Get Used To The Word VMO

on December 02, 2011 at 12:33 PM

You might be hearing it a lot. Federal CIO Steve VanRoekel is calling for departments and major agencies to create vendor management organizations, or single-office gateways for managing contractors.

He comes at this in the context of the 25-point IT reform plan. He’s vetting the idea through the President’s Management Advisory Board (PMAB.) Industry uses VMOs widely. Basically VMO is modern parlance for purchasing department.

Many industries have well-developed vendor management processes. Over the decades of the 20th century, the purchasing function evolved from a paperwork clearing house to a strategic sourcing and supply chain management function. The Arab oil embargo of 1973 was a seminal occurrence in supply chain management. The inflation and shortages it touched off in industrial commodities suddenly made purchasing and procurement critical functions for manufacturers who hoped to remain profitable.

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The VMO concept arrived more recently. It formed in IT and CIO sections of corporations as a way to get some order to the vast array of individual vendors necessary to build, equip and operate data centers.

VanRoekel, at a PMAB meeting streamed live at (and featured above), said the government has “an infinite” number of doors through which vendors can do business. (Aside: Give the PMAB a lot of credit for having the nerve to post the meetings on YouTube. Nerve? Read the bizarre posted comments.)

VanRoekel believes a single door (per agency, at least) would reduce the complexity and “streamline and produce a buying phenomenon that we don’t see today.”

VMOs are already underway at Veterans Affairs, Patent and Trademark Office, Interior and Education. They have varying degrees of sophistication. The Education Department’s deputy secretary, Tony Miller, told the PMAB, Education wants to somehow use the VMO to shift more IT spending away from operations and maintenance to innovative uses of IT. Deputy Secretary David Hayes says Interior eyes its VMO as a way to improve investment reviews.

So what does a VMO actually do in industry?

One idea comes from Forrester Research, as reported last year in ComputerWorld, VMO “is a driving force behind promoting best practices, providing contract and negotiation templates, facilitating communication, and helping define the vendor key performance metrics.”

Connecticut uses a VMO to host vendor demonstrations. One IT manufacturer uses its VMO to run the day-to-day processes of dealing with vendors so the CIO can concentrate on strategy.

In other words, a VMO can be just about anything. And that will be the challenge for VanRoekel if he pursues this initiative. Some questions that come to my mind:

What about the Federal Acquisition Regulation Council, Office of Federal Procurement Policy, and operators of government-wide acquisition contracts? Would they have a say in how VMOs would work?

What subdivision would be the smallest to merit a VMO? Patent and Trademark Office has one, but how would it relate to the Commerce VMO? IRS and Treasury? FBI and Justice? Coast Guard and Homeland Security?

How would contracting officers and contracting officers representatives fit in?

Is this only for information technology vendors? What about IT consultancies who also do broader management consulting, like Booz Allen, Deloitte and Accenture?

How would VMOs keep from being simply another bureaucratic hurtle for vendors to jump en route to federal business?

Is DOD included in the intended scaling up of the VMO effort? It is struggling to fix the Defense Contract Management Agency and Defense Contract Audit Agency.

The VMO concept is intriguing, but VanRoekel still has much spade work to do.