Sourcing and Vendor Management professionals aren’t known for their high risk tolerance. In fact, most focus a significant portion of their time reducing risks in their supplier base, protecting the business from supplier-related risk.

That’s admirable and necessary. Of course the business shouldn’t be subjected to predictable and preventable risk events. But let’s think for a minute about what risks we’re really avoiding: Are we avoiding the unnecessary risks that we could see coming? Or are we so focused on reducing any risk that we’re not able to take advantage of new opportunities that could transform our businesses?

Innovation has once again become a business imperative — because of the shaky economy, not in spite of it. Many SVM professionals tell me that being innovative in both what you buy AND how you buy it is what will make sure their businesses stay viable regardless of the economic situation. Innovation requires us to think about new technologies, and most likely new suppliers. It also requires us to think differently about how we manage those supplier relationships.

So what are the new supplier-related risks we face in this innovation-focused environment? We asked Jason Busch, Azul Partners, one of our keynote speakers at the SVM Forum this week, this question. He recorded his answer for us here:

And if his response leads you to have follow-on questions, don’t forget to tweet them with the hashtag #SVM12. We’ll ask him for you during the forum.

Too often at Forrester, sourcing and vendor management (SVM) professionals tell us things like, “oh, we’d never implement a Bring-Your-Own-PC program. It would increase our risk and reduce our negotiating power with our PC vendor” -- only to find out later that their colleagues in the infrastructure team have in fact already implemented such a program.

The reality of today’s environment is that your end users have wildly different expectations of technology, and of the people who procure it for them. These users are mobile, empowered to make their own technology decisions, impatient to get what they want, and have multiple new technology options like BYOPC and cloud that make consumer-like enterprise purchases possible.  Yet too often, SVM professionals hide behind their corporate sourcing policies rather than try to get ahead of user needs.

You know the risks of denying a trend – users going around SVM with loopholes in the corporate policy to buy what they want, while selecting new vendors that don’t meet your risk criteria. And I know many of you are trying to avoid this fate. You’re already expanding your efforts beyond IT to work more with your marketing teams and spending more time giving guidance to individuals sourcing SaaS contracts rather than trying to take over responsibility for those contracts yourselves.

But even as these issues have been gaining steam for a while, 2011 is the year that the trends accelerate and converge. Why? The recession is mostly behind us and the effort to grow quickly brings out the natural tendencies of end users to focus on speed over risk or total cost.

2011 is the year you need to stop slow-pedaling new models of sourcing emerging technologies and instead put your foot on the gas. Get out there and be more proactive with your stakeholders about social technologies, mobile devices and applications, and:

“Re-creating the way we work.”

That’s Michael Chaney’s vision for procurement at Cisco in an era of Empowered users. Next week at Forrester’s Sourcing & Vendor Management Forum in Chicago, Michael, who heads up Cisco’s procurement relationship group at Cisco, will talk about procurement’s role in the innovation engine at Cisco. I recently caught up with Michael, who is also a member of Forrester’s Sourcing & Vendor Management Council, to discuss procurement’s role in innovation at Cisco.

Ross: How has your role evolved in the past year and how do you see it changing over the next?

Chaney: At the beginning of 2010, I was running the global IT VMS (Vendor Management Services) team. My team and I are now part of Global Procurement Services (GPS) helping to drive the value we created within IT across all of Cisco’s global enterprise. Though the operating models are similar, the challenges in connecting with all business functions, developing a broader set of suppliers and actioning a significantly higher level of spend are different. And other groups have also been consolidated in to drive the new GPS model. Our goal this next year is to recreate the way we work and still deliver the incremental value Cisco needs from procurement (like re-building the airplane in flight).  

Ross: Empowering technologies – mobile, video, cloud, and social – are introducing new vendors to the business. What challenges do you face bringing new vendors into your business?

Clients frequently tell us how much they value connecting with their peers. A few years ago we created the Forrester Leadership Boards Sourcing & Vendor Management Council to serve that need. But in the age of social technologies and interconnectedness there are valuable conversations you can have with peers who aren’t part of that private community. So this week we launched The Forrester Community For Sourcing & Vendor Management Professionals.

The community is open to all Sourcing & Vendor Management Professionals, whether you’re a Forrester client or not. Check out the community and you’ll see conversations focused on the key business challenges that you face every day. The community is a place for you to exchange ideas, opinions, and real-world solutions with each other. Our Forrester Leadership Board teammate Sara Dupuis is managing the community, helping facilitate the discussions. Forrester analysts will also participate and share their views.

Here’s what you’ll find:

• A simple platform on which you can pose your questions and get advice from peers who face the same business challenges.
• Insight from our analysts, who weigh in frequently on the issues.
• Fresh perspective from peers, who share their real-world success stories and best practices.
• Content on the latest sourcing and vendor management issues and trends — from Forrester and other thought leaders.

Forrester's new blog platform went live -- we still have a team blog for Sourcing & Vendor Management, but now each analyst also has an independent blog. Check them out. In the meantime, here are some thoughts from Cliff Condon, the project manager. And of course, feel free to add your own thoughts in the comments.

Christine

Hey everyone. Here it is – Forrester’s new blog network. We made some changes to improve the experience for readers and to encourage more analysts to blog. Feel free to poke around and let me know what you think.

There are a few things I’d like to point out to you:

Everyone’s welcome here. Forrester analysts use blogs as an input into the research they produce, so having an open, ongoing dialogue with the marketplace is critical. Clients and non-clients can participate – so I encourage you to be part of the conversations on Forrester blogs.

We still have team blogs focused on role professionals. Our role blogs, such as the CIO blog and the Interactive Marketing blog, are a rollup of all the posts from the analysts serving that specific role professional. By following a role team blog, you can participate in all the conversational threads affecting a role.
And now we’ve added analyst blogs as well. If you prefer to engage directly with your favorite analyst, you can. Look on the right-hand rail of the team blog and you’ll see a list of the analyst blogs. Just click on their name to go to their blog. Or type their name into “Search”. An analyst blog is a place for the analyst to get reaction to their ideas and connect with others shaping the marketplace. You’ll find the blogs to be personal in tone and approach.

You can monitor analyst tweets. On role team blogs, you will see the recent tweets on the right-hand rail from analysts serving that role. On analyst blogs, the tweets shown are specific to that analyst.