery Manager, Team Lead

Exercise 1.2.2 Define your product owner RACI

60 minutes

1. Review your product and project delivery methodologies to identify key milestones (including approvals, gates, reviews, compliance checks, etc.). List each milestone on a flip chart or whiteboard.
2. For each milestone, define who is accountable for the completion.
3. For each milestone, define who is responsible for executing the milestone activity. (Who does the work that allows the milestone to be completed?)
4. Review any responsibility and accountability gaps and identify opportunities to better support and execute your operating model.
5. If you previously completed Deliver Digital Products at Scale , review and update your RACI in the Mature and Scale Product Ownership Workbook .

Output

• Product owner RACI

Participants

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Capture in the Mature and Scale Product Ownership Playbook.

Phase 2

Align Product Owners to Products

Mature and Scale Product Ownership

This phase will walk you through the following activities:

2.1.1 Assign resources to your products and families

2.2.1 Visualize relationships to identify key influencers

2.2.2 Group stakeholders into categories

2.2.3 Prioritize your stakeholders

This phase involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Delivery managers
• Business analysts

Step 2.1

Assign product owners to products

Activities

2.1.1 Assign resources to your products and families

Align product owners to products

This step involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Delivery managers
• Business analysts

Outcomes of this step

• Product resource assignment

Match your product management role definitions to your product family levels

Using the role definitions, you created in Exercise 1.1.2, determine which roles correspond to which levels of your product families.

Product portfolio

Groups of product families within an overall value stream or capability grouping.

Project portfolio manager

Product family

A collection of related products. Products can be grouped along architectural, functional, operational, or experiential patterns.

Product family manager

Product

Single product composed of one or more applications and services.

Product owner

Info-Tech Insight

Define the current roles that will perform the product management function or define consistent role names to product owners and managers.

Assign resources throughout your product families

Info-Tech Insight

• Start by assigning resources to each product or product family box.
• A product owner can be responsible for more than one product.
• Ownership of more than one product does not mean they share the same backlog.
• For help organizing your product families, please download Deliver Digital Products at Scale.

Understand special circumstances

In Deliver Digital Products at Scale , products were grouped into families using Info-Tech’s five scaling patterns. Assigning owners to Enterprise Applications and Shared Services requires special consideration.

Value stream alignment

• Business architecture
  • Value stream
  • Capability
  • Function
• Market/customer segment
• Line of business (LoB)
• Example: Customer group > value stream > products

Enterprise applications

• Enabling capabilities
• Enterprise platforms
• Supporting apps
• Example: HR > Workday/Peoplesoft > Modules Supporting: Job board, healthcare administrator

Shared Services

• Organization of related services into service family
• Direct hierarchy does not necessarily exist within the family
• Examples: End-user support and ticketing, workflow and collaboration tools

Technical

• Domain grouping of IT infrastructure, platforms, apps, skills, or languages
• Often used in combination with Shared Services grouping or LoB-specific apps
• Examples: Java, .NET, low-code, database, network

Organizational alignment

• Used at higher levels of the organization where products are aligned under divisions
• Separation of product managers from organizational structure is no longer needed because the management team owns the product management role

Map the source of demand to each product

With enterprise applications and shared services, your demand comes from other product and service owners rather than end customers in a value stream.

Enterprise applications

• Primary demand comes from the operational teams and service groups using the platform.
• Each group typically has processes and tools aligned to a module or portion of the overall platform.
• Product owners determine end-user needs to assist with process improvement and automation.
• Product family managers help align roadmap goals and capabilities across the modules and tools to ensure consistency and the alignment of changes.

Shared services

• Primary demand for shared services comes from other product owners and service managers whose solution or application is dependent on the shared service platform.
• Families are grouped by related themes (e.g. workflow tools) to increase reusability, standard enterprise solutions, reduced redundancy, and consistent processes across multiple teams.
• Product owners manage the individual applications or services within a family.

Pattern: Enterprise applications

A division or group delivers enabling capabilities and the team’s operational alignment maps directly to the modules/components of an enterprise application and other applications that support the specific business function.

Example:

• Human resources is one corporate function. Within HR, however, there are subfunctions that operate independently.
• Each operational team is supported by one or more applications or modules within a primary HR system.
• Even though the teams work independently, the information they manage is shared with, or ties into processes used by other teams. Coordination of efforts helps provide a higher level of service and consistency.

For additional information about HRMS, please download Get the Most Out of Your HRMS.

Assigning owners to enterprise applications

Align your enterprise application owners to your operating teams that use the enterprise applications. Effectively, your service managers will align with your platform module owners to provide integrated awareness and planning.

Pattern: Shared services

Grouping by service type, knowledge area, or technology allows for specialization while families align service delivery to shared business capabilities.

Example:

• Recommended for governance, risk, and compliance; infrastructure; security; end-user support; and shared platforms (workflow, collaboration, imaging/record retention). Direct hierarchies do not necessarily exist within the shared service family.
• Service groupings are common for service owners (also known as support managers, operations managers, etc.).
• End-user ticketing comes through a common request system, is routed to the team responsible for triage, and then is routed to a team for resolution.
• Collaboration tools and workflow tools are enablers of other applications, and product families might support multiple apps or platforms delivering that shared capability.

Assigning owners to shared services

Assign owners by service type, knowledge area, or technology to provide alignment of shared business capabilities and common solutions.

Map sources of demand and influencers

Use the stakeholder analysis to define the key stakeholders and sources of demand for enterprise applications and shared services. Extend your mapping to include their stakeholders and influencers to uncover additional sources of demand and prioritization.

Info-Tech Insight

Your product owner map defines the influence landscape your product operates. It is every bit as important as the teams who enhance, support, and operate your product directly.

Combine your product owner map with your stakeholder map to create a comprehensive view of influencers.

Exercise 2.1.1 Assign resources to your products and families

1-4 hours

1. Use the product families you completed in Deliver Digital Products at Scale to determine which products and product families need a resource assigned. Where the same resource fills more than one role, they are the product owner or manager for each independently.
2. Product families that are being managed as products (one backlog for multiple products) should have one owner until the family is split into separate products later.
3. For each product and family, define the following:
   • Who is the owner (role or person)?
   • Is ownership clearly defined?
   • Are there other stakeholders who make decisions for the product?
4. Record the results in the Mature and Scale Product Ownership Workbook on the Product Owner Mapping worksheet.

Output

• Product owner and manager resource alignment.

Participants

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Capture in the Mature and Scale Product Ownership Playbook.

Step 2.2

Manage stakeholder influence

Activities

2.2.1 Visualize relationships to identify key influencers

2.2.2 Group stakeholders into categories

2.2.3 Prioritize your stakeholders

Align product owners to products

This step involves the following participants:

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Delivery managers
• Business analysts

Outcomes of this step

• Stakeholder management strategy

Develop a product owner stakeholder strategy

Stakeholders are a critical cornerstone to product ownership. They provide the context, alignment, and constraints that influence or control what a product owner can accomplish.

