This is the third in a five part series about optimizing VMO for modern IT organizations.
One of the best reasons to integrate third-party cloud services into your overall IT strategy is flexibility. Using vendor infrastructure, platforms, or services allows the IT organization to rapidly meet rising demand and scale back as needed. This can have significant positive effects on cost efficiency and quality of service. However, without effective demand management strategies, the IT organization will be unable to deliver the services business units need to be effective.
The importance of demand management
The VMO must be able to understand and forecast the needs of the business and use that information to work with third parties to more effectively deliver services. Companies must have dedicated demand management staff using best practices to track and organize demands. This can help eliminate the growth of shadow IT groups that rise to meet needs not being delivered by a centralized IT organization. A successful VMO will be a singular stop for IT within the business, prioritizing and delivering on the requests of business units, and ensuring that the company has more beneficial and organized relationships with vendors.
Optimizing Your Demand Management Strategy
In order to deliver better service and have more effective relationships with vendors, the VMO must actively work to predict, prioritize, and act on the demands of business units. This requires a set of specialized skills and frameworks focused on these tasks.
Understand your company - A better demand management strategy for your VMO starts with a deep understanding of the company and its needs. IT leaders must make an effort to build relationships with other key stakeholders and understand how the services they provide are actually used on a day-to-day basis. This will help them better prepare for new demands and deliver service that actually meets the business units’ needs.
Create demand channels - In order to prevent business units from engaging in shadow IT, the main IT organization needs to create easy-to-use channels for people within the company to request functionality or new services quickly. These requests should be well documented and traceable to ensure all stakeholders are on the same page.
Organized demands - The VMO should have a software system in place to track, manage, and prioritize business unit demands and IT initiatives.
Manage Maverick Spending - Maverick IT spending, whether in or outside of the IT organization, is a major challenge for IT leaders. It can decentralize IT, create redundancies, and waste limited resources. The VMO must recognize that it will never be able to eliminate maverick spending, but it can reduce and manage it. By having an approach to incorporate maverick IT initiatives into the overall IT strategy and management framework, IT leaders can better control the course of IT in the company to serve overall strategic goals. Properly forecasting demand and having channels for requests can also prevent maverick spending from occurring in the first place.Conclusion
Meeting business unit demand through contracting of third-party services is the core objective of the VMO. IT leaders must make understanding business needs and building systems to track, manage, prioritize, and fulfill demands the top priorities in order to meet their objectives. This will help companies reduce and manage maverick spending, deliver better service to business units, and negotiate more effectively with vendors.
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Rick has over 25 years of experience leading organizational IT transformational projects, including major engagements with several Fortune 50 companies. He has held senior-level positions at Tata Consultancy Service, NorthHighland Consulting, and Hewlett Packard, where he developed strategies and transformational programs centered on IT service management and IT optimization.