Vendor Management Manifesto

By
Amit Kulkarni, CSP, CSM, CSPO

Gaurav Rastogi, CSP, CSM, CSPO

Carlos Martin

Jeyaprakash Rajaram (JP), CSP, CSM

Anand Sulur Murugan, CSM

Subrahmaniam SRV (Subbu), CSP, CSM

Executive Sponsorship

Madhur Kathuria, CST, CEC

1 Introduction
1.1 The Governance
1.2 The Roles
 1.3 The Objective of this Manifesto
2 The Opening Statement
3 The Twelve Principles
3.1 Risk Sharing over Risk Transfer
3.2 Featured Based Payments over Milestone Based
3.3 Outcome Based Productivity over Utilization Based
3.4 Team Based Ownership over Management Based
3.5 One Team over Partnership
3.6 Long Term Relationships over Fungible Contracts
3.7 End to End Contracts over Horizontal Contracts
3.8 Focus on Products over Activities
3.9 Business KPI over Operational KPI (Key Performance Indicators)
3.10 Transparency over Bureaucracy
3.11 Respond over React
3.12 Contingency in Scope over Contingency in Time and Cost
4 The process for coming up with the Manifesto
1 Introduction
In a Customer-Supplier environment, the primary stakeholders are

1.1 The Governance

The delivery team is governed by contracts. There are 2 types of contract we will be considering
● The Master Contract : This is a contract signed between the Customer and
Supplier Management teams and governs the entire set of Scrum projects being
executed.
● The individual work order level contracts: This is a contract which will govern the
detailed work to be done by teams.
This manifesto will take into account both the type of contract

1.2 The Roles

The roles covered under this Manifesto are as follows
The Customer Management This is the management team of the customer

The Vendor Management Vendor Management team will work on behalf of the
Team Customer Management team in preparing the contract
and negotiating the same with the Supplier’s
management

The Team The team will consist of multiple Scrum teams working
on the projects governed under the Master Contract.
They will end up working under the individual Work
Orders signed up with the customer.

The Supplier Management The Supplier Management team will negotiate the
terms and conditions of the Master Contract of the
contract along with the The Customer Management
team (and the Vendor Management team).

1.3 The Objective of this Manifesto

The Objective of this Manifesto is to define guiding principles around the Customer-Supplier
working environment with regards to working on Scrum projects. The assumptions made are
● The environment is customer-supplier (i.e. an outsourced environment)
● The environment is distributed and may not be co-located
● The environment involves multiple vendors
2 The Opening Statement
The Customers and Suppliers are integrated elements of a working environment in a project.
The Customers and Suppliers will work together with a common goal and that is “Producing
Value for the End Customer”. This manifesto supports the Agile Manifesto Value “Customer
Collaboration over Contract Negotiation”.

There are 12 principles which will support the Agile Value and are presented below in a format
of Left over Right. The items on the left are valued more than the ones on the right.
3 The Twelve Principles
3.1 Risk Sharing over Risk Transfer
The Customer Management and Supplier Management should own the risk collectively to
create a joint ownership.

3.2 Feature Based Payments over Milestone Based

Payments are based on Business value i.e. payments are made when features are completed
or released or when Business Value is delivered).

3.3 Outcome Based Productivity over Utilization Based

Productivity should be measured in the Scrum Projects. However, the contract should propose
productivity measures based on the business value generated vs the utilization of the
resources.

3.4 Team Based Ownership over Management Based

Commitments in a contract should be endorsed by the teams. The contracts should support the
endorsement of teams for the work to be executed by the teams.

3.5 One Team over Partnership

Culture of one team one vision will lead to a long-lasting relationship and create a win-win for
the Customer and Supplier.

3.6 Long Term Relationships over Fungible Contracts

Considering Profit, Stability and Business Value as 3 pillars for a Customer-Supplier relationship
to provide business value, it is important to have long-term commitments that leads to more
ownerships and alignment to the vision of the Customer.

3.7 End to End Contracts over Horizontal Contracts

Contracts should be made based on Products/Feature Based Deliverables (Vertical Slice or
end-to-end) over activity/skill-based based contract (Horizontal slice e.g. Development, Testing,
Acceptance etc)
Customer Management mindset must facilitate cross-functional (Vertical Slice) contracts.

3.8 Focus on Products over Activities

Focus on product delivery rather than on delivering activities.
3.9 Business KPI over Operational KPI (Key Performance
Indicators)
Focus on Business KPI over Operational KPI will give opportunity to bring down the cost of
correction thus increasing the value yielded by the organization.

3.10 Transparency over Bureaucracy

Transparent Culture between Customer and Supplier will facilitate collaboration and reduction in
escalation and bureaucracy.

3.11 Respond over React

Contracts Governance should enable alignment between customer and Supplier Management
so that potential escalations are responded at the earliest.

3.12 Contingency in Scope over Contingency in Time and Cost

Contracts should enable high-priority changes to be incorporated even late in the delivery cycle
without increasing the time and cost of the project.
4 The process for coming up with the Manifesto
The team came together during the Scrum Coaching Retreat at Goa on 31st Jan, 1st Feb and 2nd
Feb and discussed and deliberated over how the contracts should be structured to enable Agile
implementations.
● The team was assembled on 31st Jan
● Executive Guidance and Sponsorship was provided by Madhur Kathuria, CST
and organizer of the Scrum Retreat at Goa.
● The team decided a backlog at the start of the Sprint 0 on 31 st January
● During the first sprint, the team worked on “Mindset of Supplier’s Management”,
“Mindset of the Vendor Management / Customer Management” and “Mindset of
the team” with regards to Contracts and Work Orders.
● During the Second Sprint, the team worked on items related to the changes
required in the Fixed Price (FP) contract, Time and Material Contracts (T&M) and
Master Contract to enable agility.
● The Sprints and progress was tracked meticulously
● During the First and Second Sprint, while discussing the items, the team came
up with Guiding Principles on Vendor Management process.
● During the Third and Final Sprint, a Vendor Management Manifesto was
prepared and the Manifesto documented.