Product owners operate within a network of stakeholders who represent different perspectives within the organization.

First, product owners must identify members of their stakeholder network. Next, they should devise a strategy for managing stakeholders.

Without a stakeholder strategy, product owners will encounter obstacles, resistance, or unexpected changes.

Create a stakeholder network map to product roadmaps and prioritization

Follow the trail of breadcrumbs from your direct stakeholders to their influencers to uncover hidden stakeholders.

Info-Tech Insight

Your stakeholder map defines the influence landscape your product operates. It is every bit as important as the teams who enhance, support, and operate your product directly.

Use connectors to determine who may be influencing your direct stakeholders. They may not have any formal authority within the organization, but they may have informal yet substantive relationships with your stakeholders.

Exercise 2.2.1 Visualize relationships to identify key influencers

1 hour

1. List direct stakeholders for your product.
2. Determine the stakeholders of your stakeholders and consider adding each of them to the stakeholder list.
3. Assess who has either formal or informal influence over your stakeholders; add these influencers to your stakeholder list.
4. Construct a diagram linking stakeholders and their influencers together.
   • Use black arrows to indicate the direction of professional influence.
   • Use dashed green arrows to indicate informal bidirectional influence relationships.
5. Record the results in the Mature and Scale Product Ownership Workbook .

Output

• Relationships among stakeholders and influencers

Participants

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Capture in the Mature and Scale Product Ownership Playbook.

Categorize your stakeholders with a prioritization map

A stakeholder prioritization map helps product owners categorize their stakeholders by their level of influence and ownership in the product and/or teams.

There are four areas on the map, and the stakeholders within each area should be treated differently.

• Players have a high interest in the initiative and the influence to effect change over the initiative. Their support is critical, and a lack of support can cause significant impediments to the objectives.
• Mediators have a low interest but significant influence over the initiative. They can help to provide balance and objective opinions to issues that arise.
• Noisemakers have low influence but high interest. They tend to be very vocal and engaged, either positively or negatively but have little ability to enact their wishes.
• Spectators are generally apathetic and have little influence over or interest in the initiative.

Exercise 2.2.2 Group stakeholders into categories

1 hour

1. Identify your stakeholders’ interest in and influence on your Agile implementation as high, medium, or low by rating the attributes below.
2. Map your results to the model below to determine each stakeholder’s category.
3. Record the results in the Mature and Scale Product Ownership Workbook .

Output

• Categorization of stakeholders and influencers

Participants

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Capture in the Mature and Scale Product Ownership Playbook.

Prioritize your stakeholders

There may be too many stakeholders to be able to manage them all. Focus your attention on the stakeholders that matter most.

Consider the three dimensions of stakeholder prioritization: influence, interest, and support. Support can be determined by rating the following question: How likely is it that your stakeholder would recommend your product? These parameters are used to prioritize which stakeholders are most important and should receive your focused attention. The table to the right indicates how stakeholders are ranked.

Exercise 2.2.3 Prioritize your stakeholders

1 hour

1. Identify the level of support of each stakeholder by answering the following question: How likely is it that your stakeholder would endorse your product?
2. Prioritize your stakeholders using the prioritization scheme on the previous slide.
3. Record the results in the Mature and Scale Product Ownership Workbook .

Output

• Stakeholder and influencer prioritization

Participants

• Product owners
• Product managers
• Development team leads
• Portfolio managers
• Business analysts

Capture in the Mature and Scale Product Ownership Playbook.

Define strategies for engaging stakeholders by type

Info-Tech Insight

Each group of stakeholders draws attention and resources away from critical tasks. By properly identifying your stakeholder groups, the product owner can develop corresponding actions to manage stakeholders in each group. This can dramatically reduce wasted effort trying to satisfy spectators and noisemakers while ensuring the needs of mediators and players are met.

Phase 3

Mature Product Owner Capabilities

Mature and Scale Product Ownership

This phase will walk you through the following activities:

3.1.1 Assess your real Agile skill proficiency

3.2.1 Assess your vision capability proficiency

3.2.2 Assess your leadership capability proficiency

3.2.3 Assess your PLM capability proficiency

3.2.4 Identify your business value drivers and sources of value

3.2.5 Assess your value realization capability proficiency

This phase involves the following participants:

• Product owners
• Product managers

Step 3.1

Assess your Agile product owner readiness

Activities

3.1.1 Assess your real Agile skill proficiency

Mature product owner capabilities

This step involves the following participants:

• Product owners
• Product managers

Outcomes of this step

• Real Agile skill proficiency assessment

Why focus on core skills?

They are the foundation to achieve business outcomes

The right skills development is only possible with proper assessment and alignment against outcomes.

Being successful at Agile is more than about just doing Agile

The following represents the hard skills needed to “Do Agile”:

• Engineering skills. These are the skills and competencies required for building brand-new valuable software.
• Technician skills. These are the skills and competencies required for maintaining and operating the software delivered to stakeholders.
• Framework/Process skills. These are the specific knowledge skills required to support engineering or technician skills.
• Tools skills. This represents the software that helps you deliver other software.

While these are important, they are not the whole story. To effectively deliver software, we believe in the importance of being Agile over simply doing Agile.

Adapted from: “Doing Agile” Is Only Part of the Software Delivery Pie

Focus on these real Agile skills

Agile skills

• Accountability
• Collaboration
• Comfort with ambiguity
• Communication
• Empathy
• Facilitation
• Functional decomposition
• Initiative
• Process discipline
• Resilience

Info-Tech research shows these are the real Agile skills to get started with

Accountability

An accountable person:

• Takes ownership of their own decisions and actions and is responsible for the quality of results.
• Recognizes personal accountabilities to others, including customers.
• Works well autonomously.
• Ensures that the mutual expectations between themselves and others are clearly defined.
• Takes the appropriate actions to ensure that obligations are met in a timely manner.
• As a leader, takes responsibility for those being led.

Accountability drives high performance in teams and organizations

• The performance level of teams depends heavily on accountability and who demonstrates it:
  • In weak teams, there is no accountability.
  • In mediocre teams, supervisors demonstrate accountability.
  • In high-performance teams, peers manage most performance problems through joint accountability. (Grenny, 2014)
• According to Bain & Company, accountability is the third most important attribute of high-performing companies. Some of the other key attributes include honest, performance-focused, collaborative, and innovative. (Mankins, 2013)

All components of the employee empowerment driver have a strong, positive correlation with engagement.

Source: McLean & Company Engagement Database, 2018; N=71,794

Accountability

Your Score: ____

Collaboration as a skill

The principles and values of Agile revolve around collaboration.

• Works well with others on specialized and cross-functional teams.
• Can self-organize while part of a team.
• Respects the commitments that others make.
• Identifies and articulates dependencies.
• Values diverse perspectives and works with others to achieve the best output possible.
• Effective at working toward individual, team, department, and organizational goals.

