GOV21: Panel Emphasizes Importance of Relationships in Governance  

GOV21 Coverage:

GOV21: Panel Emphasizes Importance of Relationships in Governance   


With today’s outsourcing deals growing in size, complexity and strategic importance, ensuring that service providers deliver to the terms of carefully structured contracts through effective governance is critical.

Presented by event sponsor, Avasant, an intriguing panel discussion during IAOP’s GOV21 online forum, explored the Future of Vendor Governance: Enabling Sustainable Outcomes in Complex Sourcing Deals.

The expert speakers discussed the need for organizations to have effective governance to ensure service providers deliver to the terms of the agreement after signing these new multi-dimensional, large dollar deals that are focused on achieving business outcomes.

Relationships are critical to successful governance, particularly in the COVID-19 environment, stressed Valerie Lape Handy, Director, IT Partner Management, CDPHP, who shared her expertise both on the tech side and as a practicing attorney. Her healthcare company very intentionally has named the function “partner” management as opposed to “vendor” management. 

“It is about relationships,” she said. “We have solid agreements in place. At the end of the day, having to rapidly implement changes, the relationships are important to get executive-level approvals in place and to work with our partners who were making rapid changes. I didn’t even have to turn to the contract (during the pandemic) because it was about the trusted partnerships.”

An agile approach to governance and contracting, having real-time data and transparency, and automation to respond quickly to internal stakeholders have all been essential elements to their success, she said.

“We are working in a rapidly moving environment,” Handy said. “How do we best respond to that? It’s with the relationships we build across our business and delivery teams and our partners. And that requires ongoing communication and transparency so we are all aware of the needs we each have and can respond to them. As much as things have changed, the key to the success is the ongoing collaborative relationships that have remained the same.” 

Looking forward post-pandemic, retaining top talent is a concern, particularly as highly regulated industries like healthcare may require employees to return to secure work environments. 

Organizational resistance can be another barrier. “Culture can be as big a barrier to transforming governance as getting a good contract,” said Jim Lee, Vice President and Global Leader, Governance, Risk & Compliance Practice, Avasant, who moderated the session.

The Avasant speakers discussed how Vendor Management as a Service (VMaaS) can help ensure business value is realized from large outsourcing relationships and shared use cases in manufacturing, defense and healthcare.

VMaaS can allow organizations to quickly achieve maturity and address the myriad of challenges vendor management is faced with, allowing organizations to focus on strategic aspects, according to Lee.

“Everything is a service today,” said Carlos Hernandez, Partner, Global Lead Business & Digital Transformation, Avasant. “VMaaS allows flexibility to scale up and down, and the advantages of being very analytical. Organizations don’t have the time and resources to transform their vendor management function. It’s about time to market, talent, technology and best practices to make it work in a short period of time.” 

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