United Parcel Service's top IT operations guy, Jim Medeiros, recently sat down with a key UPS hardware supplier to talk about deploying new application servers .

"I was listing out for him a bunch of things we want to make sure we do together, so this new technology will work properly," says Medeiros, vice president of shared services for UPS in Atlanta. Among his queries:

•  What are all the things that can go wrong?

•  What skill levels are needed, from the vendor and from UPS?

•  What items should be covered on a common status report?

•  Should we have one person from each company who is not directly involved in the project to objectively review whether the project is successfully meeting its goals?

•  What resources need to be assigned by both companies to ensure success?

•   What other customers of the vendor have deployed this technology and are willing to provide feedback to UPS?

"I'd never get any of that information if all I did was sign a contract and install the product," Medeiros says.

These are the kinds of questions that more network and IT professionals now are asking their vendors, and themselves. This awareness is being embodied either in new, more formal responsibilities for senior IT managers, or in new jobs with titles such as vendor relationship manager.

"Historically, the vendor-management role was shaped by software and hardware features and functions. Negotiations were around things like quantity, product features and so on," says Diane Morello, vice president of business management of IT for Gartner. "Today, the conversation [with IT vendors] is more about intangibles, about such things as service levels that are being measured. It's less about items and more about outcomes."

Rationalize relationships

A viable vendor-management function can rationalize a web of relationships between a large company and a group of vendors, save money and time, and give the enterprise more control over meeting its project and business objectives.

Gary Wolfram of North Bend, Ind., is a former programmer and IT manager who's been involved in vendor management since 1996. At that time, he was hired as an outside consultant to direct IS recruiting for a large company with a division that was starting to build out its IT group.

Wolfram set up a centralized system for managing the various recruiting companies that were supplying his client with contract programmers and IT staff. "We were able to save 25% of the hiring managers' time, simply by the fact they no longer had to repeat themselves over and over to every one of these vendors," Wolfram recalls.

At the same time, Wolfram worked with the IT and project managers who hire the contract programmers, to help them understand that a lower rate was not the sole criteria in making a decision. A less-experienced programmer would have a lower hourly rate, but might require more supervision or support, which could increase the project's overall cost.