Collaboration

The Agile Manifesto has three principles that focus on collaboration:

1. The business and developers must work together daily throughout the project.
2. Build projects around motivated individuals. Give them the environment and support they need and trust them to get the job done.
3. The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.

Effective collaboration supports Agile behaviors, including embracing change and the ability to work iteratively.

Collaboration

Your Score: ____

Comfort with ambiguity

Ability to handle ambiguity is a key factor in Agile success.

• Implies the ability to maintain a level of effectiveness when all information is not present.
• Able to confidently act when presented with a problem without all information present.
• Risk and uncertainty can comfortably be handled.
• As a result, can easily adapt and embrace change.
• People comfortable with ambiguity demonstrate effective problem-solving skills.

Relative importance of traits found in Agile teams

1. Handles ambiguity
2. Agreeable
3. Conscientious

Comfort with ambiguity

Your Score: ____

Communication

Even though many organizations recognize its importance, communication is one of the root causes of project failure.

56%

56% of the resources spent on a project are at risk due to ineffective communications.

PMI, 2013.

29%

In 29% of projects started in the past 12 months, poor communication was identified as being one of the primary causes of failure.

PMI, 2013.

Why are communication skills important to the Agile team?

It’s not about the volume, it’s about the method.

• Effectively and appropriately interacts with others to build relationships and share ideas and information.
• Uses tact and diplomacy to navigate difficult situations.
• Relays key messages by creating a compelling story, targeted toward specific audiences.

Adapted From: Agile Modeling

Communication

Your Score:____

Empathy

Empathy is the ability to understand and share the feelings of another in order to better serve your team and your stakeholders. There are three kinds:

Cognitive

Thought, understanding, intellect

• Knowing how someone else feels and what they might be thinking.
• Contributes to more effective communication.

Emotional

Feelings, physical sensation

• You physically feel the emotions of the other person.
• Helps build emotional connections with others.

Compassionate

Intellect, emotion with action

• Along with understanding, you take action to help.

How is empathy an Agile skill?

Empathy enables you to serve your team, your customers, and your organization

Serving the team

• Primary types: Emotional and compassionate empathy.
• The team is accountable for delivery.
• By being able to empathize with the person you are talking to, complex issues can be addressed.
• A lack of empathy leads to a lack of collaboration and being able to go forward on a common path.

Serving your customers and stakeholders

• Primary type: Cognitive empathy.
• Agile enables the delivery of the right value at the right time to your stakeholders
• Translating your stakeholders' needs requires an understanding of who they are as people. This is done through observations, interviews and conversations.
• Leveraging empathy maps and user-story writing is an effective tool.

Empathy

Your Score: ____

Facilitation

It’s not just your manager’s problem.

“Facilitation is the skill of moderating discussions within a group in order to enable all participants to effectively articulate their views on a topic under discussion, and to ensure that participants in the discussion are able to recognize and appreciate the differing points of view that are articulated.” (IIBA, 2015)

• Drives action through influence, often without authority.
• Leads and impacts others' thinking, decisions, or behavior through inclusive practices and relationship building.
• Encourages others to self-organize and hold themselves accountable.
• Identifies blockers and constructively removes barriers to progress.

Facilitation

Your Score: ____

Functional decomposition

It’s not just a process, it’s a skill.

“Functional decomposition helps manage complexity and reduce uncertainty by breaking down processes, systems, functional areas, or deliverables into their simpler constituent parts and allowing each part to be analyzed independently."

(IIBA, 2015)

Being able to break down requirements into constituent consumable items (example: epics and user stories).

Use artifact mapping to improve functional decomposition

In our research, we refer to these items as epics, capabilities, features, and user stories. How you develop your guiding principles and structure your backlog should be based on the terminology and artifact types commonly used in your organization.

Functional Decomposition

Your Score: ____

Initiative and self-organization

A team that takes initiative can self-organize to solve critical problems.

• "The best architectures, requirements, and designs emerge from self-organizing teams." (Agile Manifesto)
• In a nutshell, the initiative represents the ability to anticipate challenges and act on opportunities that lead to better business outcomes.
• Anticipates challenges and acts on opportunities that lead to better business outcomes.
• Thinks critically and is motivated to use both specialist expertise and general knowledge.
• Driven by the delivery of business value and better business outcomes.
• Empowers others to act and is empowered and self-motivated.

Initiative and self-organization

Your Score: ____

Process discipline

A common misconception is that Agile means no process and no discipline. Effective Agile teams require more adherence to the right processes to create a culture of self-improvement.

• Refers to the focus of following the right steps for a given activity at the right time to achieve the right outcomes.
• Focus on following the right steps for a given activity at the right time to achieve desired outcomes.

Process discipline

Your Score: ____

Resilience

If your team hits the wall, don’t let the wall hit them back.

• Resilience is critical for an effective Agile transformation. A team that demonstrates resilience always exhibits:
• Evolution over transformation – There is a recognition that changes happen over time.
• Intensity and productivity – A race is not won by the ones who are the fastest, but by the ones who are the most consistent. Regardless of what comes up, the team can push through.
• That organizational resistance is futile – Given that it is working on the right objectives, the team needs to demonstrate a consistency of approach and intensity regardless of what may stand in its way.
• Refers to the behaviors, thoughts, and actions that allow a person to recover from stress and adversity.

How resilience aligns with Agile

A team is not “living the principles” without resilience.

1. Purpose

   Aligns with: “Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.” The vision or goals may not be clear in certain circumstances and can be difficult to relate to a single work item. Being able to intrinsically source and harness a sense of purpose becomes more important, especially as a self-organizing team.

2. Perseverance

   Aligns with: “Agile processes harness change for the customer's competitive advantage.” Perseverance enables teams to continuously deliver at a steady pace, addressing impediments or setbacks and continuing to move forward.

3. Composure

   Aligns with: “Agile processes promote sustainable development,” and “At regular intervals, the team reflects ... and adjusts its behavior accordingly.”
   When difficult situations arise, composure allows us to understand perspectives, empathize with customers, accept late changes, and sustain a steady pace.

4. Self-Reliance

   Aligns with: “The best architectures, requirements, and designs emerge from self-organizing teams.” Knowing oneself, recognizing strengths, and drawing on past successes, can be a powerful aid in creating high-performing Agile teams

5. Authenticity

   Aligns with: “At regular intervals, the team reflects … and adjusts its behavior accordingly,” and “Build projects around motivated individuals.”
   When difficult situations arise, authenticity is crucial. “For example, being able to openly disclose areas outside of your strengths in sprint planning or being able to contribute constructively toward self-organization.”

Adapted from: Why Innovation, 2019.

Resilience

Your Score: ____

Exercise 1.2.1 Identify your primary product owner perspective

1 hour

1. Review each real Agile skill and determine your current proficiency.
2. Complete your assessment in the Mature and Scale Product Owner Proficiency Assessment tool.
3. Record the results in the Mature and Scale Product Ownership Playbook.
4. Review the skills map to identify strengths and areas of growth.

Output

• Agile skills assessment results.

Participants

• Product owners
• Product managers

Capture in the Mature and Scale Product Owner Proficiency Assessment.

Step 3.2

Mature product owner capabilities

Activities

3.2.1 Assess your vision capability proficiency

3.2.2 Assess your leadership capability proficiency

3.2.3 Assess your PLM capability proficiency

3.2.4 Identify your business value drivers and sources of value

3.2.5 Assess your value realization capability proficiency

Mature product owner capabilities

This step involves the following participants:

• Product owners
• Product managers

Outcomes of this step

• Info-Tech product owner capability model proficiency assessment

Product capabilities deliver value

As a product owner, you are responsible for managing these facets through your capabilities and activities.

Info-Tech Best Practice

It is easy to lose sight of what matters when we look at a product from a single point of view . Despite what "The Agile Manifesto" says, working software is not valuable without the knowledge and support that people need in order to adopt, use, and maintain it. If you build it, they will not come. Product owners must consider the needs of all stakeholders when designing and building products.

Recognize product owner knowledge gaps

Pulse survey of product owners

Info-Tech Insight

1. Less than 15% of respondents identified analytics or financial management as a key component of product ownership.
2. Assess your product owner’s capabilities and understanding to develop a maturity plan.

Source: Pulse Survey (N=18)

Implement the Info-Tech product owner capability model

Unfortunately, most product owners operate with incomplete knowledge of the skills and capabilities needed to perform the role. Common gaps include focusing only on product backlogs, acting as a proxy for product decisions, and ignoring the need for key performance indicators (KPIs) and analytics in both planning and value realization.

Vision

• Market Analysis
• Business Alignment
• Product Roadmap

Leadership

• Soft Skills
• Collaboration
• Decision Making

Product Lifecycle Management

• Plan
• Build
• Run

Value Realization

• KPIs
• Financial Management
• Business Model

Product owner capabilities provide support

Your vision informs and aligns what goals and capabilities are needed to fulfill your product or product family vision and align with enterprise goals and priorities. Each item on your roadmap should have corresponding KPIs or OKRs to know how far you moved the value needle. Value realization measures how well you met your target, as well as the impacts on your business value canvas and cost model.

Your leadership skills improve collaborations and decisions when working with your stakeholders and product delivery teams. This builds trust and improves continued improvements to the entire product lifecycle. A product owner’s focus should always be on finding ways to improve value delivery.

Product owner capabilities provide support

Develop product owner capabilities

Avoid common capability gaps

Vision

• Focusing solely on backlog grooming (tactical only)
• Ignoring or failing to align product roadmap to enterprise goals
• Operational support and execution
• Basing decisions on opinion rather than market data
• Ignoring or missing internal and external threats to your product

Leadership

• Failing to include feedback from all teams who interact with your product
• Using a command-and-control approach
• Viewing product owner as only a delivery role
• Acting as a proxy for stakeholder decisions
• Avoiding tough strategic decisions in favor of easier tactical choices

Product lifecycle management

• Focusing on delivery and not the full product lifecycle
• Ignoring support, operations, and technical debt
• Failing to build knowledge management into the lifecycle
• Underestimating delivery capacity, capabilities, or commitment
• Assuming delivery stops at implementation

Value realization

• Focusing exclusively on “on time/on budget” metrics
• Failing to measure a 360-degree end-user view of the product
• Skipping business plans and financial models
• Limiting financial management to project/change budgets
• Ignoring market analysis for growth, penetration, and threats

Capabilities: Vision

Market Analysis

• Customer Empathy: Identify the target users and unique value your product provides that is not currently being met. Define the size of your user base, segmentation, and potential growth.
• Customer Journey: Define the future path and capabilities your users will respond to.
• Competitive analysis: Complete a SWOT analysis for your end-to-end product lifecycle. Use Info-Tech’s Business SWOT Analysis Template.

Business Alignment

• Enterprise alignment: Align to enterprise and product family goals, strategies, and constraints.
• Delivery and release strategy: Develop a delivery strategy to achieve value quickly and adapt to internal and external changes. Value delivery is constrained by your delivery pipeline.
• OCM and go-to-market strategy: Create organizational change management, communications, and a user implementation approach to improve adoption and satisfaction from changes.

Product Roadmap

• Roadmap strategy: Determine the duration, detail, and structure of your roadmap to accurately communicate your vision.
• Value prioritization: Define criteria used to evaluate and sequence demand items.
• Release and capacity planning: Build your roadmap with realistic goals and milestones based on your delivery pipeline and dependencies.

“Customers are best heard through many ears.”

– Thomas K. Connellan, Inside the Magic Kingdom

Info-Tech Insight

Data comes from many places and may still not tell the complete story.

Build your product strategy playbook

Complete Deliver on Your Digital Product Vision to define your Vision, Goals, Roadmap approach, and Backlog quality filters.

Digital Product Strategy Supporting Workbook

Supporting workbook that captures the interim results from a number of exercises that will contribute to your overall digital product vision.

Product Backlog Item Prioritization Tool

An optional tool to help you capture your product backlog and prioritize based on your given criteria

Product Roadmap Tool

An optional tool to help you build out and visualize your first roadmap.

Your Digital Product Vision Details Strategy

Record the results from the exercises to help you define, detail, and make real your digital product vision.

Your product vision is your North Star

It's ok to dream a little!

Adapted from: Geoffrey Moore, 2014.

Info-Tech Best Practice

A product vision shouldn’t be so far out that it doesn’t feel real or so short-term that it gets bogged down in minutiae and implementation details. Finding the right balance will take some trial and error and will be different for each organization.

Use product roadmaps to guide delivery

In Deliver on Your Digital Product Vision, we showed how the product roadmap is key to value realization. As a product owner, the product roadmap is your communicated path to align teams and changes to your defined goals, while aligning your product to enterprise goals and strategy.

Info-Tech Best Practice

Info-Tech Best Practice Product delivery requires a comprehensive set of business and technical competencies to effectively roadmap, plan, deliver, support, and validate your product portfolio. Product delivery is a “multi-faceted, complex discipline that can be difficult to grasp and hard to master.” It will take time to learn and adopt methods and become a competent product manager or owner (“What Is Product Management?”, Pichler Consulting Limited).

Match your roadmap and backlog to the needs of the product

Ultimately, you want products to be able to respond faster to changes and deliver value sooner. The level of detail in the roadmap and backlog is a tool to help the product owner plan for change. The duration of your product roadmap is all directly related to the tier of product owner in the product family.

Product delivery realizes value for your product family

While planning and analysis are done at the family level, work and delivery are done at the individual product level.

Use artifact mapping to improve functional decomposition

In our research, we refer to these items as epics, capabilities, features, and user stories. How you develop your guiding principles and structure your backlog should be based on the terminology and artifact types commonly used in your organization.

Manage and communicate key milestones

Successful product owners understand and define the key milestones in their product delivery lifecycles. These need to be managed along with the product backlog and roadmap.

Info-Tech Best Practice

Product ownership isn’t just about managing the product backlog and development cycles! Teams need to manage key milestones such as learning milestones, test releases, product releases, phase gates, and other organizational checkpoints!

Milestones

• Points in the timeline when the established set of artifacts is complete (feature-based), or checking status at a particular point in time (time-based).
• Typically assigned a date and used to show the progress of development.
Plays an important role when sequencing different types of artifacts.

Release dates

• Releases mark the actual delivery of a set of artifacts packaged together in a new version of the product.
• Release dates, firm or not, allow stakeholders to anticipate when this is coming.

Leverage the product canvas to state and inform your product vision

Capability: Vision

Your Score: ____

Exercise 3.2.1 Assess your Vision capability proficiency

1 hour

1. Review the expectations for this capability and determine your current proficiency for each skill.
2. Complete your assessment in the Mature and Scale Product Owner Proficiency Assessment tool.
3. Record the results in the Mature and Scale Product Ownership Playbook.
4. Review the skills map to identify strengths and areas of growth.

Output

• Product owner capability assessment

Participants

• Product owners
• Product managers

Capture in the Mature and Scale Product Owner Proficiency Assessment.

Capabilities: Leadership

Soft Skills

• Communication: Maintain consistent, concise, and appropriate communication using SMART guidelines (specific, measurable, attainable, relevant, and timely).
• Integrity: Stick to your values, principles, and decision criteria for the product to build and maintain trust with your users and teams.
• Influence: Manage stakeholders using influence and collaboration over contract negotiation.

Collaboration

• Stakeholder management: Build a communications strategy for each stakeholder group, tailored to individual stakeholders.
• Relationship management: Use every interaction point to strengthen relationships, build trust, and empower teams.
• Team development: Promote development through stretch goals and controlled risks to build team capabilities and performance.

Decision Making

• Prioritized criteria: Remove personal bias by basing decisions off data analysis and criteria.
• Continuous improvement: Balance new features with the need to ensure quality and create an environment of continuous improvement.
• Team empowerment/negotiation: Push decisions to teams closest to the problem and solution, using Delegation Poker to guide you.

“Everything walks the walk. Everything talks the talk.”

– Thomas K. Connellan, Inside the Magic Kingdom

Info-Tech Insight

Product owners cannot be just a proxy for stakeholder decisions. The product owner owns product decisions and management of all stakeholders.

Capability: Leadership

Your Score: ____

Exercise 3.2.2 Assess your Leadership capability proficiency

1 hour

1. Review the expectations for this capability and determine your current proficiency for each skill.
2. Complete your assessment in the Mature and Scale Product Owner Proficiency Assessment tool.
3. Record the results in the Mature and Scale Product Ownership Playbook.
4. Review the skills map to identify strengths and areas of growth.

Output

• Product owner capability assessment

Participants

• Product owners
• Product managers

Capture in the Mature and Scale Product Owner Proficiency Assessment.

Capability: Product lifecycle management

Plan

• Product backlog: Follow a schedule for backlog intake, grooming, updates, and prioritization.
• Journey map: Create an end-user journey map to guide adoption and loyalty.
• Fit for purpose: Define expected value and intended use to ensure product meets your end user’s needs.

Build

• Capacity management: Work with operations and delivery teams to ensure consistent and stable outcomes.
• Release strategy: Build learning, release, and critical milestones into a repeatable release plan.
• Compliance: Build policy compliance into delivery practices to ensure alignment and reduce avoidable risk (privacy, security).

Run

• Adoption: Focus attention on end-user adoption and proficiency to accelerate value and maximize retention.
• Support: Build operational support and business continuity into every team.
• Measure: Measure KPIs and validate expected value to ensure product alignment to goals and consistent product quality.

“Pay fantastic attention to detail. Reward, recognize, celebrate.”

– Thomas K. Connellan, Inside the Magic Kingdom

Info-Tech Insight

Product owners must actively manage the full lifecycle of the product.

Define product value by aligning backlog delivery with roadmap goals

In each product plan, the backlogs show what you will deliver. Roadmaps identify when and in what order you will deliver value, capabilities, and goals.

A backlog stores and organizes PBIs at various stages of readiness

A well-formed backlog can be thought of as a DEEP backlog:

Detailed Appropriately: PBIs are broken down and refined, as necessary.

Emergent: The backlog grows and evolves over time as PBIs are added and removed.

Estimated: The effort a PBI requires is estimated at each tier.

Prioritized: The PBI’s value and priority are determined at each tier.

(Perforce, 2018)

Distinguish your specific goals for refining in the product backlog vs. planning for a sprint itself

Often backlog refinement is used interchangeably or considered a part of sprint planning. The reality is they are very similar, as the required participants and objectives are the same; however, there are some key differences.

Use quality filters to promote high value items into the delivery pipeline

Basic scrum process

The scrum process coordinates multiple stakeholders to deliver on business priorities.

Capability: Product lifecycle management

Your Score: ____

Exercise 3.2.3 Assess your PLM capability proficiency

1 hour

1. Review the expectations for this capability and determine your current proficiency for each skill.
2. Complete your assessment in the Mature and Scale Product Owner Proficiency Assessment tool.
3. Record the results in the Mature and Scale Product Ownership Playbook.
4. Review the skills map to identify strengths and areas of growth.

Output

• Product owner capability assessment

Participants

• Product owners
• Product managers

Capture in the Mature and Scale Product Owner Proficiency Assessment.

Capabilities: Value realization

Key performance indicators (KPIs)

• Usability and user satisfaction: Assess satisfaction through usage monitoring and end-user feedback.
• Value validation: Directly measure performance against defined value proposition, goals, and predicted ROI.
• Fit for purpose: Verify the product addresses the intended purpose better than other options.

Financial management

• P&L: Manage each product as if it were its own business with profit and loss statements.
• Acquisition cost/market growth: Define the cost of acquiring a new consumer, onboarding internal users, and increasing product usage.
• User retention/market share: Verify product usage continues after adoption and solution reaches new user groups to increase value.

Business model

• Defines value proposition: Dedicate your primary focus to understanding and defining the value your product will deliver.
• Market strategy and goals: Define your acquisition, adoption, and retention plan for users.
• Financial model: Build an end-to-end financial model and plan for the product and all related operational support.

“The competition is anyone the customer compares you with.”

– Thomas K. Connellan, Inside the Magic Kingdom

Info-Tech Insight

Most organizations stop with on-time and on-budget. True financial alignment needs to define and manage the full lifecycle P&L.

Use a balanced value to establish a common definition of goals and value

Value drivers are strategic priorities aligned to our enterprise strategy and translated through our product families. Each product and change has an impact on the value driver helping us reach our enterprise goals.

Info-Tech Insight

Your value drivers and impact helps estimate the expected value of roadmap items, prioritize roadmap and backlog items, and identify KPIs and OKRs to measure value realization and actual impact.

Include balanced value as one criteria to guide better decisions

Your balanced value is just one of many criteria needed to align your product goals and sequence roadmap items. Feasibility, delivery pipeline capacity, shared services, and other factors may impact the prioritization of backlog items.

Determine your value drivers

Competent organizations know that value cannot always be represented by revenue or reduced expenses. However, it is not always apparent how to envision the full spectrum of sources of value. Dissecting value by benefit type and the value source’s orientation allows you to see the many ways in which a product or service brings value to the organization.

Business value matrix

Financial benefits vs. improved capabilities

Financial benefits refer to the degree to which the value source can be measured through monetary metrics and is often quite tangible.

Human benefits refer to how a product or service can deliver value through a user’s experience.

Inward vs. outward orientation

Inward refers to value sources that have an internal impact and improve your organization’s effectiveness and efficiency in performing its operations.

Outward refers to value sources that come from your interaction with external factors, such as the market or your customers.

Exercise 3.2.4 Identify your business value drivers and sources of value

1 hour

1. Brainstorm the different types of business value that you produce on the sticky notes (one item per page). Draw from examples of products in your portfolio.
2. Identify the most important value items for your organization (two to three per quadrant).
3. Record the results in the Mature and Scale Product Ownership Workbook.

Output

• Product owner capability assessment

Participants

• Product owners
• Product managers

Capture in the Mature and Scale Product Ownership Workbook.

My business value sources

Capability: Value realization

Your Score: ____

Exercise 3.2.5 Assess your value realization capability proficiency

1 hour

1. Review the expectations for this capability and determine your current proficiency for each skill.
2. Complete your assessment in the Mature and Scale Product Owner Proficiency Assessment tool.
3. Record the results in the Mature and Scale Product Ownership Playbook.
4. Review the skills map to identify strengths and areas of growth.

Output

• Product owner capability assessment

Participants

• Product owners
• Product managers

Capture in the Mature and Scale Product Owner Proficiency Assessment.

Summary of Accomplishment

Problem solved.

Product ownership can be one of the most difficult challenges facing delivery and operations teams. By focusing on operational grouping and alignment of goals, organizations can improve their value realization at all levels in the organization.

The foundation for delivering and enhancing products and services is rooted in the same capability model. Traditionally, product owners have focused on only a subset of skills and capabilities needed to properly manage and grow their products. The product owner capability model is a useful tool to ensure optimal performance from product owners and assess the right level of detail for each product within the product families.

Congratulations. You’ve completed a significant step toward higher-value products and services.

If you would like additional support, have our analysts guide you through other phases as apart of an Info-Tech workshop

Contact your account representative for more information

workshops@infotech.com
1-888-670-8889

Additional Support

If you would like additional support, have our analysts guide you through other phases as apart of an Info-Tech workshop

Contact your account representative for more information
workshops@infotech.com 1-888-670-8889

The following are sample activities that will be conducted by Info-Tech analysts with your team:

3.1.1 Assess your real Agile skill proficiency

Assess your skills and capabilities against the real Agile skills inventory

2.2.3 Prioritize your stakeholders

Build a stakeholder management strategy.

Research Contributors and Experts

Emily Archer

Lead Business Analyst,
Enterprise Consulting, authentic digital agency

Emily Archer is a consultant currently working with Fortune 500 clients to ensure the delivery of successful projects, products, and processes. She helps increase the business value returned for organizations’ investments in designing and implementing enterprise content hubs and content operations, custom web applications, digital marketing, and e-commerce platforms.

David Berg

Founder & CTO
Strainprint Technologies Inc.

David Berg is a product commercialization expert who has spent the last 20 years delivering product management and business development services across a broad range of industries. Early in his career, David worked with product management and engineering teams to build core network infrastructure products that secure and power the internet we benefit from today. David’s experience also includes working with clean technologies in the area of clean power generation, agritech, and Internet of Things infrastructure. Over the last five years, David has been focused on his latest venture, Strainprint Technologies, a data and analytics company focused on the medical cannabis industry. Strainprint has built the largest longitudinal medical cannabis dataset in the world, with a goal to develop an understanding of treatment behavior, interactions, and chemical drivers to guide future product development.

Research Contributors and Experts

Kathy Borneman

Digital Product Owner, SunTrust Bank

Kathy Borneman is a senior product owner who helps people enjoy their jobs again by engaging others in end-to-end decision making to deliver software and operational solutions that enhance the client experience and allow people to think and act strategically.

Charlie Campbell

Product Owner, Merchant e-Solutions

Charlie Campbell is an experienced problem solver with the ability to quickly dissect situations and recommend immediate actions to achieve resolution, liaise between technical and functional personnel to bridge the technology and communication gap, and work with diverse teams and resources to reach a common goal.

Research Contributors and Experts

Yarrow Diamond

Sr. Director, Business Architecture
Financial Services

Yarrow Diamond is an experienced professional with expertise in enterprise strategy development, project portfolio management, and business process reengineering across financial services, healthcare and insurance, hospitality, and real estate environments. She has a master’s in Enterprise Architecture from Penn State University, LSSMBB, PMP, CSM, ITILv3.

Cari J. Faanes-Blakey, CBAP, PMI-PBA

Enterprise Business Systems Analyst,
Vertex, Inc.

Cari J. Faanes-Blakey has a history in software development and implementation as a Business Analyst and Project Manager for financial and taxation software vendors. Active in the International Institute of Business Analysis (IIBA), Cari participated on the writing team for the BA Body of Knowledge 3.0 and the certification exam.

Research Contributors and Experts

Kieran Gobey

Senior Consultant Professional Services
Blueprint Software Systems

Kieran Gobey is an IT professional with 24 years of experience, focused on business, technology, and systems analysis. He has split his career between external and internal customer-facing roles, and this has resulted in a true understanding of what is required to be a Professional Services Consultant. His problem-solving skills and ability to mentor others have resulted in successful software implementations.

Kieran’s specialties include deep system troubleshooting and analysis skills, facilitating communications to bring together participants effectively, mentoring, leadership, and organizational skills.

Rupert Kainzbauer

VP Product, Digital Wallets
Paysafe Group

Rupert Kainzbauer is an experienced senior leader with a passion for defining and delivering products that deliver real customer and commercial benefit. With a team of highly experienced and motivated product managers, he has successfully led highly complex, multi-stakeholder payments initiatives, from proposition development and solution design through to market delivery. Their domain experience is in building online payment products in high-risk and emerging markets, remittance, prepaid cards, and mobile applications.

Research Contributors and Experts

Saeed Khan

Founder,
Transformation Labs

Saeed Khan has been working in high tech for 30 years in Canada and the US and has held several leadership roles in Product Management in that time. He speaks regularly at conferences and has been writing publicly about technology product management since 2005.

Through Transformation Labs, Saeed helps companies accelerate product success by working with product teams to improve their skills, practices, and processes. He is a cofounder of ProductCamp Toronto and currently runs a Meetup group and global Slack community called Product Leaders; the only global community of senior level product executives.

Hoi Kun Lo

Product Owner
Nielsen

Hoi Kun Lo is an experienced change agent who can be found actively participating within the IIBA and WITI groups in Tampa, FL and a champion for Agile, architecture, diversity, and inclusion programs at Nielsen. She is currently a Product Owner in the Digital Strategy team within Nielsen Global Watch Technology.

Research Contributors and Experts

Abhishek Mathur

Sr Director, Product Management
Kasisto, Inc.

Abhishek Mathur is a product management leader, an artificial intelligence practitioner, and an educator. He has led product management and engineering teams at Clarifai, IBM, and Kasisto to build a variety of artificial intelligence applications within the space of computer vision, natural language processing, and recommendation systems. Abhishek enjoys having deep conversations about the future of technology and helping aspiring product managers enter and accelerate their careers.

Jeff Meister

Technology Advisor and Product Leader

Jeff Meister is a technology advisor and product leader. He has more than 20 years of experience building and operating software products and the teams that build them. He has built products across a wide range of industries and has built and led large engineering, design, and product organizations.

Jeff most recently served as Senior Director of Product Management at Avanade, where he built and led the product management practice. This involved hiring and leading product managers, defining product management processes, solution shaping and engagement execution, and evangelizing the discipline through pitches, presentations, and speaking engagements.

Jeff holds a Bachelor of Applied Science (Electrical Engineering) and a Bachelor of Arts from the University of Waterloo, an MBA from INSEAD (Strategy), and certifications in product management, project management, and design thinking.

Research Contributors and Experts

Vincent Mirabelli

Principal,
Global Project Synergy Group

With over 10 years of experience in both the private and public sectors, Vincent Mirabelli possesses an impressive track record of improving, informing, and transforming business strategy and operations through process improvement, design and re-engineering, and the application of quality to business analysis, project management, and process improvement standards.

Oz Nazili

VP, Product & Growth
TWG

Oz Nazili is a product leader with a decade of experience in both building products and product teams. Having spent time at funded startups and large enterprises, he thinks often about the most effective way to deliver value to users. His core areas of interest include Lean MVP development and data-driven product growth.

Research Contributors and Experts

Mike Starkey

Director of Engineering
W.W. Grainger

Mike Starkey is a Director of Engineering at W.W. Grainger, currently focusing on operating model development, digital architecture, and building enterprise software. Prior to joining W.W. Grainger, Mike held a variety of technology consulting roles throughout the system delivery lifecycle spanning multiple industries such as healthcare, retail, manufacturing, and utilities with Fortune 500 companies.

Anant Tailor

Cofounder and Head of Product
Dream Payments Corp.

Anant Tailor is a cofounder at Dream Payments where he currently serves as the COO and Head of Product, having responsibility for Product Strategy & Development, Client Delivery, Compliance, and Operations. He has 20+ years of experience building and operating organizations that deliver software products and solutions for consumers and businesses of varying sizes.

Prior to founding Dream Payments, Anant was the COO and Director of Client Services at DonRiver Inc, a technology strategy and software consultancy that he helped to build and scale into a global company with 100+ employees operating in seven countries.

Anant is a Professional Engineer with a Bachelor degree in Electrical Engineering from McMaster University and a certificate in Product Strategy & Management from the Kellogg School of Management at Northwestern University.

Research Contributors and Experts

Angela Weller

Scrum Master, Businessolver

Angela Weller is an experienced Agile business analyst who collaborates with key stakeholders to attain their goals and contributes to the achievement of the company’s strategic objectives to ensure a competitive advantage. She excels when mediating or facilitating teams.

Related Info-Tech Research

Product Delivery

Deliver on Your Digital Product Vision

Build a product vision your organization can take from strategy through execution.

Deliver Digital Products at Scale

Deliver value at the scale of your organization through defining enterprise product families.

Build Your Agile Acceleration Roadmap

Quickly assess the state of your Agile readiness and plan your path forward to higher value realization.

Implement Agile Practices That Work

Improve collaboration and transparency with the business to minimize project failure.

Implement DevOps Practices That Work

Streamline business value delivery through the strategic adoption of DevOps practices.

Extend Agile Practices Beyond IT

Further the benefits of Agile by extending a scaled Agile framework to the business.

Build Your BizDevOps Playbook

Embrace a team sport culture built around continuous business-IT collaboration to deliver great products.

Embed Security Into the DevOps Pipeline

Shift security left to get into DevSecOps.

Spread Best Practices With an Agile Center of Excellence

Facilitate ongoing alignment between Agile teams and the business with a set of targeted service offerings.

Enable Organization-Wide Collaboration by Scaling Agile

Execute a disciplined approach to rolling out Agile methods in the organization.

Related Info-Tech Research

Application Portfolio Management

APM Research Center

See an overview of the APM journey and how we can support the pieces in this journey.

Application Portfolio Management Foundations

Ensure your application portfolio delivers the best possible return on investment.

Streamline Application Maintenance

Effective maintenance ensures the long-term value of your applications.

Streamline Application Management

Move beyond maintenance to ensuring exceptional value from your apps.

Build an Application Department Strategy

Delivering value starts with embracing what your department can do.

Embrace Business-Managed Applications

Empower the business to implement their own applications with a trusted business-IT relationship

Optimize Applications Release Management

Facilitate ongoing alignment between Agile teams and the business with a set of targeted service offerings.

Related Info-Tech Research

Value, Delivery Metrics, Estimation

Build a Value Measurement Framework

Focus product delivery on business value–driven outcomes.

Select and Use SDLC Metrics Effectively

Be careful what you ask for, because you will probably get it.

Application Portfolio Assessment: End User Feedback

Develop data-driven insights to help you decide which applications to retire, upgrade, re-train on, or maintain to meet the demands of the business.

Create a Holistic IT Dashboard

Mature your IT department by measuring what matters.

Refine Your Estimation Practices With Top-Down Allocations

Don’t let bad estimates ruin good work.

Estimate Software Delivery With Confidence

Commit to achievable software releases by grounding realistic expectations.

Reduce Time to Consensus With an Accelerated Business Case

Expand on the financial model to give your initiative momentum.

Optimize Project Intake, Approval, and Prioritization

Deliver more projects by giving yourself the voice to say “no” or “not yet” to new projects.

Enhance PPM Dashboards and Reports

Facilitate ongoing alignment between Agile teams and the business with a set of targeted service offerings.

Related Info-Tech Research

Organizational Design and Performance

Redesign Your IT Organizational Structure

Focus product delivery on business value-driven outcomes.

Build a Strategic IT Workforce Plan

Have the right people, in the right place, at the right time.

Implement a New Organizational Structure

Reorganizations are inherently disruptive. Implement your new structure with minimal pain for staff while maintaining IT performance throughout the change.

Build an IT Employee Engagement Program

Don’t just measure engagement, act on it

Set Meaningful Employee Performance Measures

Set holistic measures to inspire employee performance.

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Bastow, Janna. “Creating Agile Product roadmaps Everyone Understands.” ProdPad, 22 Mar. 2017. Accessed Sept. 2018.

Bastow, Janna. “The Product Tree Game: Our Favorite Way To Prioritize Features.” ProdPad, 21 Feb. 2016. Accessed Sept. 2018.

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Johnson, Steve. “How to Master the 3 Horizons of Product Strategy.” Aha!, 24 Sept. 2015. Accessed Sept. 2018.

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Bibliography (Vision and Canvas)

Adams, Paul. “The Future Product Canvas.” Inside Intercom, 10 Jan. 2014. Web.

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Barry, Richard. “The Product Vision Canvas – a Strategic Tool in Developing a Successful Business.” Polymorph, 2019. Web.

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Supporting Research

Transformation topics and supporting Info-Tech research to make the journey easier, with less rework.

Supporting research and services

Improving IT alignment

Build a Business-Aligned IT Strategy

Success depends on IT initiatives clearly aligned to business goals, IT excellence, and driving technology innovation.

Includes a "Strategy on a page" template

Make Your IT Governance Adaptable

Governance isn't optional, so keep it simple and make it flexible.

Create an IT View of the Service Catalog

Unlock the full value of your service catalog with technical components.

Application Portfolio Management Foundations

Ensure your application portfolio delivers the best possible return on investment.

Supporting research and services

Shifting toward Agile DevOps

Agile/DevOps Resource Center

Tools and advice you need to be successful with Agile.

Develop Your Agile Approach for a Successful Transformation

Understand Agile fundamentals, principles, and practices so you can apply them effectively in your organization.

Implement DevOps Practices That Work

Streamline business value delivery through the strategic adoption of DevOps practices.

Perform an Agile Skills Assessment

Being Agile isn't about processes, it's about people.

Define the Role of Project Management in Agile and Product-Centric Delivery

Projects and products are not mutually exclusive.

Supporting research and services

Shifting toward product management

Make the Case for Product Delivery

Align your organization on the practices to deliver what matters most.

Deliver on Your Digital Product Vision

Build a product vision your organization can take from strategy through execution.

Deliver Digital Products at Scale

Deliver value at the scale of your organization through defining enterprise product families.

Build a Better Product Owner

Strengthen the product owner's role in your organization by focusing on core capabilities and proper alignment.

Supporting research and services

Improving value and delivery metrics

Build a Value Measurement Framework

Focus product delivery on business value-driven outcomes.

Create a Holistic IT Dashboard

Mature your IT department by measuring what matters.

Select and Use SDLC Metrics Effectively

Be careful what you ask for because you will probably get it.

Reduce Time to Consensus With an Accelerated Business Case

Expand on the financial model to give your initiative momentum.

Supporting research and services

Improving governance, prioritization, and value

Make Your IT Governance Adaptable

Governance isn't optional, so keep it simple and make it flexible.

Maximize Business Value from IT Through Benefits Realization

Embed benefits realization into your governance process to prioritize IT spending and confirm the value of IT.

Drive Digital Transformation With Platform Strategies

Innovate and transform your business models with digital platforms.

Succeed With Digital Strategy Execution

Building a digital strategy is only half the battle: create a systematic roadmap of technology initiatives to execute the strategy and drive digital transformation.

Build a Value Measurement Framework

Focus product delivery on business value-driven outcomes.

Create a Holistic IT Dashboard

Mature your IT department by measuring what matters.

Supporting research and services

Improving requirements management and quality assurance

Requirements Gathering for Small Enterprises

Right-size the guidelines of your requirements gathering process.

Improve Requirements Gathering

Back to basics: great products are built on great requirements.

Build a Software Quality Assurance Program

Build quality into every step of your SDLC.

Automate Testing to Get More Done

Drive software delivery throughput and quality confidence by extending your automation test coverage.

Manage Your Technical Debt

Make the case to manage technical debt in terms of business impact.

Create a Business Process Management Strategy

Avoid project failure by keeping the "B" in BPM.

Build a Winning Business Process Automation Playbook

Optimize and automate your business processes with a user-centric approach.

Create a Winning BPI Playbook

Don't waste your time focusing on the "as is." Focus on the improvements and the "to be."

Supporting research and services

Improving release management

Optimize Applications Release Management

Build trust by right-sizing your process using appropriate governance.

Streamline Application Maintenance

Effective maintenance ensures the long-term value of your applications.

Streamline Application Management

Move beyond maintenance to ensure exceptional value from your apps.

Optimize Change Management

Right-size your change management process.

Manage Your Technical Debt

Make the case to manage technical debt in terms of business impact.

Improve Application Development Throughput

Drive down your delivery time by eliminating development inefficiencies and bottlenecks while maintaining high quality.

Supporting research and services

Business relationship management

Embed Business Relationship Management

Leverage knowledge of the business to become a strategic IT partner.

Improving security

Build an Information Security Strategy

Create value by aligning your strategy to business goals and business risks.

Develop and Deploy Security Policies

Enhance your overall security posture with a defensible and prescriptive policy suite.

Simplify Identity and Access Management

Leverage risk- and role-based access control to quantify and simplify the IAM process.

Supporting research and services

Improving and supporting business-managed applications

Embrace Business-Managed Applications

Empower the business to implement their own applications with a trusted business-IT relationship.

Enhance Your Solution Architecture Practices

Ensure your software systems solution is architected to reflect stakeholders’ short-and long-term needs.

Satisfy Digital End Users With Low- and No-Code

Extend IT, automation, and digital capabilities to the business with the right tools, good governance, and trusted organizational relationships.

Build Your First RPA Bot

Support RPA delivery with strong collaboration and management foundations.

Automate Work Faster and More Easily With Robotic Process Automation

Embrace the symbiotic relationship between the human and digital workforce.

Supporting research and services

Improving business intelligence, analytics, and reporting

Modernize Data Architecture for Measurable Business Results

Enable the business to achieve operational excellence, client intimacy, and product leadership with an innovative, Agile, and fit-for-purpose data architecture practice.

Build a Reporting and Analytics Strategy

Deliver actionable business insights by creating a business-aligned reporting and analytics strategy.

Build Your Data Quality Program

Quality data drives quality business decisions.

Design Data-as-a-Service

Journey to the data marketplace ecosystems.

Build a Robust and Comprehensive Data Strategy

Key to building and fostering a data-driven culture.

Build an Application Integration Strategy

Level the table before assembling the application integration puzzle or risk losing pieces.

Appendix

Pulse survey results

Pulse survey (N=18): What are the key components of product/service ownership?

Pulse Survey (N=18): What are the key individual skills for a product/service owner?

Other choices entered by respondents:

• Anticipating client needs, being able to support delivery in all phases of the product lifecycle, adaptability, and ensuring a healthy backlog (at least two sprints’ worth of work).
• Requirements elicitation and prioritization.
• The key skill is being product-focused to ensure it provides value for competitive advantage.

Pulse Survey (N=18): What are three things an outstanding product/service owner does that an average one doesn’t?